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<p>[QUOTE=&quot;Prime Mover, post: 1680298, member: 38783&quot;]It&#039;s all about supply, demand, and how business itself is doing.&nbsp; And, this is really broad general, it doesn&#039;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.</p><p><br /></p><p>No one wants to take a loss on anything, especially when the roof over your head depends on it.&nbsp; Take too many losses and well, you&#039;re out of business.&nbsp; However, hold on too long to where you have no cash flow at all, again, you&#039;ll still probably be out of business, or really really hurting for a while until you can recover.</p><p><br /></p><p>I think there&#039;s no tried and true answer to this question, it really is &quot;it depends&quot;, and a lot of it has to do with the above.</p><p><br /></p><p>The places that do volume will obviously have the best pricing, which will usually trend along with spot.&nbsp; They are able to move hundreds and thousands of coins a week or even a day.&nbsp; 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&#039;s spot and today&#039;s spot if it&#039;s negative.</p><p><br /></p><p>The places that buy on smaller volume tend to take the most risk and hurt the most when spot dips like this as quickly.&nbsp; They can&#039;t move the product as easily which has 2 side effects - they are behind the curve for pricing, and if they&#039;re not selling as much they&#039;re not bringing in cash flow which would allow them to purchase more at a lower acquisition cost to steady any losses - cost averaging.</p><p><br /></p><p>At some point if the market doesn&#039;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.&nbsp; 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.&nbsp; How long before they do that really depends on how long they can handle waiting before it hurts.&nbsp; It also depends on whether the other business they do can help offset the losses on the bullion side.[/QUOTE]</p><p><br /></p>

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