So I visited a "we buy gold" kiosk at the mall today

[Cu Penny Hoarder]

I was bored today so I figured it would be interesting to visit one of those "we buy gold" kiosks at my local mall today. I brought a 1oz Canadian gold maple leaf with me. I approached this cute little girl (she had to be about 20-22 year old) and asked her what this was worth. Her eyes bugged out of her head so apparently she knew what it was. She said she needed to call her boss at home for the price. Spot gold was $1856/oz at that moment. After a brief back and forth with her boss, she turns to me and says $1500 I took the coin back, said thank you and walked away laughing.

I can understand they are in business to make a profit, but $350 below spot?... you've got to be kidding me.

[Pennysaved]

You should have asked if she had one for $1500 you could buy

[barrytrot]

Actually I would say THIS SHOP is not nearly as bad as most. I've not been to one lately but the "hotel buyers" I thought paid far under 80% of spot, something like 50% or so.

80% of spot, of course, is terrible in "normal world", but it sounds reasonable for a "store front" actually.

[hobo finds]

Should have had her call the boss back at his house and see how much better he could make the deal...

[tractorman]

Cute little 20-year old? I might have said something like, "I'll just put it back in the stack for now ... what are you doing for dinner?"

[Cu Penny Hoarder]

You should have asked if she had one for $1500 you could buy

Missed opportunity... damn it! I would've bought all he had for $1500 each!

[Cu Penny Hoarder]

Cute little 20-year old? I might have said something like, "I'll just put it back in the stack for now ... what are you doing for dinner?"

I can appreciate 20 year old girls, but I could never date someone that is 25 years younger than I am. Maybe when I go through my mid-life crisis, then I'll give it a shot.

[Corsair]

Cute little 20-year old? I might have said something like, "I'll just put it back in the stack for now ... what are you doing for dinner?"

I can appreciate 20 year old girls, but I could never date someone that is 25 years younger than I am. Maybe when I go through my mid-life crisis, then I'll give it a shot.

I'm more her type. Get her number for me?

[uthminsta]

I'm more her type. Get her number for me?

Sure... it's $1500.

[Delawhere Jack]

About 6 weeks ago I was in a coin shop that also buys gold. An........"undocumented immigrant" couple was selling some broken jewerly, a good-sized palm full, had to be an ounce at least. Guy at the counter offered $350, they took it. Even if there was a lot of 14 or 18 karat, that seemed awfully low.

I never knew that our neighbors from south of the border were in the tradition of wearing Claddagh necklaces....maybe it was a gift....or a self ascribed severance benefit.

[mflugher]

Jewelry scrap and Bullion coins are 2 different animals all together when it comes to the retailing.

Jewelry is sold for 8x melt value and bought back at 50-70% of melt.

Bullion coins are sold for ~$150 over spot (retail) $100/oz over spot (internet) and bought back at about $100 under usually.



I buy at the following rates in my shop on a pretty regular basis...

10k $20-27/dwt 53-72 % spot at $1800 gold
14k $26-$42/dwt 49.5-80% spot @ $1800 gold
90% silver $20xface MAX usually 15-17x
40% halves $4 -$5 each
generally I want to make at least $8/pennyweight assuming I sell at 90% of spot.

I paid $30 to a woman today for 14k and $36 for some 18k and she was amazed that I offered her so much, she had shopped 2 other stores and found prices closer to $15/10k and $21/14k.

Gold coins- won't touch em for more than $150/oz below spot... its too much cash on the table to make a profit and with gold moving $50 a day up and down I'm just not interested. Once I get a few buyers set up I'll be able to pay more for gold coins, but honestly $100-200 profit on an $1800 investment just isn't worth the opportunity cost of putting that cash on the table... Not to mention there are many counterfeit gold coins out there, some buyers want cdn, some want amer eagles some want krugerrands... Also the gold coins are mostly sold privately, or to goldline/other PM dealers by mail. IF anyone wants to be on a mailing list when I get gold coin oppurtunities let me know...

