Hi all, wanted to know what dealers typically buy back silver when prices are higher. I started investing in January of this year. I have bought and sold over 180oz. I sold 80oz when silver was at $17.50. I got spot price for it and I was happy. I was at my LCS last week and bought 28oz for $1.25 over spot. I asked my dealer what his buy back would be and he said he usually buys back at spot but right now it would be $0.20 under spot due to high inventory. I called another LCS and they were buying back at $.25 over spot a few months ago and now they are buying back at $1.00 under. Anybody have experience selling silver when prices are higher?
Not that I think you've suggested otherwise, but what both are telling you is completely reasonable; both are paying prices likely determined by their individual markets. Buy backs with metals is generally different than with collectible/numismatic coins for the simple fact that prices/values are (again, generally) more volatale and dealers aren't in business to provide safety nets or guarantee returns; they can, at best, only pay what their market dictates while allowing for a modest stay-in-business profit. When prices rise it's not uncommon for people to want to sell compared to when lower, and this can often result, especially for smaller dealers/shops, in supply exceeding demand, which in turn results in slightly lower prices offered. With that said, if you're not comfortable with what's being offered, there's always the option to try to retail out on your own.
I have thought about retailing on my own at one of my coin clubs. For some reason 90% junk silver sells well there and I have been stocking up on that. My main reason for this thread is to get advice on a flexible exit strategy if I need to sell for some reason. My coin club only meets once a month but it would be a nice place to sell as getting melt value is pretty common. I find at coin shows getting melt value for silver is common too. I was just trying to get info on what LCS's do with the market and if anyone had experience selling when prices are higher.
You should never have a problem selling 90% at a decent premium over spot. The big dealers (apmex, jm, etc) routinely charge up to 4$ an oz over spot. Anything under that should sell easy I would think.
Thanks for clarifying. An exit strategy is wise, and you're right that there can be better options that shop dealers or dealers in general. The thing is, and as you're seeing, dealers are convenient and you're, in one way or another, paying for that convenience. This is one (of many) reasons why it is often said buying from a dealer to sell to a dealer is a losing proposition. If one's only real option is to sell to the same person they're buying from, they, for all sense and purposes, start out in the hole. Unless you need said convenience, you'd be wise to try and turn the tables by offering convenience to someone else. This is something I have much experience with, but take as you will. Monthly meetings, unless luck is in your side with timing, isn't a wise exit strategy imo, but it is a potential opening and one of many. I would suggest trying to make as many solid/reliable connections, be it just for selling or buying too, as is possible for your situation. There are a good number of people out there who buy and do so regularly, and many who prefer a reliable source without having to deal with storefronts, shows, paper, etc. Once you've carved out a little side market for yourself, as long as you're reliable and can under-cut shop/show prices, with the right outlets you should be golden, even when prices have somewhat risen. Just don't get greedy and remember more money can he made in long term relationships than in short. Perhaps it would be best put, and as the old saying goes, "it's not what you know, but who you know". I'm sure you get my point.
Thanks for the sound advice Books. Much appreciated. I go to a lot of coin shows that are usually affiliated with my coin club somehow. I have been making a lot of contacts with dealers that sell silver at fair prices and buy back at spot. You've given me a great idea on starting my own little enterprise buy finding buyers now. I'll get creative on that front. I go to a lot of coin shows in my area and two coin clubs a month, so it could be promising. If I get the ball rolling then I have to consider where I can get the best prices to buy and quickly sell to my clientele. Anymore advice on starting a bullion business would be great.
Its usually based on the "buy sell spread" http://www.jmbullion.com/investing-guide/taxes-reporting-iras/dealer-buy-backs/
Well, silver has dropped a bit since I started this thread. I made a small online purchase of 10 oz. Anyone buying and selling from dealers? If so what are your buy and sell premiums?
