Just about anyone knows that the more silver you buy, the closer to spot value you will pay for it, and vice versa.
Not necessarily true, until you are buying tens of kilos of silver. The premium over spot is more dependent upon form chosen. You will be able to buy a COMEX-acceptable bar (~~1000 oz) for much closer to spot than you will 10 Englehard or JM bars. Always. You will be able to buy a bag of junk silver generally taken as 715 oz for less then 7 Englehard 100 oz bars and 15 rounds. You will always pay more for 100 Silver Eagles than a 100 oz Englehard or JM bar.
So I was thinking about melting all of my silver (I have an oxy-acetylene rig, so melting will not be a problem) and turning it into shot and selling it by the gram on eBay.
Not my idea of a good time. Depending upon what form your current silver is, you are taking it from a self-assaying form to a non-self assaying form, plus, the act of selling something on ebay represents the sacrifice of roughly 12% of the final sales price (INCLUDING, NOW, SHIPPING) so you will lose about 13% of your final sales price. Plus, you will be taking your silver from widely-transacted form (assuming you have rounds or small bars) into a much-smaller audience type form.
As far as the guy you linked who pours his own 1 oz bars, anyone who buys those for $55 is a flaming idiot, when you can buy US silver eagles for $45 (with silver at $40.mid) without working up a sweat or 1 oz generic but brand name bars such as APMEX, Sunshine for $42. You can probably buy Englehard or JM 1 oz bars if you can find them for $43.50.
If your business model fulfills via selling on ebay, there is literally no way you will generate a profit. Trust me on this, I have pondered it at great length, in every variation I can think of. Ebay fees are larger than anything you'll be able to generate on your own. DO NOT FORGET that for you to start with an Englehard bar you will be paying $1.50 over spot on 100 oz. I would check out some other auctions of silver bullion. See what the things go for. There are people who will "forget" that they have to pay shipping but there are not many of them.
You cannot believe that there are not many, many people who have tried to make this work. Sure, you can sell the silver you bought at $35 profitably but you cannot replace it except by buying at market.
There are utterly immutable frictions involved with handling metals. If you do not learn that today, you will learn it the hard way, by paying it in your future transactions. A huge dealer like CNI or APMEX or even tulving makes probably less than a dollar an ounce UNLESS they are engaged in below-market buyback of silver products. If they make more than a dollar an ounce, it is because they are in effect market makers. I have no doubt they have people who hedge their inventory via silver futures, and that is a whole different area to master.
There are people who buy $1000 bags of junk silver and sell it off $10 at a time. Or 3 pounds at a time. You *may* be able to make some money doing that, but I think you will find that those auctions go for a skosh less than spot, in consideration of the freight that the buyer has to pay. I would urge you to do the math as to whether you can make a profit doing that. Do not regard one ebay auction as your proof-of-concept. To do that you'll have to buy shipping envelopes at a buck each and drive to the post office because you will need signature confirmation. How many $100 silver deals have to go south to eat the results of many other deals you make $3 each on?
By the way.........what did you plan to do to replace the silver you plan to sell when you run out of the 45 oz you have?