Fair price to pay for karat scrap

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Stonecutter1

Member
Joined
Sep 22, 2016
Messages
16
Dont' know if this is the right thread for this question but on average what percent of spot price are gold buyers who are fair and not thieves paying. I am a goldsmith and I take in a good amount of old gold for trade in from time to time and I pay between 70 - 80 % of spot.
 
I'm not sure it's in the right place either but the mods can move it.
On your point my comments would be.
1. Be fair with your customers and pay the same or more than is available locally for scrap.
2. If you are now refining the gold yourself you have a cheap source of raw material so you should benefit both ways from buying and selling which refers back to the first point.
3. It's better to have happy customers who recommend you to others as a fair buyer and a good craftsman which should help sales and purchases.
4. If your part exchanging scrap for new product give a good price on the scrap as you have your profit is in the sale and maybe a small bonus on the scrap.
 
nickvc said:
4. If your part exchanging scrap for new product give a good price on the scrap as you have your profit is in the sale and maybe a small bonus on the scrap.
This! While some customers may think that giving you the full amount of gold in scrap means their ring should be almost free, I'm guessing you already know to disabuse them of this notion. I generally give my customers 85% of spot as a credit, but my markup is based on the full amount of gold used.

In other words, if I'm using [ (raw materials x 3) + labor ] as a price guide for custom work, even if they give me the exact amount of scrap gold I need, they're still effectively paying [ (raw materials x 2.15) + labor ]. This is of course simplification, since there can be other raw material costs too, but you get the idea.
 
I split this topic and moved it here.

I have a neighbor who had a pile of scrap chains and rings some years back and needed to sell them. I figured I could help so I melted them together and sampled and assayed a button. It was about 2 1/2 ounces if I remember correctly.

I always get preferred rates so I sold her metal for 99% of assayed value and gave her 100% of the cash. After all it was a favor for a neighbor. Well gold was high then and I gave her $2440. (My memory isn't that sharp, i just looked it up!) In fact, I did the assay myself and even added the coronets to the remelt at the refiner. So she got everything.

Well I will never do that again, she had totaled everything she paid for every piece in the lot and in her mind that was what it was worth. She figured I beat her (not the exact words she used, country women up here have a colorful way of expressing themselves) and she was not happy.

So I can relate well to upcyclists point! Never again.
 
4metals I think most of us in this business know exactly what you mean and how you felt at the time.
As a suggestion for all who get similar lots and are doing a favour for free I would advise to make a rough estimation of the value and point out that it is based on your best guess as to the true value and ask them to take it to a cash for gold store and see if they get a better offer before doing any work on their scrap.
Strange but true doing favours or working for free seems to cause more aggravation than working to make a profit.
 
I find the main problem is that some gold buyers publish unrealistic prices.
They typically have fine print so only trade can access the higher price or include large handling charges.
Most clients only have the one good lot and by the time they have tested other services and found them to be less than transparent the business has gone to the other service.
I have found that people over focused on your honesty may be inherently dishonest them self's,they certainly never see the need to repay over payments if and when it happens so one can deduce that to them honesty is one way street.
Your first concern should be if the client is suitable,helping some one who has acquired there material by dishonesty could cause you more problems than it is worth.
Good clients are as rare as the metal's and do not begrudge you making a small living..
 
Agreed. I make an honest effort to educate customers on the price I'm giving them. Especially when I'm doing precision gemcutting--I tell them why I'm charging that amount (namely: quality of rough, unique design, quality of cutting, untreated).

And when they reply, "but I can get a garnet necklace at walmart for $99," I show them the door (and may or may not bother explaining why they actually will never be able to buy it at Walmart).
 
You pay what you need to pay in order to achieve two aims.

Firstly to make it worth your time to process the product and make a profit whilst taking into account your time. Secondly to ensure that the guy is happy with your prices and will come back again.

It's not rocket science- you find the balance between the two and it runs beautifully. You are a muppet if you work for nothing and the guy is going to be annoyed if you leave him with no profit.

Jon
 
anachronism said:
You pay what you need to pay in order to achieve two aims.

Firstly to make it worth your time to process the product and make a profit whilst taking into account your time. Secondly to ensure that the guy is happy with your prices and will come back again.

It's not rocket science- you find the balance between the two and it runs beautifully. You are a muppet if you work for nothing and the guy is going to be annoyed if you leave him with no profit.

Jon
I find Clients tend to be annoyed with any thing less than Alchemy.
At least half of my clients go by what they want to be true instead of what can be demonstrated.
Knowing that you have been honest is all you can really hope for.
Disappointing people when you point out the correct content is never pleasant, but as most people have unrealistic expectations it is par for the course.
 
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