Lcs bullion prices

How low do pm prices have to drop before your local coin shops start dropping bullion prices? Example .....the store frequent is still is charging 35 for 1 oz sillvertowne bars and rounds. Is there a set amount of time before they lower their prices to recoup their losses? I even told them I think a seven dollar premium is quite steep when directly from sillvertownes site I could get one for 31 and change with free shipping.

 

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Buy from provident metals or APMEX or from someone on here. I went to my local shop today, still had silver at $34/oz.... Didn't look at generic. 2013s were $38. I'd buy online if you're looking to buy. The only one from personal experience is Provident, excellent experience with them every time. If you're on FB like them, they occasionally give away free 1oz silver coins/bars.

 

That's really up to the lcs, I paid $30 today per ASE.

 

I ended up trading 2 cull Morgan's and 10 bucks for a 96 ase and a sillvertowne bar. I couldn't bring myself to pay the premium they wanted. I'm thinking I still did alright with the trade but 7 dollar premium for generic bars is just too much!

 

The local shop by me has a live price chart that follows spot so you always know what your going to pay as you walk in. I think its 4 over spot for ase which is a bit steep. But generic is 1.30. This is the store and the price chart http://www.goldsilversupply.com/current-prices

 

The shop I go to is Live Spot plus their premium, But if I buy online there is No Tax so it saves Me a little bit of cash.

 

Dealers will charge whatever they think they can get. Its their right. They are banking on many people not being up on what is happening to PM prices.

I would suggest going to a show. What is great about a show is the dealers trying to charge high rates are matched up right next to ones not doing so. You can very quickly price shop. At shows here junk is selling for about 21x face, and I am expecting it to be cheaper at the next show. I always keep up with prices, even if I am not buying.

 

Depends on demand. Last time I was at MFD he was paying spot for back dated ASEs and selling @+4, with the exception of 2013 selling @ +7.

 

Here at tradernicks we try to be as fair as possible. Although the spot price of silver goes down as do our prices there might still be a prem on the coin but the price still goes down due to the market some people are greedy but what can you do

 

My best LCS is spot + $1.25 generic, +$2.25 older ASE, +$3 on new ASE/ML. Other bullion it just depends on what it is.

Another LCS that I frequent, they try to take into account what they paid and charge about $3 over. Since the last lot of silver was bought new around $30, they are pricing themselves a bit high at the past days.

 

That make plenty of sense to me. Why would they buy at one price and want to sell for lower than they bought? Unless they were trying to unload some capital I would just hold onto them until silver rose again instead of taking the loss if I were the seller.

 

So if prices continue to fall will coin shops adjust billion prices or just take it off the shelves until they rise enough to make profits? Sorry for all the questions, I'm new to the bullion game!

 

Because this is false logic. Not saying its not prevalent thought, but still false.

The coin store loses money every day silver goes down. They make money every day it goes up. They may not see it on an invoice, but its true.

Do you think if they bought it at $30 silver they should sell based on $30 silver? If you do, that is your opinion, but do you REALLY think they will sell based upon $30 silver if the price spiked up to $40? No? Kind of unfair isn't it? You are saying you are fine with them making all of the profit, but making the buyers take all of the losses.

The problem with "holding it until it goes back up to $30" would be:

1. Maybe they have cash flow needs before then
2. Most buyers will not buy if they are out of line price wise
3. What if it DOESN'T go back up for a few years?

Businesses need to turn inventory. They are not in the long term buy and hold business. If they were, they do not need to own a store.

Now, against this backdrop people should simply comparison shop harder. It is true many dealers are still trying to charge based upon the market they bought it at. Don't let them make YOU pay for their losses, since by gosh they would not be returning the favor and letting you buy at $30 if today's silver price were $40.

Why be a sucker?

 

It's all about supply, demand, and how business itself is doing. And, this is really broad general, it doesn't have to apply to only bullion dealers, but it is amplified here due to the volatility that is in the market and can cause pretty significant price swings in very short amounts of time.

