I've gotten a number of private emails asking me how to go about selling your broken or otherwise unwanted gold jewelry. People don't understand the process, and they've heard there are a LOT of rip-offs out there.
I figure that very few of the readers of this blog live close enough to our store, so I'm not pandering to you folks! As they say, "By popular demand" I'm going to re-publish the first newsletter from the precious metals business.
It's a little bit more "sales-y" than I like, but the information is good. If you're interested in signing up for that newsletter, I've provided this link. These newsletters will be coming out about every two weeks, with the next issue coming out on Thursday.
As with all of the businesses with which I'm associated, we do not sell, rent, barter or otherwise reveal any of the email addresses we receive.
Accept The ChallengeWelcome to the Solano Coin, Gold and Silver Precious Metals Newsletter. We will be providing you with regular, up-to-date information on what you should consider before you buy or sell any form of precious metals - be it coins, jewelry or ingots.
Selling Unwanted Gold Jewelry
We've all seen the ads on TV - sell your unwanted gold jewelry and get quick, easy cash. It sounds great. You call an 800 number, drop your jewelry in the mail, and you get a check.
The problem is, this process has a lot of "issues" with it. Here are the things you need to be concerned with when selling your gold jewelry:
1. The Price paid per gram2. The Trustworthiness of the gold test - valuation and "lost-in-the-mail jewelry"3. The Timeliness of the payment4. The Privacy of the transaction
We'll cover each of these items in each of our next 4 issues. First up -
Price Paid Per Gram
It is fairly easy math to figure out the price per gram of gold. Go to a site such as www.Kitco.com and get the current market price of gold. For this example, let's say the price is $1,370 per ounce. With precious metals, a troy ounce has a little over 31 grams per ounce. That means the price for 24 karat (pure) gold is $44.05 per gram.
You won't be paid this amount! Most gold buyers will quote a price for 14 karat gold, as that is the typical quality of much gold jewelry. 14k gold is 58.3% pure. That brings us to $25.70 per gram. This is called the "melt value".
You're not going to be paid this amount either, but we're getting close!
Now, this is where you will see the difference in your buyers. The guys on TV, on the Internet or the "Road Show" guys that roll into town on weekends generally low-ball the offer price (see this Wall Street Examiner article). They have been reported as paying between 18% and 22% of the melt value -sometimes much lower.
That means they would pay you between $4.62 to $5.65 per gram for your 14k gold!
These buyers have the right to make a profit - we make one too! But that seems like a lot of profit on the backs of the sellers. I guess someone has to pay for those million dollar TV advertising budgets...
Here at Solano Coin, Gold and Silver, we would pay you $16.70 to $17.53* per gram of 14k gold (with a spot gold price of $1,370).
How can we afford to pay so much? Quite simply, we don't have the overhead they've got, and we can pay you more for your gold.
Don't Be Fooled! Some gold buyers will quote a price based upon Pennyweight instead of grams. It is a much higher LOOKING price.
For instance, the $16.70 price per gram we would pay you would be represented as $25.97 per pennyweight. Be sure you're quoted in grams, not pennyweight when comparing buyers.
* How can you get that extra payment per gram? Bring your gold jewelry into our shop and mention this newsletter, and we'll pay you the extra 5% bonus. It's that easy!
Next Issue: The Trustworthiness of the gold test - valuation and "lost-in-the-mail jewelry"
Most jewelry is stamped with the purity of the gold - 10k, 12k, 14k, 18k being the most common. To determine the pricing, simply take the stamped purity and divide it by 24 (pure gold). Do the math as described above, then shop around for your buyers. Call them and ask what they're paying per gram.
Insider's Tip: Our best referral source - the slimy competition across town (yes, I'm biased!) - always asks his customers, "So, what do you think your gold is worth?" He may have tested and weighed out the gold, and saw that market prices were $400. He asks the question, and the customer says, "Oh, I don't know. Maybe $75 or $100."
He then says, "Well, you're going to be pleasantly surprised! I'm going to pay you $250!" The customer is thrilled because they're being paid way more than they thought it was worth. The slimy gold buyer is going to pocket an additional $150 from the customer.
These folks are not very happy when they find out they've been scammed. Word gets around quickly...
We ask the same question, but we have written down the $400 price and placed it face down on the counter in front of the customer. They make their guess, then flip over the paper, and freak out! It's very cool. I've told a couple of people that I'm going to take the footage off of our security cameras and make a TV commercial with their reactions!
Get educated so you don't get scammed!
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Copyright 2010 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com