The difference between buy price and sell price. (NZ)

Discussion in 'Silver Coins' started by Glenis, Jan 2, 2019.

  1. Glenis

    Glenis Member

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    I had a chat with MyGold in NZ.

    Spot price as per their website is $23.48 oz today.

    To buy a monster box of Silver Maples today $14,334 ($28.66 each) - to sell a box of Silver Maples today $11,226 ($22.45 each)
    To buy a monster box of Silver Eagles today $14,956 ($29.91 each) - to sell a box of Silver Eagles today $11,226 ($22.45 each)
    They buy back under spot, there is no buy back difference between Maples and Eagles. On Maples, that's about 22% loss and 25% on Eagles which is pretty significant! Assuming the make a profit on the sale as well, that just seems like extortion.

    Any tips for a better return than $22.45?

    **Edited to correct % of loss.
     
    Last edited: Jan 3, 2019
  2. SlyGuy

    SlyGuy Active Member

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    This has been discussed to death, and not everyone agrees (namely the numismatic collectors). However, I will tell you this:

    Buyback price offered will always be spot or a bit below. It all reverts to spot price. That goes for philharmonics, maples, eagles, Perth stuff, etc etc. Year doesn't matter, and country doesn't matter. Don't accept less than spot on govt bullion unless it is in very bad shape or you are in a real hurry to sell. You can typically sell govt bullion for spot quickly and easily if you sell it to other ppl yourself or find the right shop or dealer.

    This is precisely why numismatic and collectible stuff with high premiums is silly in my opinion... a big waste of money as well as time. Sure, you might be able to search around and find the right buyers, but it is typically much work to sell small quantity. If you enjoy that work, then by all means... but don't expect to get rich doing it (unless you are the shop that buys the "numismatic" coins new from the mint @below spot). Could you hit a winner and buy a set that goes up in value? Sure. Is it likely? Much more likely to lose you the premium... and maybe silver spot price also. For every old set that has gone up, you will find many many many many that sell for roughly spot.

    Generic silver stuff is a different story. That will typically get you spot minus roughly 5% or so... perhaps spot in a really good market. Brand name or art on the silver rounds or bars doesn't really matter (again, unless you want to search long and hard for a buyer who will pay for that particular stamp on a bar or cool looking demon on a silver round).

    The difference between bullion and generic is liquidity as well as price. A coin shop or dealer will probably take more of the local country bullion... and may not want to buy foreign bullion or generic rounds at all. Keep that in mind when you are buying. To me, liquidity is worth something.

    Prices you decide to pay are based on what you can find available to you.
    Don't be in a hurry. Remember that you lose nothing by not buying. Make offers and if they're declined, you still have cash in your hand.
    I would just tell you to never buy on credit (beyond stupid, but many ppl do it), get as close to spot as you can, and be patient.
    Like any investment, PMetals are largely about emotional control. It is very good that you looked into selling process a bit before doing significant buying... go ahead and sell some once in awhile so you continue to learn; many people step in a huge hole by diving head first into stacking, overpaying on premiums, and not doing that sell price research early... they foolishly just believe the sticker prices they see when buying are what they'll sell their coins for. GL
     
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  3. Ian Gillman

    Ian Gillman Active Member

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    I will buy some coins for a slight premium (nothing too high) if I like the look of the coin or just for some variety in the collection. When the time comes to sell I do not want to have just one or two types of coin. Having said that, the majority of my coins will be Maples, ASE's and Libertads just due to my location in North America. I plan to use the coins to establish trust with a dealer and then slowly introduce rounds and bars into the sales I make. I have the mantra "it all goes for spot in the end" which helps me determine if I want to pay the price for something or not.
     
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  4. Glenis

    Glenis Member

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    Opps, I appreciate the response, thank you. Every business needs to make a profit, I was just surprised at how much it was. Posting was a knee-jerk reaction. Buying 1kg bars is cheaper so we lose less when selling but apart from selling back to the dealer I'm not sure how successful selling F2F or on our NZ auction site, Trademe, would be.

    It's a large sum of money (for us) to be investing/spending so I'm not rushing, ticking all the boxes first. Silver is speculating so being as educated as possible seems smart.

    I might have to adopt that too. Ohmm it all goes for spot in the end, Ohmm it all goes for spot in the end ....
     
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  5. SlyGuy

    SlyGuy Active Member

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    Their best volume is on govt bullion, but margin is slim. Their best margins are on "collector" stuff that is perceived rare, but that sells low volume. Their best cash cows overall are things that are both high volume and high premiums... usually the current mint sets like Queen Beast, America the Beautiful, Lunars, etc etc.

    Good read here with view (and bias) from both sides : https://www.silverstackers.com/forums/index.php?threads/kooks-are-now-24-50.90260/page-3
     
  6. SlyGuy

    SlyGuy Active Member

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    Yes, he summed it up as well and more succinctly than I did. My stack strategy is also 75% or more maples and eagles, being in USA... a few libertads, but they are generally not worth high premiums. If I lived in Aus, I would probably stack 80-90% kanga and then any other govt bullion I could find nearest to spot.