No one wants to take a loss on anything, especially when the roof over your head depends on it. Take too many losses and well, you're out of business. However, hold on too long to where you have no cash flow at all, again, you'll still probably be out of business, or really really hurting for a while until you can recover.

I think there's no tried and true answer to this question, it really is "it depends", and a lot of it has to do with the above.

The places that do volume will obviously have the best pricing, which will usually trend along with spot. They are able to move hundreds and thousands of coins a week or even a day. At that rate, even a few cents above cost is still garnering a profit, and your premiums are where they make up the main difference between yesterday's spot and today's spot if it's negative.

The places that buy on smaller volume tend to take the most risk and hurt the most when spot dips like this as quickly. They can't move the product as easily which has 2 side effects - they are behind the curve for pricing, and if they're not selling as much they're not bringing in cash flow which would allow them to purchase more at a lower acquisition cost to steady any losses - cost averaging.

At some point if the market doesn't recover or at best at least stagnate, I would think the shops would have to adjust prices down to where they can move the inventory. They will take a loss, but they will turn over old inventory providing cash flow, and hopefully the inventory they acquire today will rise in price to make up for the losses they incur. How long before they do that really depends on how long they can handle waiting before it hurts. It also depends on whether the other business they do can help offset the losses on the bullion side.

 

Another way to look at it is to ignore what they paid.

Think of it this way. A store has to have an inventory. Lets say they need to carry 100 ounces. They buy and sell every day, and average always around 100 ounces of junk silver. So, TODAY they might be paying 18x face, (or less) reflecting a $27.xx spot market. So therefor TODAY you should be paying 19.5-20x face ALSO reflecting a $27.xx spot market. Today's SELL price is what you should be basing today's BUY price on, not what the dealer paid. He could have bought his base stock in 1992 paying $4 an ounce, or 2010 paying $40. Does it matter to you? It shouldn't.

Just another way to look at it.

I am simply showing everyone this stuff so they don't "feel guilty" about only paying $28 when the dealer pulls out the sob story about how they "paid $33" or whatever. Dealer's never tell you a "sob story" when they are profiting $5 an ounce based upon market levels. So, toughen up, ignore any sob stories you might hear, and strictly make your purchase decisions on todays market and what price you wish to pay. If a dealer loaded up at $34 in anticipation of higher markets, he was greedy and that is HIS problem, not yours. It would have been HIS profit if it went up, so it needs to be HIS loss now, not the PM buyer's.

 

My LCS is selling generic rounds at $30 and ase's at $33, both seem fair to me. If it was as high as $35 for a round I would look elseware or try the store again in a week to see if they adjusted their prices.

 

There's no rulebook that local coin stores must follow. In the end, it's up to the owner of the store on how they manage their inventory and set their prices.

But, like Medoraman said above, a store should earn its profits on moving inventory. They have a buy/sell margin that allows them to earn money on flipping bullion 99% of the time. If the price falls too fast for them to earn a profit on bullion they've purchased, how is holding onto it going to help? Especially if the price never recovers.

 

Really? What do you think they would pay today for a box of these from the wholesaler? Do you think they will be paying the wholesaler based upon the market the wholesaler bought them in or today's spot market? Do you think they are buying ASE's at $30-31 today off the street?

Just curious sir why you believe its "fair" for an ASE premium to be over $6, and a generic round premium to be over $3. Are those normal premiums you expect to pay?

 

I'm guessing they pay almost $30 for ASE's wholesale. That would give them a $3 premium or 10%. Not much profit I'd say but that isn't up to me to decide for you or anyone. It's up to the buyer to. Just like the dealer has to figure out what he thinks is a price he can afford to sell them for. So yes I still think what I said $30 for generic rounds and $33 for ASE's is fair for both parties.

 

You are right sir its up to everyone for decide themselves. I know I can buy as many ASE's as I wish from Liberty Coin for $30.01 right now, and generic rounds for $27.97 from Provident, so that is my basis of comparison.