Question for Dealers..

So have any of you dealers sold/bought copper pennies before? If you did was it a profitable venture and if not, why is there so many people looking for them? Seems a little illogical to hoard something with no market to me, but what do I know.

 

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When Cu was trading above $4 per pound, it could have made sense to sort 95% Cu pennies. You could fill a small flat rate box with ~20-24 rolls of pennies, so at about three rolls per pound, it was somewhat economically viable (again, if your cost of sorting worked out low enough) to sell them by the box.

One small flat rate box of pennies would sell for $20-$25. $5.75 for the shipping, $2.50 to eBay, and 75-cents to Paypal meant ~$9 in fees per package sold. If you assume 25% recovery rate on your pennies, you can probably get a roll of 95% Cu pennies every five minutes. So, 12 rolls per hour would mean two hours of labor per box of pennies. If you could justify $3 per hour, through slave labor in the form of children or interns, then it could make sense. Beyond that, I suppose if you had the capacity to sort TONS (literally) of pennies at a time with a machine, you might be able to squeeze $50 per processed ton. Outside of those two unlikely scenarios, sorting pennies had no real value. By contrast, stacking nickels had some value for a while. They required no sorting effort, and a $2 roll of nickels was worth ~$2.50 in nickel. Of course, if you didn't have an immediate source to liquidate to, you'd incur storage costs, which meant you were likely losing money, as nickel isn't dense enough to make storage viable.

 

Circulated copper for bullion? Or high grade / errors?

As far as bullion, where would you put them? I think they also made a law you can't melt US coinage for bullion but they should probably just get rid of the penny. It's stil costing us 3.5c for each copper-plated zinc.

If you had a bulk method of extraction (some ideas come to mind) and don't mind all the weight you could probably make profit off scrap. You'd have to work out the numbers and inlude gas, storage (if applicable) average yeild and supply sources. You can probably stil get bags from the bank which cost nothing.

Then you would need a rolling machine and supplies or bringing them back would be impossible. You ould always do it on a small scale first but unless you're going to pick through bags Id' come up with a separation mechanism based on either weight or chemical composition. You could probably just throw it into some liquid with the right viscosity but it's metal so you wouls need something with a high specific gravity. If that doesn't work, you might be able to play around with the fact that copper + HCl gives off H2 and zinc, zinc oxide. H2 is lighter. You don't want to completey strip the plating through, or blow yourself up (H2 isn't something to play with unless you have a good lab background.

Why am I rambling? This has been done before I'm sure it's in Google or patents.

There's also melting point but that's probably pretty high. If I recall though, zinc is pretty far up there. You'd have to check.

 

I just save any that I find in my change. I made a special bank, which I call "a bank too small to fail", and keep pre-82 pennies on one side and all nickels on the other. I pull them out and roll them up and keep them as bullion. I figure that eventually they will be worth more. Wheat pennies are going for around 10 cents a piece, so maybe some day pre-82's will be worth 5 or 10 cents as well.

 

My local deler has them for 3.50 a roll. Of course, I found only a few pre-1940's in there. Just another collection I might eventually finish ;3

EDIT: actually I guess that's not a huge difference, 3c.

I'm sure you could find bags of them for much less.

Don't banks still give you bags of crculated coins for face?

 

I may be behind but I'm thinking wheat cents can be bought for about 3 cents each.
Nothing wrong with saving copper cents but I don't see it as a way to make much. Maybe in 20 years.

 

Where are you going to store them all?

What about the logistics of selling them?

 

Okay, Wheaties are going for 7 cents, and you can get around 3 cents each for a roll of pre-82's. Maybe... It's still doubling and with wheats 7x your money. Try that in the stock market.

 

How about comparing the time and money you spend going to get the pennies and sorting through all of the pennies not to the stock market but to to a part time job? That is a more appropriate comparison. Point being no one gets rich doing it, its more of a hobby, something you do because its enjoyable to you more than a money making venture.

 

Exactly, it's a hobby, like coin collecting, but this one is really easy. Check out what you get in change, save out your pre-82 pennies and all nickels. We buy coins that have about their value in silver, so why not save out some pennies that will double their value the instant they are plucked out of our change. Not so bad. Free money.
I have even gotten some rolls at the banks, searched for pre-82, and wheaties and then returned them. Not getting rich, but I am holding my own...

 

I'm not a dealer, but I have a close friend who is one. People do occasionally bring him rolls of pre-1982 pennies and wheat pennies, hoping to strike it rich. They're usually quite disappointed to find out they aren't worth 3x or even 2x to the dealer. They're lucky if he offers them 1.1x face, just to keep them in the store with some money in their hand that they might spend on other coins.

I do save all pre-1982 pennies, but I'm not telling myself that it's anything more than a hobby. That way, if there is no profit in the future, then there's no hurt feelings.