Keep in mind the retail shops to comply with the state law (in ohio) must:

1: keep extensive records of items sold (full description of each item) and names/address/photo id of person selling. for 3 years
2: all items must be held for not less than 5 business days before being sold/smelted.
3: If any stolen property comes into your store you can be asked to hold it for 30 days minimum. You may end up having to return the item to the original owner (without gettnig paid back what you paid the theif for their items) Trust me when you have to hold $4k worth of jewelry for a month plus its quite a hit on your bott line, this business requires quick turnover of goods.
4: the police can come in and search your inventory at any time without notice.
5: in an 8 hour working day we spend on average 1/2 a manhour on searching inventory for items reported as "stolen" usually the story is that it was stolen by their kid for drug money. Sorry if a resident of your household sells something in the house I don't really think its "stolen"


Some other expenses/risks of the retail gold buyer:

4: Fake Jewelry abounds... good GF, Good plated, etc. If the gold kiosk is hiring a min wage 20 yr old girl to run the shop by themselves, its a good likelyhood that there is at least a 2 - 5 % loss for bad purchases (and could be much worse if word on the street gets out that the girl at the mall is clueless). I have multiple gold chains which are marked 14k, italy which I bought and untold numbers which I have tested and rejected before purchase (1 a week minimum).

5: You can just take about 10% off spot for Smelting fees... I have 2 persons who I currently deal with on gold sales one pays tiered 97-99% based on volume I usually get in on the 98% tier, I have another contact who pays cash 90%, he gets you for rounding down on the karat percentages too... amazingly the 90% guy usually comes in within $500 of the 98% guy. He pays me for Dirt, gems and stones, etc, while the 98% guy manages to lose about 1/2 oz of material in "smelt losses" on every smelt run of about 15 oz

6: Rent in the mall AINT CHEAP, also electric, water, sewer, employees (even a shop open 60 hrs a week with 1 min wage employee at a time on staff is gonna pay about $700/week in payroll)


Buying GOld coins as a retail we buy gold is not a good idea for the business owner, its putting too many eggs in one basket. And since the owner can reliably get scrap jewelry which he can just mail to smelter @ 50% of spot, why would they pay you even 90% of spot for a gold coin? (which is approx what they would get from smelter for it)



Just some info, there is a lot more at work here than spot price of gold...

[theo]

Actually I would say THIS SHOP is not nearly as bad as most. I've not been to one lately but the "hotel buyers" I thought paid far under 80% of spot, something like 50% or so.

80% of spot, of course, is terrible in "normal world", but it sounds reasonable for a "store front" actually.

I agree. $1500 is a higher offer than I would have expected. It was likely an opening offer. She may have had the authority to go $100 to $200 higher.

[mflugher]

Actually I would say THIS SHOP is not nearly as bad as most. I've not been to one lately but the "hotel buyers" I thought paid far under 80% of spot, something like 50% or so.

80% of spot, of course, is terrible in "normal world", but it sounds reasonable for a "store front" actually.

I agree. $1500 is a higher offer than I would have expected. It was likely an opening offer. She may have had the authority to go $100 to $200 higher.

Call Goldline and ask them how much they will buy back their gold coins for (the ones they mail you) its about 80% of what you paid them for it. Esp if you get into semi numis and junk silver bags (more like 70%)

BTW if you fill in their info brochure request on their website or call them for an Information brochure they send you a $4.95 flat rate Priority mail envelope with a stamp. I didn't end up sending them back the order form since I didn't like the price, so I used the stamp eventually for something else, but the packet is pretty cool reading.

[mflugher]

About 6 weeks ago I was in a coin shop that also buys gold. An........"undocumented immigrant" couple was selling some broken jewerly, a good-sized palm full, had to be an ounce at least. Guy at the counter offered $350, they took it. Even if there was a lot of 14 or 18 karat, that seemed awfully low.

I never knew that our neighbors from south of the border were in the tradition of wearing Claddagh necklaces....maybe it was a gift....or a self ascribed severance benefit.

Most gold sold in US is 14k, here are some stats of gold percentages bought since I opened my shop.

10K 28.4%
14K 64.9%
18k 5.9% (includes dental)
24k 0.047%

Sterling silver 118% of total gold bought. IE I got 1.18 ozt of sterling per ozt of gold (couple sterling flatware sets and tea service have thrown this number off from where it was about a month ago)

Silver coins (junk silver) Did not keep a seperate column for that, Quick estimate says I bought about $1.17 face in silver coins per ozt of Kt gold I bought.

Silver rounds/bars Also did not keep a seperate column for that. but a quick mental tally says I bought about .74 ozt of .999 silver rounds/bars per ozt of scrap kt gold I bought.

22k was not tracked seperately and was included in 18k usually. However only 2 cust brought in 22k 1 brought in 2 bracelets, the other brought some gold dust/mininuggets she panned herself and they tested 22k probably less than 1 ozt total weight has come thru.




Re: Estimating how much gold in someone's hand

Its very hard to estimate how much gold there is by looking at it. Much gold jewelry is hollow, there may have been some plated and GF in there also which they picked out and didn't buy.



