Viability of a new “Cash 4 Gold” business in 2025

[Jake]

Hi everybody! New member here just looking for some insight on a subject I couldn’t find many recent threads on.

My partner and I are in the process of starting a brick and mortar “cash for gold” business in the heart of downtown of a 2.5M population American city who’s main industry is tourism and gambling. We’ve applied for all the necessary licenses and permits, have sufficient liquid assets to bankroll our startup, have purchased a portable XRF machine (Thermo Fisher Niton XL2), own the property and office space outright where our business will be located, etc.

What is the viability of this type of business in 2025? From what little I’ve read on this forum, I know that marketing is probably the biggest factor in terms of who is successful and who is not. We plan on heavily marketing the business online using pay-per-click ad campaigns. We’ve designed our location to be very competitive as far as attracting customers. For example: our central downtown location will be built into an existing Criminal Defense law firm. 95% of that firm’s clients pay cash up front to retain representation for their legal matters. The idea is to offer the gold buying service as a financing option to clients who might otherwise have to obtain money from their friends or family in order to hire an attorney.

As I said earlier, we will also be investing in other marketing options to reach potential new clients, especially (if not exclusively) online.

As far as security is concerned, we are taking a small private office located inside the law firm and converting it to be a secure space complete with bulletproof wall panels, a walk-up “bank teller” style window with adequate ballistic glass for handling all transactions, and a controlled entry ballistic grade door. Cameras are already installed at various positions throughout the entire law office building and additional cameras will be installed to cover the secure office space where the gold/cash transactions will occur. Inside the 12x10 foot secure room will be the XRF machine, a computer and printer, a large safe, scales, etc. Also of major note is the fact that two, armed security guards patrol the law building during business hours and, once we open for business, one of the guards’ duties will be tailored to patrol and oversee primarily the law office’s reception area and the controlled access hallway leading up to the bank-style teller window and C4G office door. Keep in mind that there are about 100 law office personnel working in offices within the same building as the cash for gold office.

What am I missing? Any advice as to equipment, additional security measures, marketing?

There are two competing cash for gold locations within 1-2 blocks of us. One is a pawnshop.

That’s about all I can think of for a first post. Thanks in advance for your attention and advice!

 

[4metals]

I don’t for-see many clients coming in with large quantities of precious metals to sell, I mean who goes to Vegas with all of their jewels in case they need cash? But it is easy to settle little onsey twoosey lots on the spot. But, in most American locations the police require over the counter purchases to be held for at least 2 weeks to have the goods available for the police to inspect if there are reported thefts. Since you are buying inside a law firm that requires cash up front from clients, the possibility of something you buy being stolen is real.

But the actual melt sample and analytics involved is the easy part. If you can get the metal in, putting together composite lots and getting good rates from a major is easy.

Welcome to the forum.

 

[Jake]

I don’t for-see many clients coming in with large quantities of precious metals to sell, I mean who goes to Vegas with all of their jewels in case they need cash? But it is easy to settle little onsey twoosey lots on the spot. But, in most American locations the police require over the counter purchases to be held for at least 2 weeks to have the goods available for the police to inspect if there are reported thefts. Since you are buying inside a law firm that requires cash up front from clients, the possibility of something you buy being stolen is real.

But the actual melt sample and analytics involved is the easy part. If you can get the metal in, putting together composite lots and getting good rates from a major is easy.

Welcome to the forum.

Part of our licensing requirements is that all secondhand precious metals goods be held for 30 days so we’re already expecting that. There’s a refiner in town whose website claims they pay “up to 99%.” I assume that’s what they’re paying only for quite large sums of gold?

 

[Jake]

I don’t for-see many clients coming in with large quantities of precious metals to sell, I mean who goes to Vegas with all of their jewels in case they need cash? But it is easy to settle little onsey twoosey lots on the spot. But, in most American locations the police require over the counter purchases to be held for at least 2 weeks to have the goods available for the police to inspect if there are reported thefts. Since you are buying inside a law firm that requires cash up front from clients, the possibility of something you buy being stolen is real.

But the actual melt sample and analytics involved is the easy part. If you can get the metal in, putting together composite lots and getting good rates from a major is easy.

Welcome to the forum.

Also, regarding tourists and gamblers: Many young people travel to Vegas with their jewelry in order to look their best and perhaps “impress” others as they play in the casinos and nightclubs. I doubt any of them bring their jewelry as a premeditated way of paying for anything on their vacation, but that’s thinking too hard about it. If you don’t believe me, just watch any of our local competitor’s TV show episodes aka “Pawn Stars.” They pay very low rates for gold jewelry but that didn't stop tourists and especially gamblers from finding their shop and selling their chains.

 

[4metals]

Yes rates as low as 1% are possible but it is on larger lots. And if you want money from the refiner quickly there is interest you pay. And the gold price is quite volatile today so settlements need to be on futures pricing if you have to hold for 30 days. And I just assume you can, or have an employee who can, evaluate diamonds.

Don’t be surprised when folks come in selling you the crowns the dentist removed. Dental appliances are big money for refiners these days as is crematory scrap.

As far as refining goes all you need is a furnace and a hood, a few molds and you can be melting and shipping with a few days practice.

 

[4metals]

If you don’t believe me, just watch any of our local competitor’s TV show episodes aka “Pawn Stars

I actually met Rick from Pawn Stars at a clients refinery, almost all of his filmed buys are scripted for the camera. Makes for good TV I guess.

 

[Jake]

Yes rates as low as 1% are possible but it is on larger lots. And if you want money from the refiner quickly there is interest you pay. And the gold price is quite volatile today so settlements need to be on futures pricing if you have to hold for 30 days. And I just assume you can, or have an employee who can, evaluate diamonds.

