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?

 

[Jake]

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?

Hadn’t really thought about it due to my lack of knowledge re stones. It’s not a bad idea at all, I just wonder what gaining the necessary knowledge and additional tools and equipment would entail

 

[4metals]

This is what AI has to say about it;
a trained gemologist at a reputable gemological laboratory, like the Gemological Institute of America (GIA), analyzes the diamond and issues a certificate detailing its characteristics, including the cut, color, clarity, and carat weight, using a standardized grading scale; this process is considered the industry standard for verifying a diamond's quality and authenticity.

Personally I cannot tell a diamond from a CZ but the Gemological Institute has classes to certify folks to be qualified. The folks I have known to send employees for this certification say it takes about 6 months of study. However most decent jewelers have the staff expert who can do it as well, so a business arrangement, much like the Pawn Stars bringing in an expert who is a phone call away, would help you get started.

As in any buy sell arrangement, jewelers and pawn shops try to buy low and sell high and there is room for small variations in all classes of stones for this to have survived over the years.

 

[Jake]

This is what AI has to say about it;
a trained gemologist at a reputable gemological laboratory, like the Gemological Institute of America (GIA), analyzes the diamond and issues a certificate detailing its characteristics, including the cut, color, clarity, and carat weight, using a standardized grading scale; this process is considered the industry standard for verifying a diamond's quality and authenticity.

Personally I cannot tell a diamond from a CZ but the Gemological Institute has classes to certify folks to be qualified. The folks I have known to send employees for this certification say it takes about 6 months of study. However most decent jewelers have the staff expert who can do it as well, so a business arrangement, much like the Pawn Stars bringing in an expert who is a phone call away, would help you get started.

As in any buy sell arrangement, jewelers and pawn shops try to buy low and sell high and there is room for small variations in all classes of stones for this to have survived over the years.

Sure wouldn’t mind an additional stream of income. This warrants further research. I’ll talk to my partner about teaming up with a local jeweler for stones

 

[snoman701]

I'd open before you start investing in the idea of valueable stones. DIamonds aren't worth what they used to be, and gems aren't worth anything until they are sold. Further, only gems with a Mohs >9 retain their polish, so even though you've got a big emerald, it's going to need to be recut to repolished to the tune of $50-75/carat. Then, any valueable stone will also need a dossier of some sort, and that costs a couple hundred once you ship it insured to GIA and back.

Then, all you need is a buyer.

Seriously, just concentrate on the metal. Once you've established a good business, start looking for more profit by selling to wholesale buyers of estate jewelry.

A lot of these buying operations are owned by estate / antique jewelers. The gold buying pays the bills, the premium on antique and resellable estate is what makes the real money. It's not a big premium, but anything over 99.5 is profit.

 

[4metals]

If you ever grow to the point where you can buy the stones based on evaluating them in their settings and accumulating the material until it gets up to the 5-10 ounce size it is a perfect quantity to process in 4 liter beakers in a small lab hood. Actually a 4 liter beaker can process 15 ounce stone removal lots. Then you can generate the fine gold and clean diamonds. Since the diamonds are tough to identify without handling, a common treatment is to soak the diamonds in a solution of hydroflouric acid which discolors all of the fake stones but leaves diamonds untouched for fast sorting.

Cleaned diamonds can be hand picked for the larger stones and sold as melee to someone like the Rappaport's at www.Diamonds.net The price of natural diamonds has fallen considerably due to lab grown diamonds of late but they still have value.

While diamond buying isn't as profitable as it was the people you mentioned bringing their best bling to show off in Vegas still have stones worth a few thousand. So having done your homework will help make you more profitable. Believe me, if you turn them away, the jewelry store will not. Then again you could always send them to a jeweler you work with and do the stone removal for him and you get the gold and he gets the diamonds. Charges for stone removal make for profitable refining.

 

[4metals]

so even though you've got a big emerald, it's going to need to be recut to repolished to the tune of $50-75/carat.

What usually happens to emeralds is they emerge from the acid showing micro cracks which are fissures in the surface. They were likely there before but the acid removes the masking technique emerald dealers use to cover up the cracks by oil enhancing the emeralds. It is supposedly illegal to oil enhance an emerald but why have I seen so many emeralds needing oil enhancing after the acid which does not effect the emerald? However hydroflouric acid will etch an emerald so they need to be picked out before treatment. Actually all colored stones and opals that are in a lot are typically picked out loose before HF treatment.

As with many businesses, location matters. If I opened up a refinery catering to pawn shops and jewelers where I live I would starve. I would do great with a bait shop though. I think the business model @Jake is discussing, where he is planning it, can work. Not so much if he was selling bait.

 

[snoman701]

What usually happens to emeralds is they emerge from the acid showing micro cracks which are fissures in the surface. They were likely there before but the acid removes the masking technique emerald dealers use to cover up the cracks by oil enhancing the emeralds. It is supposedly illegal to oil enhance an emerald but why have I seen so many emeralds needing oil enhancing after the acid which does not effect the emerald? However hydroflouric acid will etch an emerald so they need to be picked out before treatment. Actually all colored stones and opals that are in a lot are typically picked out loose before HF treatment.

As with many businesses, location matters. If I opened up a refinery catering to pawn shops and jewelers where I live I would starve. I would do great with a bait shop though. I think the business model @Jake is discussing, where he is planning it, can work. Not so much if he was selling bait.

Colored stones following stone removal are generally worthless either way. Maybe rubies or sapphires, but the ones that are worth while should be pulled ahead of time.

The kind of stones you would pay on anyway would be removed prior to refining, or more likely, the piece of jewelry would just be sold on to dealers. These days, gold buyers should be talking with jewelry buyers...they can charge anywhere from 100% of melt with stone weight to 10% over melt for cash....no worries about a 6 week settlement at Metalor.

Melting and refining is great for jewelry that was sold at JCPenny, Sears, KMart, etc....if you get anything interesting that was made prior to 1950 that is in reasonably good condition, it should likely be sold as is. With high gold prices, estate jewelry is selling like crazy right now.