Some examples of Gold jewelry piles.
I took all the 10k and 14k on hand and split them into denser and less dense piles.
I took 2 pictures of each pile, one spread out and one clumped up "handfull" style.
The 21.7 chain looks minor even more so in person, while the 10.3 of 10k has a good chance of being called the largest pile by eye. def 2nd largest from the looks of it. values of each pile at 100% spot below.

All this has been bought by my shop in the last 2 days, its all i have on hand to play with ATM, rest is offsite for security reasons... its all fresh real gold from the streets in the exact situation mentioned above





Pile 1 10.3 dwt 10k =$386.25 < 2nd largest looking pile > many items
Pile 2 21.7 dwt 14k =$1139.25 <4th largest looking pile> 1 necklace
Pile 3 13.9 dwt 14k =$729.75 <medium looking pile> 1 herring bone necklace
Pile 4 17.9 dwt 14k =$939.75 <largest looking pile> 1 lots of items
Pile 5 11.5 dwt 14k =$603.75 <smallest looking pile> 1 bracelet

all values assume 100% payout with 0 melt loss, in actuallity I will probably get 90-94% of this amount after refining costs, and melt losses.


Hope this helps you all with your gold estimating


btw everything there is for sale @ melt + insured shipping if anyone wants it, $250 minimum order @ this price.

[Dumpster Diver]

mflugher- this is some great intel! Thanks for the posts.

[mflugher]

Np I seriously hope it helps someone

[cesariojpn]

6: Rent in the mall AINT CHEAP, also electric, water, sewer, employees (even a shop open 60 hrs a week with 1 min wage employee at a time on staff is gonna pay about $700/week in payroll)

General speaking, a Kiosk is the "cheapest" storefront in a mall, and the lowest tier of importance in a mall's hierarchy.

Anchor Store > Chain Store > Banks > Clothing Store > Resturaunts > Food Court > "Specialty" Shops > Beauty Salons > Kiosk

[mflugher]

true, but a kiosk @ my relatively minor mall costs $1400/month plus 10% of gross sales, that was priced in 2002 I believe. Malls are run by the mob, they aren't cheap... Not sure how they would charge you gross sales on a gold buying operation. But while it is a relative value compared to say Sears or the gaps rent, its still not cheap by a longshot. A kiosk gets you about 8x8 of floor space so the price I got was $262.5/sf/yr plus 10% of gross revenues.

Unfortunately I can't remember if the 10% was before or after reducing by Cost of goods sold, but either way its pretty draconian.

SInce the sticker shock of that I never thought about renting mall space again.

My storefront is 2 blocks from Mall entrance and costs me $7.50/sqft/Year, to put in perspective space in the strip mall opposite 1 of the 5 entrances to the mall is $36/sf/yr Priced 2006. Space in the strip mall which is located off the driveway into wal mart locally was rent @ $54/sf/yr in 2010.

[silverflake]

I went to one of those 1 day only hotel gold and silver buyers about 3 years ago. I had a bunch of Maria Teresa Thalers (they have about 0.75oz silver each). Anyhow, the spot price of silver put their value at about $400 dollars for the lot. I had it in my head that I would accept 30% below spot (I needed some cash). So I thought i will take no less than $280. They offered $156. There was some silence, a cricket chirped. I reached over, swept up my coins and thanked them for their time. I wasn't quite that desperate. Be careful my friends.

[mflugher]

I tried a hotel buy once, Was paying about 60% it was in july last year.

we bought a total of $9k ish, 6k of which came from one lady (thank God for her).

we invested $2k in advertisng and $250 in room/other expenses.

We barely covered our costs. as a 50% partner I think I lost about $175 or so on that venture. relatively cheap lesson learned, you can't pay 60% with all the advert expense on a 2 day event. Advertising works better with a solid location. At least for me.

Had I paid 35% instead of 60% I'd probably have netted $2k for each myself and my partner, however I have morals and won't advertise highest price paid if I don't at least think I'm in the competition for it. Only one guy in town pays more than me and thats only about 50% of the time so I figure we are tied and my conscience is clear.

BTW you thought the silver offer was a ripoff bring in a High quality antique clock/furniture, maybe a Hummel, they will offer you about 15% of what they will sell it for. Of course you can't melt down a Hummel.

[Cu Penny Hoarder]

Excellent and very useful information mflugher. Thanks!

Jewelry scrap and Bullion coins are 2 different animals all together when it comes to the retailing.

Jewelry is sold for 8x melt value and bought back at 50-70% of melt.

Bullion coins are sold for ~$150 over spot (retail) $100/oz over spot (internet) and bought back at about $100 under usually.



I buy at the following rates in my shop on a pretty regular basis...