    It is fine to buy stuff you like for over spot... but be pleasantly surprised if you get more than spot for it when you go to sell it.
    The key is having realistic expectations. Expect anything you own to sell at spot for govt bullion, a bit less for generic.
    As a side benefit, this mindset will help you get many deals near spot on nice sets from years past which people paid gross premiums back at original release. GL
     
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  7. alor

    alor Well-Known Member Silver Stacker

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  8. alor

    alor Well-Known Member Silver Stacker

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    agree with the spot or spot + thing

    the logical way is to get the lower spread, when buy back price is the same...then just need to consider the cheaper one
    there is an intention to sell them back

    this simple rule must be applied for bullion across; Gold, Silver, Platinum and Palladium as well

    the spread for gold is the lowest, then Silver then Platinum then Palladium

    another point to keep in mind, what are the people somewhere else pay for the same products
    PM are very liquid, they get transfer around the globe
     
  9. SilverDJ

    SilverDJ Well-Known Member

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    Buy pool/unallocated or allocated silver perhaps?

    Current Buy/Sell spreads at Perth Mint:
    At these rates I can practically day trade metals and make money if the swings are big enough.
    And there are cheaper places than the Perth Mint.
    You'll always pay a big premium at dealers for physical metals, especially lower value coins.
    If you are complaining about the buy/sell spreads on coins then maybe you shouldn't be trading coins!

    upload_2019-1-3_14-27-22.png

    Goldstackers: $13,111 buy, $10,600 sell
    I doubt any dealer is going to be much better?

    upload_2019-1-3_14-33-15.png
     
    Last edited: Jan 3, 2019
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  10. malachii

    malachii Well-Known Member

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    Hi Glenis,

    If you want to freight it to Melbourne (quote on NZ Post including $10000 insurance is under $300nzd) we'll pay you spot so after expenses you'd be about 50 cents under spot per oz.

    malachii
    (Little Coin Shop).
     
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  11. Glenis

    Glenis Member

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    Thanks for the offer but I'd rather keep everything in NZ, just seems easier.
     
  12. alor

    alor Well-Known Member Silver Stacker

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    its just like getting out of the system tax, there is a price to everything
    there is no point to pay for gst, if you can avoid it, but when going back to the system, the agent will discount your gst, unless you continue to hold
    so there is no point to get double punished by it, gst on the way out and gst on the way back into the system
     
  13. Glenis

    Glenis Member

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    There is no GST on 'fine metals'.
    "The GST treatment of gold, silver and platinum depends on their purity. Gold, silver and platinum[5] are a “fine metal”, when they are in any form having a fineness of not less than a certain specified percentage (99.5%, 99.9% and 99.0% respectively)."
     
  14. alor

    alor Well-Known Member Silver Stacker

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  15. slide95

    slide95 New Member

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    If you ask a dealer for the price of a share he will not know if you are buying or selling. So he gives you the price that he will pay if you are selling and the cost if you are buying.

    The difference is what he has to live on.
     
  16. Jim4silver

    Jim4silver Well-Known Member

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    That's a pretty big spread between buy and sell. Here there is about a $2.00-$2.50 or so buy/sell spread for ASEs. You could try to sell them to a collector and give them a price cheaper than your coin store sells them for. That way you can make more and the buyer gets a better deal as well.
     
  17. slide95

    slide95 New Member

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    So he gives you the price that he will pay if you are selling and the cost if you are buying.

    The difference is what he has to live on.


    Lucky Patcher 9Apps VidMate
     
  18. IndoHound

    IndoHound New Member

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    I just made a submission to this website detailing my experiences today - August 5th 2019 - trying to sell just under 30 ounces ASW to different dealers in Sydney, Australia region found when searching "Selling Australian Silver" on Google. The best offer stated on the phone was 15-20% under spot. The worst was almost 54% (!) under spot.

    When seeing what companies in the US are offering plus the clarity on many US websites on bid and ask prices for all manner of Gold & Silver bullion, bars etc. I am overcome with envy. The spread on buy/sell is rarely above 15% and then only for small quantities. Over here in the 'Lucky Country' it can easily range from 50% to 200% or more.
     
  19. SilverDJ

    SilverDJ Well-Known Member

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    I don't know why people bother with physical possession and third party resell when the ratio is so terrible.
    You can keep physical in places like the Perth Mint or other dealers that have integrated vault solutions, and then sell back at any time for tight margins.

    Gold Stackers for example is only 5%
    upload_2019-8-5_16-57-58.png

    Perth Mint is 0.6%, but that doesn't include the 1% buy and sell fee + barring fee. But still well under 5%
    upload_2019-8-5_17-0-26.png
     

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