Scrap Gold Help

[lindokpm]

Hi,

i have been buying scrap gold and silver and selling it on to refiners for a few months. it a good business but the returns are not that high considering the amount time and money which we are paying for advertising. So i started thinking about refining the gold and silver myself to get to the other metal, like copper and silver etc..

Can anyone tell me if this is really worth while doing or should i just swallow the fact that i am giving away some of my profit to the refiners for nothing !


Really need help, all comments welcome

LGB: Keith :roll:

 

[martyn111]

hi keith
Welcome to the forum.
This exact subject was discussed very recently on the forums, click on the link below for the full discussion

http://goldrefiningforum.com/phpBB3/viewtopic.php?f=43&t=10986

 

[lindokpm]

Hi,

Thanks for the reply, however having read the discussion i am still more than confused!

Let me explain,

I started this business online 2 months ago, i have no retail outlet; therefore my business is wholly dependent on potential customers liking the rates we are posting online and posting their gold or booking an appointment for a home visit. The difficulty with an online business is always the level of competition you encounter with other more established businesses that have what seems to be limitless advertising budgets and their own refineries.

In the UK potential sellers have a vast choice of refiners all offering 92%-95% for scrap gold with the exception of a few companies like Cash4gold UK, Tesco's ect...who offer considerably less. So my problem is how do i compete? In most cases i can offer my customers 85%-90% of the value of their items, which i then sell on to the refiners to make my margin, at present the volumes of gold we offer to the refiners are small compared to the levels of cash we are spending on advertising so it hardly seems worth it !
I realise at this end of the market it is definitely a volume based business i.e. the more you take in the more you get out, however other than opening a retail outlet i am looking for ideas to increase our profit margins within the current structure of the business.

 

[nickvc]

Keith what percentage of fix are you getting? That could be one way to increase your margins without extra cost, refining is not for everyone and takes a good understanding to even begin the processes as it has many inherent dangers. It is also volume related as the time, costs and equipment are nearly the same for 100 grams or a kilo of gold scrap. If the volumes are reasonable maybe melt your scrap into a bar and get an assay, cheap here in the UK, as this takes the guessing out of the equation for both you and your buyers a better price should be offered.

 

[lindokpm]

Hi Nickvc,

The fix tends to vary from 95%-97% depending on the amount of gold..I have been considering melting the gold down, however the price of Gold is on the move so i figure, it's better to dump as much stock as possible before the price start to fall.


LGB: Keith

 

[nickvc]

I'd try to get your buyer to stick to one % preferably 97% or better if your getting cheque payment, cash actually costs more to handle so returns are usually lower. I dont know the dealers in London but I know NTR metals has an office there and my experiences with the Birmingham office would lead me to suggest you try them, I can't vouch for many others but the big boys like Cooksons or Bairds might also be worth a try. Most dealers pay less for scrap then bars as I pointed out before but it's then in your interest to make sure what you buy is what it says no springs, stones or dirt or plated base metals you take the risk but get a better % payout.

 

[lindokpm]

Thanks Nickvc , will give it go on the next batch of gold...

by the way, What do you think, is renting a shop unit a better way to go rather than pouring money into never ending online advertising

LGB: Keith