10k 41.6% $20-27/dwt 53-72 % spot at $1800 gold
14k $26-$42/dwt 49.5-80% spot @ $1800 gold
90% silver $20xface MAX usually 15-17x
40% halves $4 -$5 each
generally I want to make at least $8/pennyweight assuming I sell at 90% of spot.

I paid $30 to a woman today for 14k and $36 for some 18k and she was amazed that I offered her so much, she had shopped 2 other stores and found prices closer to $15/10k and $21/14k.

Gold coins- won't touch em for more than $150/oz below spot... its too much cash on the table to make a profit and with gold moving $50 a day up and down I'm just not interested. Once I get a few buyers set up I'll be able to pay more for gold coins, but honestly $100-200 profit on an $1800 investment just isn't worth the opportunity cost of putting that cash on the table... Not to mention there are many counterfeit gold coins out there, some buyers want cdn, some want amer eagles some want krugerrands... Also the gold coins are mostly sold privately, or to goldline/other PM dealers by mail. IF anyone wants to be on a mailing list when I get gold coin oppurtunities let me know...

Keep in mind the retail shops to comply with the state law (in ohio) must:

1: keep extensive records of items sold (full description of each item) and names/address/photo id of person selling. for 3 years
2: all items must be held for not less than 5 business days before being sold/smelted.
3: If any stolen property comes into your store you can be asked to hold it for 30 days minimum. You may end up having to return the item to the original owner (without gettnig paid back what you paid the theif for their items) Trust me when you have to hold $4k worth of jewelry for a month plus its quite a hit on your bott line, this business requires quick turnover of goods.
4: the police can come in and search your inventory at any time without notice.
5: in an 8 hour working day we spend on average 1/2 a manhour on searching inventory for items reported as "stolen" usually the story is that it was stolen by their kid for drug money. Sorry if a resident of your household sells something in the house I don't really think its "stolen"


Some other expenses/risks of the retail gold buyer:

4: Fake Jewelry abounds... good GF, Good plated, etc. If the gold kiosk is hiring a min wage 20 yr old girl to run the shop by themselves, its a good likelyhood that there is at least a 2 - 5 % loss for bad purchases (and could be much worse if word on the street gets out that the girl at the mall is clueless). I have multiple gold chains which are marked 14k, italy which I bought and untold numbers which I have tested and rejected before purchase (1 a week minimum).

5: You can just take about 10% off spot for Smelting fees... I have 2 persons who I currently deal with on gold sales one pays tiered 97-99% based on volume I usually get in on the 98% tier, I have another contact who pays cash 90%, he gets you for rounding down on the karat percentages too... amazingly the 90% guy usually comes in within $500 of the 98% guy. He pays me for Dirt, gems and stones, etc, while the 98% guy manages to lose about 1/2 oz of material in "smelt losses" on every smelt run of about 15 oz

6: Rent in the mall AINT CHEAP, also electric, water, sewer, employees (even a shop open 60 hrs a week with 1 min wage employee at a time on staff is gonna pay about $700/week in payroll)


Buying GOld coins as a retail we buy gold is not a good idea for the business owner, its putting too many eggs in one basket. And since the owner can reliably get scrap jewelry which he can just mail to smelter @ 50% of spot, why would they pay you even 90% of spot for a gold coin? (which is approx what they would get from smelter for it)



Just some info, there is a lot more at work here than spot price of gold...

[Rodebaugh]

Anyone looking to have their favorite time piece turned into a bar of slag.....I've got the gear to melt that Hummel

[mflugher]

Anyone looking to have their favorite time piece turned into a bar of slag.....I've got the gear to melt that Hummel

Now laughing at imaginary images of my poor little porcelin and Mahogany clock melting like a Salvador Dalí painting and then bursting into flames in your smelter...

BTW apparently you need to search more quarters... you are 100% you lucky bastard. In fact I'll be happy to bankroll u @ 4x face all day

[schockergd]

20% or so below spot?

Do you think that most companies for-profit have a 20% margin on goods? Heck no , 100% , 200% , 300% or so. If you're upset about 20% or so ,go try a jewelers, they would have offered you 50% of spot.

Mfluger - What do you think about Ohio precious metal dealer laws? We've had a few dealers shut down in my town for not being licensed. I get worried once in a while even though I only buy coins (no scrap).

[Market Harmony]

Why should anything other than a 22 pound bar of pure gold from a LME-approved refinery be purchased at anything close to spot gold?

You have to define "spot gold"

It's just like copper... the spot price is for a HUGE quantity, undelivered

There is a lot of work and risk that has to be taken in order to achieve the volumes which would justify higher prices.