JM Bullion has "extreme order volume" 5 to 10 day delay and $299 minimum order size

Wowza! While I'm relatively new, this seems crazy. Has this happened previously?

 

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Just got that email from them too. First time I've seen them do it since I started collecting in 2012.

 

Huge buying is occurring because of the recent dip in prices.

 

These are some crazy swings.

 

I'll say this, bullion buyers have more conviction that stock buyers.

 

Maybe they have info we don't have, which I am fairly sure.

 

And my mother bought an ounce at the MAX - $1787 from Apmex. Ouch

 

I'm pretty much done with them.

 

Same at Provident

 

wasn't Provident bought out recently .. one of the other big ones ?

edit: JM Bullion bought ProvidentMetals Oct 18th, 2019.

 

I want you to think more about this $299 minimum order for free shipping and what that means.

The cost to ship 5 or 6 ounces of silver is now over $4. ($4.60 to be exact). But let's just say $4 to keep it simple.

Suppose I place an approximately $99 order to get free shipping in the old days. I buy 6 ounces of whatever silver that has a $1.50 premium attached to each ounce. Let's say silver is about $15 at this point. (It it is now actually even lower)

6 ounces x $16.50=$99 gets me free shipping.
Shipping cost is about $4. JMBullion effectively takes only $95 from my order. Divided by 6 generic ounces equals about $15.83 per ounce.

Now if we back up here to look at silver prices in earlier March, Feb, or Jan, or Dec, or Nov silver was pretty steadily at an average of $17 an ounce.

JMBULLION IS VERY LIKELY LOSING MONEY RIGHT NOW because they have been buying silver stock at around $17 at ounce. Maybe even $16 an ounce if they placed their own order a year ago as any smart bullion dealer would do. But even at $16 an ounce, they are losing money selling small orders with free shipping.

This move to give free shipping only on orders of $299 or more changes this calculation. At $299 for free shipping, I would instead have to buy 19 generic ounces at $16.50 each. The cost for JMBullion to ship this order is $8.25 flat rate. So now that $313.5 order of 19 generic ounces loses $8.25. Meaning JMBullion nets $305.25. Or $16.06 per generic round. In this scenario of selling silver they bought for $16 at ounce, they're about breaking even.

This is why they have upped the free shipping minimum order amount. I know many of you already knew this. Some of didn't, so I hoped I helped. But the conclusion for all to think about is this should worry us, because the only reason JMBullion would do this is if they weren't making money by giving free shipping at $99. We should be concerned if the big dealers are losing money, because it means they have very much been caught off guard by this as well. They didn't place their own silver orders far back enough to have purchased at a lot low enough price to deal with this sudden drop in silver prices. And if the big dealers aren't prepared for it, imagine how the little guy is doing in.

 

I don't think that's the right model for what's happening. They aren't speculating in the metals. If they were, they would've all gone out of business during the long slide from 2011 to 2016.

As I understand it, they look at replacement cost -- they'll sell 100 ounces at $16 if they know they can buy 100 ounces at $15 the same day, and they do so right away. It doesn't much matter whether they bought "that" 100 ounces at $18, or if the they have to sell "the new" 100 ounces at $14 tomorrow. They only get into trouble if they can't buy and sell, at the same time, with a profit margin between their buy price and their sell price.

 

I went to a jeweller earlier this week, he was lovey dovey.. Today, spot plus $5. Told him I'm never coming back. If he's not going to treat me fairly, I don't trust him. I went to LCS and bought 40 ozs at spot. No shipping no tax no hassles.

 

I haven't looked at Platinum APE's in a while since they started climbing mid 800s.
Now .. wow ... under $800 again .... I'm gonna check real quickly just to see what the premiums are right now.

Gold is still too high for my liking ...

 

You're 100% correct but only for part of their business in dealing with customers who from them and sell to them. Bullion dealers make their money on the margins. They must buy and sell at all times regardless of price and make money on their premiums. You are correct.

HOWEVER, Everything you said does not apply to orders they would place from the US Mint, RCM, etc. All those government mints, all those private mints get orders from bullion dealers at a certain period of time. When did JMBullion lock in a price for 2020 Eagles? When silver was $17 an ounce, $16 an ounce, $18 an ounce? Who knows.

So what I am imagining is that what we are seeing now at JMBULLION is A) customers doing a lot of buying from JM and very little selling of "used" bullion to them. So JM and others are running low on stock and B) customers are also buying a lot of their "new" bullion JM bought from government and private mints at unknown prices (but prices probably higher than we're seeing today).



But seeing that they are upping their free shipping offer to triple the order size indicates to me their margins are suffering right now.

 

That seems likely, but it also seems likely that they're being crushed by order volume, and increasing the minimum order size should help with that as well.

 

Worth mentioning that any reputable bullion dealers hedges its physical inventory with short contracts on the Comex to offset losses realized in situations like we see now.

Literally the main reason gold and silver paper futures markets exist, to ensure solvency of those with the stones to sell metal on tight margins.

Ymmv

 

Got up early this morning, clicked on stocktwits and seen Yamana GOLD at 2.29.. Bought and it dropped too $2.24
Anyway, this is the time to play with your TD ameritrade gambling account. Now at $3.00 a share it is and was a steal. But for some reason it was down 28% this morning. I think the BIG traders steal shares from people that set loss limits

 

I thought those Comex accounts were so that the Banks can CONTROL pricing by shorting GOLD and Silver. At least that is what they have been doing for past 25 years.

 

I would love to believe your account of what it is... But I know these BANKSTERS, why several are under indictment as we type, for shorting and manipullating prices. Also why the PAPER PRICE and BULLION PRICE will decouple.

They will never, nor ever be able to meet the demand for the calls. They would literally need as much GOLD as Russia holds to cover. That shows just how crooked and obtuse the paper gold market really is...