 

If you can actually find someone willing to pay you $1/roll in cash locally, sell. Sell all you have. The likelihood of finding that, however, is minimal. It probably takes someone with good eyes 0.7 sec per cent to sort, and someone with not as good eyes 1.5 sec per cent to sort. So, assuming you have good eyes, you're looking at ~85 cents per minute or ~4300 per hour... assuming you're extremely patient and have no eye fatigue. Rolling adds ~3 sec per roll, so, you lose about 4-5 min per hour in rolling time, if you're hyper efficient. Let's assume a total yield (both 2.5g and 3.11g) of 78 rolls per hour. Of those 78 rolls, let's be generous and assume 30% 3.11g yield or 25 rolls of 3.11g per hour.

That would give you $12.50 per hour gross, assuming the following:

1) You can liquidate the 3.11g rolls at $1 ea with zero negotiation time.
2) You can liquidate the 2.5g rolls at 50-c ea with zero bank costs.
3) You can get to both liquidation points at near zero cost.
4) You get rolls for free.
5) You have a virtually unlimited supply of unsearched pennies at face.
6) You don't mind mind your hands smelling.

All of those assumptions are likely faulty to some degree or another, so let's figure on an initial cost of production at 20%. Now, of course, as you progress in your venture, you will see your yield rates decrease and your liquidation costs increase (banks will be less likely to offer you unlimited orders of pennies and some might be less willing to accept pennies back in bulk; your vendor who previously purchased 3.11g rolls for $1 might only pay 80-c, once they figure out that you have no other liquidation options).

So, at 30% yield and 20% production costs, your expected net is around $10 per hour pre-tax.

Every percent loss in yield equates to a 40-c/hr loss in gross, and every percent increase in overall production cost results in an additional 12.5-c/hr loss in net.

Additionally, sorting coins is an arduous task, so your efficiency probably drops about 10% every hour, if you treat it as work and probably more if you view it as a hobby.

You're never going to get rich by merely sorting coins, since you can probably only do 1-2 hours of it at a time before your drops in efficiency and yield take you out of the "above minimum wage" (and just marginally so) space. Accounting for the fact that most fast food joints will give you a free meal (usually equivalent in cost to an hour's wages) during your shift, you'd be better off getting any job that is legal. Now, if you're a foreigner who can't legally work in the US but somehow has full access to banking, an endless source of pennies, and access to other non-legal labor, it might be viable.

50 sweat shop workers earning $20 per day (10-hour shift) for sorting pennies would make it worthwhile to sort pennies, as they'd probably be as efficient as building/purchasing a sorting machine. However, there'd be some risk of shrinkage, so you'd need to pay security detail (five per shift) $20 per hour to ensure no one steals any of your pennies. Your total investment works out to $2000 per 10-hour shift for 50 sorters at 60 rolls per man-hour.

Assuming you're able to pull it off and not end up in prison, you'd be likely to yield 4000-5000 rolls per shift at a base investment of $4000-$4500 per shift. This includes simple face-value and labor costs. It doesn't include electricity, capital, warehousing or other acquisition/liquidation costs. So, even using sweat shop employees, you're only making a $500 per day, in an optimal setting where you don't pay for a building, lighting, liquidation, acquisition, transportation or storage. There are *much* better and far more legal ways of making 10% ROC for labor. Sweat shops aren't worth the backlash and potential legal problems, if you aren't at least quadrupling your investment in capital. That won't happen when your expected return on labor is 0-11%.

Now, if you truly can find someone paying 3-cents per 3.11g penny, I'll pay you 10% of the profit on every roll I sell for that information.

 

Whatever. Nice rant. I figure $10 an hour for time I spend watching the news or whatever is okay. You can do what you like with your time. Don't try to talk me out of checking my change and keeping whatever is worth anything and spending the rest. My Yankee frugality won't be dissuaded.

 

Lol. I don't think he was trying to dissuade you of anything sir. He was merely trying to demonstrate that it truly is a hobby, not a real money making venture compared to a job. That's all.

I loved his post, but then again I am an accounting geek.

 

Revi, I was dead serious.Edit: NK ,I gave you the first one above as a verbal point, but to repeat a financial offer a second time is advertising...so don'tI'm not attempting to dissuade anyone from doing it as a hobby, but anyone thinking they'll get rich doing it is gravely mistaken.

 

That's quite a post NorthKorea. One thing that could throw your numbers off by quite a bit would be automation. It is possible to automate the sorting and greatly increase ones time efficiency.

Also, I see no need to roll the pennies in the end. My bank will not take rolled coins. They require them to be turned in loose to feed through their counter.

The 90% copper pennies could also be sold by weight, eliminating the need for rolling of those as well.

Not that I encourage anyone to do this for profit since doing so is essentially at the expense of the taxpayers, but I just figured I'd throw these points out there...

 

As they say, Copper is the poor man's gold.

 

No, that is silver.........

 

Hah hah. Fine fine... I won't.

I thought I addressed automation in the post prior to the one where I outlined the slave labor business. If you have the capital necessary to purchase automation equipment and a bank that isn't charging you to deposit literal tonnage of pennies, then it could be a viable business, assuming you also owned a refinery outside the US. I really don't think it's viable, either way, since transportation and storage costs become larger scaling issues when you go the automation route.

 

my bad, Copper is the poor man's silver!