Bullion Direct Having supply problems

Discussion in 'General Precious Metals Discussion' started by Clawhammer, Jul 4, 2015.

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  1. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    Clawhammer, Jul 4, 2015
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  2. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    [​IMG]
     
    SpacePete, Jul 4, 2015
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  3. Miloman

    Miloman Active Member Silver Stacker

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    Yes bullion direct suspended operation, big deal.

    We have been hearing about how the fiat system is going to crash for decades.

    Chris Duane is pumping people full of fear then immediately after advertising his round with a moron actor yelling "just do it", what buy his product? It's a big advert and he's a salesmans. I do like his rounds and like silver but c'mon haven't we heard enough from these pumpers?
     
    Miloman, Jul 4, 2015
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  4. goldpelican

    goldpelican Administrator Staff Member

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    Well given that many dealers in the US seem to have changed to a business model where they're selling silver at just a few cents an ounce over cost in desperate efforts to keep volume up, it's not surprising to see dealers starting to run into difficulties.

    It's not a supply issue, it's an industry issue with too many players, a shrinking market and race to the bottom tactics of trying to keep making sales "at any cost".

    At some point a bunch of customers are going to get caught out and be left high and dry.

    Everyone I speak to in the industry in the US has said their volumes are waaaaay down on years past. Smaller dealers who can't survive on the incredibly slim margins generated by reduced sales in this competitive environment are going to hit the wall.
     
    goldpelican, Jul 4, 2015
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  5. Miloman

    Miloman Active Member Silver Stacker

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    Yeah, that doesn't surprise me at all. We have seen dealers blow up in the past burning lots of people. That model is just insane but low premium silver is the way to go for customers if you get it.

    I think many stackers are now sitting on the sidelines, some are now just waiting to get even and sell out higher prices. True believers will keep accumulating, counting ounces.
     
    Miloman, Jul 4, 2015
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  6. SilverDJ

    SilverDJ Well-Known Member

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    So when do you we get these cut-throat razer thin margin deals here in Oz?
    Common as mud in the US it seems, but shipping from the US makes it cheaper to buy here at much higher margins.
     
    SilverDJ, Jul 4, 2015
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  7. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

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    Contact Bigs
     
    Aurora et luna, Jul 4, 2015
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  8. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    Is it getting volume up to access the more wholesale areas of the market? Like access to first tier US mint wholesalers who won't deal with you unless you have the volume? Or just that they are competing with each other?
     
    phrenzy, Jul 4, 2015
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  9. deck-star

    deck-star New Member

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    Bigs' prices are the best but his shop appears to be shut for the moment.
     
    deck-star, Jul 4, 2015
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  10. goldpelican

    goldpelican Administrator Staff Member

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    Appears to be competition, and struggling to survive in a retail market of declining volumes. Ask yourself why else would CNT bother to enter the eBay game in the last few months.

    CNT are "the" big boy on the block in the US bullion scene - when they have to quit the wholesale only model and start chasing some retail sales, you've got to wonder how tough it is on the smaller end of the scale. Other traditional wholesalers look to be doing the same. Regular small to midsize retail focused dealers in the US that can only differentiate themselves by price from the other OPM/ASE/SML sellers out there are struggling. Now think of the additional impact from having your own wholesale suppliers enter into retail competition with you.

    I reckon without a significant turnaround in the PMs market volume wise, whether accompanied by a massive spike or decline in spot prices, we're going to see some American dealers fold big time, and buyers are going to get burnt.

    Zero margin sales help no-one.
     
    goldpelican, Jul 4, 2015
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  11. miniroo

    miniroo Well-Known Member Silver Stacker

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    Must be one of the most difficult retail businesses to operate.

    Once wholesalers roll with retail they can easily take advantage by limiting supply to competitors and undercutting.
    They can manipulate the availability of product to inflate the prices and all kinds of things.
    But in the end it's those guys that can ruin the whole industry and they will go too.

    So basically it could be the beginning of SHTF for bullion dealers.
    What happens in global SHTF? Don't the one's most prepared survive and prosper?

    So how does a prepared bullion dealer prosper when all is collapsing around them?
    I'm sure long term bullion dealers have seen these sorts of times and i'm sure they know exactly what they need to do to take advantage, for a select few, this is what they wait for.

    My guess is it'll be those that have always run a tight ship and never got too big for their own boots.
    I think there will be a moment in time when selling bullion won't be the game, buying it all back might be.
     
    miniroo, Jul 4, 2015
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  12. goldpelican

    goldpelican Administrator Staff Member

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    Extended periods of buyback are already a trend - some weeks you buy back more than you sell. Managing that is secret sauce.

    It's a surreal business where stepping out for lunch at the wrong time can turn a profitable day into a loss because the chart blipped the wrong way.
     
    goldpelican, Jul 4, 2015
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  13. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    "We lose on every sale, but we'll make it up on volume!" :p
     
    Clawhammer, Jul 4, 2015
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  14. bron suchecki

    bron suchecki Active Member Silver Stacker

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    I read an article interviewing a US coin dealer about the 70s/80s and he said that when the priced peaked dealers were buying back at around 30% discount to spot because of the volume of people selling meant that it was taking months to get metal melted and refined as refiners were maxed out, the whole supply chain (in reverse) was backed up.

    Lesson I think is you don't want to be on the wrong side of that - better to sell early than try and time the peak and find you're getting a falling spot plus large discount.
     
    bron suchecki, Jul 5, 2015
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  15. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    Supply problems? What happens to dealers when there is no metal to sell ? sorry of course that will never happen. There are tons of supply with every mine production down and mining companies closing. When demand picks up everywhere as it is in Europe, supply will vanish like a drop of water in a vacuum. What will bullion dealers and mints do then ?
     
    Ronnie 666, Jul 5, 2015
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  16. Stoic Phoenix

    Stoic Phoenix Well-Known Member Silver Stacker

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    Put WTB threads on this forum? :D
     
    Stoic Phoenix, Jul 5, 2015
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  17. monopolize

    monopolize Well-Known Member Silver Stacker

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    Wonder if that was referring to sterling silver though. If it's .999 fine silver there wouldn't be a need to refine before reselling, and won't be stuck with possible price movements months down the track.
     
    monopolize, Jul 5, 2015
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  18. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    How many people outside the SS group own 925 silver ??? In the 1970's I knew quite a few people who owned silver tea sets and cutlery. Today ? silver is plated to most people. I would be interested in some of the SS dealers comments here but there is very little 925 silver in the general community.
     
    Ronnie 666, Jul 5, 2015
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  19. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    Oz I am sure most of that silver is from people who have just lost parents and are clearing out their parents homes. Estate sales have some silver. I know that most people under 30 have never bought or owned a silver item.
     
    Ronnie 666, Jul 5, 2015
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  20. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    But they'll pay a 3000% mark-up for a Pandora bracelet nick-nack.
     
    Clawhammer, Jul 5, 2015
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