Why do coins cost so much to manufacture?

G

gimpy

New Member
Look at a 10-20c coin... Metals + manufacturing come in at under 10-20 cents, or else they would be phased out (like 1's and 2's, and soon 5's).

So why the heck does a 1/2oz silver coin, which is about the same size have such a huge premium?

Just curious as to why more mints don't spring up? Lets say you wanted to create a coin with bust of von mises (or keynes for gold for a lol) or something on it. Thats it. Nothing special, just the world silver and the weight. Then, that's all you made and never changed the die. The per unit costs would be trivial right? If we asked China to make us some steel coins, they would crank them out at a few c each tops... So, whats with all this premium?
 
I suppose if they made 70 million of them they could get the manufacturing cost per coin down to a few cents

fixed costs vs variable costs and all that stuff
 
Silver rounds and bars already have a low mark up. As said above the people minting the coins need to make profit. Interesting enough what you mentioned does exist I have abut 10 generic rounds dated 1974 I believe they just say Canadian Silver Corp or something like that and .999 silver on them so they've been doing it for a while now.
 
gimpy said:
Look at a 10-20c coin... Metals + manufacturing come in at under 10-20 cents, or else they would be phased out (like 1's and 2's, and soon 5's).

So why the heck does a 1/2oz silver coin, which is about the same size have such a huge premium?

Just curious as to why more mints don't spring up? Lets say you wanted to create a coin with bust of von mises (or keynes for gold for a lol) or something on it. Thats it. Nothing special, just the world silver and the weight. Then, that's all you made and never changed the die. The per unit costs would be trivial right? If we asked China to make us some steel coins, they would crank them out at a few c each tops... So, whats with all this premium?
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Lil something called demand based premiums. It's why I can buy a plain bullion round with a design that's just as intricate as a lunar or panda for less than $2 over spot
 
940palmtx said:
gimpy said:
Look at a 10-20c coin... Metals + manufacturing come in at under 10-20 cents, or else they would be phased out (like 1's and 2's, and soon 5's).

So why the heck does a 1/2oz silver coin, which is about the same size have such a huge premium?

Just curious as to why more mints don't spring up? Lets say you wanted to create a coin with bust of von mises (or keynes for gold for a lol) or something on it. Thats it. Nothing special, just the world silver and the weight. Then, that's all you made and never changed the die. The per unit costs would be trivial right? If we asked China to make us some steel coins, they would crank them out at a few c each tops... So, whats with all this premium?
Click to expand...
Lil something called demand based premiums. It's why I can buy a plain bullion round with a design that's just as intricate as a lunar or panda for less than $2 over spot
Click to expand...
Yep .The only real cost is the artwork & making the die then a machine spits them out
 
Ag-ness said:
Dies don't last forever, either. They wear out eventually and have to be replaced.
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From what i know they last around 300-500K coins more than enough to make the costs negligable
 
An explanation might be that the machine needs the same time to produce a 1/2 ouncer as a 1 ouncer and since alot stuff has a price based on the element time (like labor, machine hiring/debt payments, electricity, etc) this can explain a quite higher cost. Imagine that you fill a wheelbarrow only halve everytime, on the end of the day you did just halve the work because the wheelbarrow wasn't optimally used.
 
I bet a 5cent piece costs more than 5 cents to maufacture but the price of the metals it is made out of aren't supposed to exceed the face value of the coin so there is no point in owning it for its matal vlaue.

the silver coins we are talking about only have $1 face value but metal prices put them at $30 they are dsigned as an investment.

I'm lazy and can't be bothered extrapolating this but basically the benefit to the community of having a 5cent piece that can be easily traded at a known value is more than the manufacturing cost wven if producing the coin costs more than its face value.
 
2ds said:
I bet a 5cent piece costs more than 5 cents to maufacture but the price of the metals it is made out of aren't supposed to exceed the face value of the coin so there is no point in owning it for its matal vlaue.

the silver coins we are talking about only have $1 face value but metal prices put them at $30 they are dsigned as an investment.

I'm lazy and can't be bothered extrapolating this but basically the benefit to the community of having a 5cent piece that can be easily traded at a known value is more than the manufacturing cost wven if producing the coin costs more than its face value.
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The first couple of years 1oz Kook's had a face value of $5. Then the price of silver fell and there was a problem - :lol:
 
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