"I can't sell silver when the market is closed."

[newton7]

Ok, I am going to need help with this one.

Saturday I got a call from a friend from work who is interested in getting into precious metals. We talked about it several times at work and now he’s ready to pull the trigger. I said I would help and took him to a couple of stores in town and let him pick something out. He already has an eye for 10 oz and 1 oz bars to. First two stores were closed for the four day weekend so we traveled to our last store to see what was available.

The dealer had a very good selection of stuff minus the 10 oz bars. So we started asking about other items. When I got to 90% I ask how much was 90 going for? He stated how much do you want? I paused and was thinking of an amount when he hit me with the next line. "i can't sell silver when the market is closed." He quickly followed that with, " I don't know if the market is going to go up or down and my margins are just to close." This kind of confused us and I said, "OK" and we left.

We had plenty of money to buy stuff but his statements kind of threw us off and he gave me the impression that he did not want really make a sell. Clearly there was stuff in the case to sell but what I think he was saying was. "I can't give you a better break on my stuff because I do not have any flexibility in my pricing with the market being closed." And that would of been fine if the stuff in the case had a price on it but nothing was priced so every time something caught my friends eye we would have to ask, "How much?"

Regardless he lost a sale that day and after giving it much thought I do not know if I will bother to go back to his store again. The other item that threw me was what they were calling spot was 20 cents higher than what Kitco or Ampex has listed on their site with the market being closed. Could they be padding the numbers to add a margin? They claimed they sold 90 at spot but why is that spot higher than any of the sites that are commonly used.

Any and all info would be great on this.

I think the guy means well but his communication confused me a little and really confused my newbie who just decided to takes his FRNs some place else.

newton7

[neilgin1]

Newton, a lot of the other guys here could give you a better nuts and bolts answer than me, but i can tell you what you're experience tells me; seeing as this dealer is so afraid to even make an offer, what this says to me, this guy is thinking that times are so weird, he doesnt know if the market is going to be bid $2 higher in the next 12 hours, which just confirms to me, we are in the mother of all bull markets.
think about it, when you got sellers AFRAID to sell?....sweet jumping Jehosaphat!.....we're going to $130 the ounce, i dont care what anybody sez.

[Beau]

.
the only dealer in this town is that way, he will only sell if you buy $1,000 at a time before lunch time.
I have been in his shop 20 to 30 times and only bought 2 times.
he has another dealer that he has to call to get a price from, the other dealer is 50 miles away.
when the dealer 50 miles away tells him what he is selling for he will give you a price then.

I think the deales 50 miles away is the owner of both shops. the thing I don`t know is why he will only sell before lunch time.
then he is 3 to 4 dollars per coin over where the price should be.
the other thing is why $1,000 or no deal?


.

[barrytrot]

Newton, a lot of the other guys here could give you a better nuts and bolts answer than me, but i can tell you what you're experience tells me; seeing as this dealer is so afraid to even make an offer, what this says to me, this guy is thinking that times are so weird, he doesnt know if the market is going to be bid $2 higher in the next 12 hours, which just confirms to me, we are in the mother of all bull markets.
think about it, when you got sellers AFRAID to sell?....sweet jumping Jehosaphat!.....we're going to $130 the ounce, i dont care what anybody sez.

Were this dealer *SMART* I would believe this interpretation of his behavior.

However, he is clearly not *SMART* as cowardice is not a trait of *SMART*.

I guarantee you that if you called Market Harmony, Portland Mint, or any of the other pros on this board they would do several things differently than this "dealer":

1. They would be courteous and lay out their particular method of doing business.
2. They wouldn't give you some sort of ridiculous line like, "because I can't tell the future I can do nothing."
3. They would have engendered trust in themselves, which is the #1 factor in staying in business long term.


Please neilgin1 don't use solo bone-heads as "market indicators" Your predictions are "dart board like" already, and we don't need more chaos in them

[Rodebaugh]

Brother.....good move on the walk. Keep your eyes peeled here for some at, just above, and below spot deals. To hell with a dealer that is afraid to move coin in a closed market. If I got it......it's for sale.

[barrytrot]

Brother.....good move on the walk. Keep your eyes peeled here for some at, just above, and below spot deals. To hell with a dealer that is afraid to move coin in a closed market. If I got it......it's for sale.

Exactly. I could have easily listed "West Virginia Coin" in the "pros" list and knew he would be appalled at this poor-operating dealer's behavior.

[newton7]

I think I understand how the guy is running his business so he can keep tabs on everything but most stores will have 3.50 plus spot or spot plus x amount on the items. Which if your planning on maximizing your purchase to save money on taxes would be just fine. But as a consumer I can not plan on how to spend my FRNs if nothing in case has a price. Call me a control freak but I want to know where every penny is going and I do not like surprises at the end of a purchase or after I have committed to buy something.

[cesariojpn]

A car guy once told me: If it's not right, just walk away.

[68Camaro]

I'm not defending the guy, but as I understand it there are several ways to operate a PM business, and one - which I believe is common - is to operate off the futures market, and those businesses typically offset immediate sales with a futures transaction to ensure that they make a profit no matter what the market does while they replenish their supply. This allows them to profit in a down market as well as an up market, as well as to ensure that they always have product at a sellable price.

[barrytrot]

I'm not defending the guy, but as I understand it there are several ways to operate a PM business, and one - which I believe is common - is to operate off the futures market, and those businesses typically offset immediate sales with a futures transaction to ensure that they make a profit no matter what the market does while they replenish their supply. This allows them to profit in a down market as well as an up market, as well as to ensure that they always have product at a sellable price.

Yes, that's true, even those that don't operate that way probably dabble somewhat as it is a pretty smooth method of removing or at least mitigating risk.

However, If you are going purely with that style then don't open your doors when you can't sell

Opening his doors and then refusing to sell means he's paying for electricity and such and also creating disgruntled potential customers!

[OneBiteAtATime]

Or at the very least, don't display what you are unwilling to sell. Lock it in a safe and pull it back out when the markets re-open.

[newton7]

I dont think he was not willing to sell. I think what he was saying is, "I cant give you a break on the price." He asked how much I wanted first and then made the statement. I think he is saying I want to sell but can not give you a price break due to my margins are so close. Maybe he wants to always give price breaks depending on amount but he can not do that right now with the market closed.

But with that said, the way he came across to my newbie was enough to scare that $1000 to someone else.

In my mind if he would just have labels in the case that say, 2dollars plus spot, 350plus spot, spot plus 25. It would all make more since for my newbie and he could gauge how much he wants to drop on silver.

Thanks for all the info.
I would love to hear more of your thoughts.
newton7

[Know Common Cents]

My response would've been, "Well, I can't buy your silver when you're a GOOF!"

Either you're in business or not. He's clearly not. I'd have waved goodbye with one finger (maybe more if I felt sorry for the hapless clod) and logged on to APMEX. Great selection and usually prices to match.

[Thogey]

I don't see what his logic is. The period of time when the markets are closed as just another data point.

Maybe he meant 'I can't sell silver during a closed market...when I don't like the price'. You should have asked if he can buy while the market is closed.

I would have said "Dude, you are the market!"