Howdy!

[ScubaSteve]

Just thought I would make at least a single post!

My name is Steven, I'll primarily be lurking here and trying to learn all I can.

I used to be in the precious metals purchasing industry, we worked out of a single location. Our purchaser paid us 97%-97.7% of spot value.

At any rate I am trying to take on the old role of our purchaser and consolidate the gold/silver purchases of multiple stores in my region.

Right now I am trying to run the numbers and figure out how in the world that fella made a living of 3%-2.3%! I'm in talks with a few refinery's at the moment, and only got a quote from one thus far for 85% (Yeah Right....). I figured this would be an excellent place to read up as everyone here is in the industry . Wish me luck, and thanks for this excellent resource!

 

[Palladium]

3% of what?
Paypal seems to do well with 3%.

 

[Claudie]

3% of the population won the revolutionary war.

Glad to see you on the forum, hope you learn a lot and I'm sure we can all learn something from you as well.

 

[nickvc]

Welcome to the forum.
If you gave us a location or even a country we might be able to help you more as we have members from all over the world who trade their values to others and will willingly tell you who you can trust and give you a fair deal.

 

[ScubaSteve]

3% of the population won the revolutionary war.

Glad to see you on the forum, hope you learn a lot and I'm sure we can all learn something from you as well.

I like the way you think, I'll do my best to contribute!

3% of what?
Paypal seems to do well with 3%.

I agree paypal is making a killing huh? And sorry 3% profit margin!

Welcome to the forum.
If you gave us a location or even a country we might be able to help you more as we have members from all over the world who trade their values to others and will willingly tell you who you can trust and give you a fair deal.

Thanks for the welcome! I'm located in the USA, Massachusetts to be exact.

If anyone here participants in a similar business give me a shout. I'd love to chat.

Thanks again all.

 

[Palladium]

It's not just the 3% profit margin you take into account. When you sell in small lots you are not paid on other metals like the silver or palladium or any lose diamonds you may find. When your the refiner this is an added bonus that you get to keep. If your the guy who buys from all the other small guys and groups it together into larger lots for sale to the refiner then you can get paid at least on the silver side making your profit margins a little higher if you have larger lots. A lot of people hear me say i love gold filled! The reason being is that when i run a batch of GF and get my 10-15% it's all profit and i find a good bit of karat mixed in not to even mention the silver that i get for free! This helps offset my operating cost so the percentage is almost always pure profit with the added goodies paying for processing cost. If your operating on a 3% profit margin it takes about a 1/2 % to refine and the other 2 1/2 % is profit.

Here's a good read. http://goldrefiningforum.com/phpBB3/viewtopic.php?f=60&t=7352&hilit=refiner+profit+margin

 

[ScubaSteve]

It's not just the 3% profit margin you take into account. When you sell in small lots you are not paid on other metals like the silver or palladium or any lose diamonds you may find. When your the refiner this is an added bonus that you get to keep. If your the guy who buys from all the other small guys and groups it together into larger lots for sale to the refiner then you can get paid at least on the silver side making your profit margins a little higher if you have larger lots. A lot of people hear me say i love gold filled! The reason being is that when i run a batch of GF and get my 10-15% it's all profit and i find a good bit of karat mixed in not to even mention the silver that i get for free! This helps offset my operating cost so the percentage is almost always pure profit with the added goodies paying for processing cost. If your operating on a 3% profit margin it takes about a 1/2 % to refine and the other 2 1/2 % is profit.

Here's a good read. http://goldrefiningforum.com/phpBB3/viewtopic.php?f=60&t=7352&hilit=refiner+profit+margin

Thank you . I was actually about to edit my last post when you replied. I had been doing some reading and it appears I had it very easy with this gentleman buying from us as a small business. Provided we had a 30 day hold. I feel like a simpleton now having used acid testing kits! I would sadly be the man buying from all the smaller people, so I would make a little bit more then. It appears I have a TON more reading and learning to do to even be able to have a proper discussion so forgive me if you can!

I am considering choosing NTR as my refinery. I am waiting for a call Monday to discuss with another business their rates, but another member here states that he receives a pretty good rate from them. I had been told that refineries pay 100% or 99% of spot (Some of my reading partially confirm the 99% in volume?), I had always been skeptical of that given they have to make a profit somehow also. 98.5% is a more realistic number then. Meaning that I would have to pay 96% to remain competitive and remain a decent person. This further increases my curiosity of how we were paid 97.7% by a middleman, maybe my memory is failing me on this topic and it was 97%, but enough of that nonsense its of no relevance. With that being said maybe I am underestimating the power of volume, honestly now I am at a loss of what to expect to spend a week purchasing from stores. I am fascinated by and I love this industry, but maybe its worth rethinking this venture!

Thanks again!

 

[nickvc]

Buying gold is a risky venture with an unstable market,when the price was constantly going up it was easy to make money even on low margins but with a stable or falling market you need access to cover your daily purchases, or enough to cover 80%+ to avoid losing your margin.
Many people who had cash to spend made a fortune buying gold with the rising market but with a stable or falling market it has lost many of those buyers, it now takes intelligence and a careful eye to make money and volumes are dropping worldwide, the easy money has gone so if you want to make money your going to need experience and lots of it plus access to the markets to cover your purchases and protect your margin.

 

[ScubaSteve]

Buying gold is a risky venture with an unstable market,when the price was constantly going up it was easy to make money even on low margins but with a stable or falling market you need access to cover your daily purchases, or enough to cover 80%+ to avoid losing your margin.
Many people who had cash to spend made a fortune buying gold with the rising market but with a stable or falling market it has lost many of those buyers, it now takes intelligence and a careful eye to make money and volumes are dropping worldwide, the easy money has gone so if you want to make money your going to need experience and lots of it plus access to the markets to cover your purchases and protect your margin.

100% I agree with you! I remember those days. We would purchase a couple thousand a day and by the end of the month have 10%-20% more! Towards the end we wouldn't get burned, but our holdings definitely lost value.

I could manage my risk a bit if I could lock in my rates the day of purchase. Still you bring up an excellent point. Profitability in low margins is derived from large volume. Volume is defiantly shrinking! I'm confident I could make a good profit if I could spend >$40,000 a week purchasing from stores, but are they going to have enough product for me to purchase like that?

On a fun note! I was looking through the gallery section. I'm jealous of the buttons you guys are making, they look fantastic!

Thanks again for all your advice and discussion!