Don’t be surprised when folks come in selling you the crowns the dentist removed. Dental appliances are big money for refiners these days as is crematory scrap.

As far as refining goes all you need is a furnace and a hood, a few molds and you can be melting and shipping with a few days practice.

Good advice. I don’t have anyone currently who knows how to evaluate diamonds. I wasn’t planning on offering any money for customers’ stones in jewelry. This may or may not be the best way to go, but it’s consistent with what I’ve seen in the other cash for gold retail locations around town in the past year as we were doing our reconnaissance and due diligence before putting any money into our own business.

Dental gold will be sort of gruesome but will make for great laughs (and profit!)

Really? Refining can be that simple? Simple enough to do onsite? I’d like to hear more about this

 

[Lou]

Good advice. I don’t have anyone currently who knows how to evaluate diamonds. I wasn’t planning on offering any money for customers’ stones in jewelry. This may or may not be the best way to go, but it’s consistent with what I’ve seen in the other cash for gold retail locations around town in the past year as we were doing our reconnaissance and due diligence before putting any money into our own business.

Dental gold will be sort of gruesome but will make for great laughs (and profit!)

Really? Refining can be that simple? Simple enough to do onsite? I’d like to hear more about this

It can be that simple. Depending on volume, you can also dispose of the fine metal for a premium to jewelers in your city.

 

[Jake]

It can be that simple. Depending on volume, you can also dispose of the fine metal for a premium to jewelers in your city.

That would be ideal, whether selling it to jewelers or selling on ebay or elsewhere

 

[4metals]

Really? Refining can be that simple? Simple enough to do onsite? I’d like to hear more about this

As Lou said, you may be able to sell refined gold at a premium in your city. Unfortunately I said may, and not will, be able to sell it. If you are a good marketing person maybe but that remains to be seen in time.

Let me explain, let's assume you want to refine your purchases to make fine gold to sell locally. It's your lucky day. Karat scrap gold is the easiest feedstock to refine. With the proper setup, some refining hoods, a fume scrubber, some reactors and a knowledge of the chemistry you can have a shop where you can refine in house and sell all of your product locally. The hardware alone will cost you around 100K. This is definitely not something to do in the law office building. I have set up refineries to do exactly what I have described (when I was younger, I am retired now and loving it) and the truth is today it is not wise as you will not compete with the majors in the US. This thread here will give you an idea of the type setup I am referring to.

What most refiners on the scale you are suggesting (known in the industry as collectors) melt their gold into bars and ship to major refiners at very favorable rates. The only refining they do in house is called chemical stone removal which involves refining the gold to recover the diamonds and gems for resale and shipping the refined gold with the karat you ship or if you have a smaller market selling it locally, all quantity dependent. What a lot of guys do is take some of their payment as gold shot which they can sell to local jewelers if the market is there. If you can develop your business to the point where you can refine in house and sell it all then you are a good salesman. A good business plan will have you establishing a business and shipping melted and sampled bars to a major refiner. If you find you generate a lot of goods with stones you can set up with a small lab to do chemical stone removal in house. But that is both relatively easy to do and something to do when you really feel you need it, not before.

I think your biggest accomplishment would be to work out a deal with the local authorities to cut down or eliminate the 30 day hold as that is big. I have a client who was able to eliminate that requirement by using local politicians and a combination of quality images of all purchases and picture ID's of all sellers. It is worth trying.

 

[Jake]

As Lou said, you may be able to sell refined gold at a premium in your city. Unfortunately I said may, and not will, be able to sell it. If you are a good marketing person maybe but that remains to be seen in time.

Let me explain, let's assume you want to refine your purchases to make fine gold to sell locally. It's your lucky day. Karat scrap gold is the easiest feedstock to refine. With the proper setup, some refining hoods, a fume scrubber, some reactors and a knowledge of the chemistry you can have a shop where you can refine in house and sell all of your product locally. The hardware alone will cost you around 100K. This is definitely not something to do in the law office building. I have set up refineries to do exactly what I have described (when I was younger, I am retired now and loving it) and the truth is today it is not wise as you will not compete with the majors in the US. This thread here will give you an idea of the type setup I am referring to.

What most refiners on the scale you are suggesting (known in the industry as collectors) melt their gold into bars and ship to major refiners at very favorable rates. The only refining they do in house is called chemical stone removal which involves refining the gold to recover the diamonds and gems for resale and shipping the refined gold with the karat you ship or if you have a smaller market selling it locally, all quantity dependent. What a lot of guys do is take some of their payment as gold shot which they can sell to local jewelers if the market is there. If you can develop your business to the point where you can refine in house and sell it all then you are a good salesman. A good business plan will have you establishing a business and shipping melted and sampled bars to a major refiner. If you find you generate a lot of goods with stones you can set up with a small lab to do chemical stone removal in house. But that is both relatively easy to do and something to do when you really feel you need it, not before.

I think your biggest accomplishment would be to work out a deal with the local authorities to cut down or eliminate the 30 day hold as that is big. I have a client who was able to eliminate that requirement by using local politicians and a combination of quality images of all purchases and picture ID's of all sellers. It is worth trying.

Great advice, thank you!

 

[4metals]

It is really quite remarkable the advice that is given about the industry here at the Gold Refining Forum is given for free. A good number of successful refiners across the world have learned or improved their processes here. We are a diverse group and that is a significant part of why it works. Stick around @Jake and you will see.

 

[jobinyt]

Why wouldn't a small payment on the stone value give you the reputation of being the best place to sell - there-by upping your total volume?