I've got some great ideas on how to purchase metals that I could sell for Bitcoin at lower than what the online retailers charge.
Out of curiosity, how are you able to buy silver/gold coins at below retail price? Is it because you are buying "in bulk" (aka the largest quantities at a time)?
From what I can tell, there is quite a lot of demand for numismatic coins. Although it would probably require a little bit additional capital on your end, it might even make sense to get some of the numismatic coins you are selling graded by ANACS or NGS and sell them in their slabs.
There are a couple of ways I do this. My first method is to buy overstocked material from larger vendors. If a vendor has an abundance of one item in their inventory, but they are sold out of others and need the capital for repurchase of other things, I can sometimes find a good deal by contacted them and asking to buy their overstocked items. There are also tax implications for vendors if they take longer than a year to sell a product. Their tax rate just about doubles on any profits they make for metals sold if they purchased them over 1 year ago. Short term investment vs Long term investmen taxes. They can sell their products that they have had for almost a year a bit cheaper as well.
Method 2 works mainly with numismatic coins. If you search auction sites like Ebay, you will not find any good deals. Typically, you will find things sold at least 10% higher than elsewhere due to Ebay's fees. However, when numismatic coins are sold at bad times or with description errors, you can actually find a decent deal from time to time. At 2-3am I like to search for sivler and other common misspellings to see if there is anything interesting. Because of their premiums, most auctions will start around spot price, but the coin might be worth 50% over spot if not more. If no one finds the auction, I can snag things near spot value or at least under priced.
Method 3 is to buy directly from individuals. As people in this thread have mentioned, I must be really lucky to have generous local metal dealers. Well... probably its just that theres a huge amount of demand in my area, so they can afford to pay spot or better when they buy metals. But, others seem to not be so lucky. If you go to a pawn shop, you are going to get ripped off tremendously. Some local dealers are incredibly shady as well. If you sell on Ebay, you are likely to only get 85-90% after Ebay fees. Depending on the item, I can buy it at spot from those people, or sometimes above spot, and still make a profit undercutting big online retailers.
Small retailers can also be the source of really good prices. When my shop opens, my first priority will be liquidation of my inventory so I can expand my range of items and cycle in whatever it is that people want, rather than holding onto inventory for months. Small retailers in particular need working capital. If people are buying something like crazy, but their inventory is heavy on another type of item, they are less reluctant to sell me whatever it is is that is keeping them from restocking more of their hot item. That goes back to #1, but for small dealers its more about the capital as large dealers have access to more.
And as I said before, on top of that, I make a couple of % on the BTC to Fiat conversion before I buy more metal. Metals are a very low margin marketplace with most dealers charging just a couple of % on every item they sell. I believe that I can get that couple of % just trading the BTC to fiat to repurchase more inventory. If I buy silver for example at spot value (aprox $20/oz) and sell it at spot value, I can get 5% or so converting from BTC to Fiat. The buyer pays spot, and I get spot +$1 in that case. My buyers get their metals incredibly cheap, and I still get that couple of % needed to keep going and expand my inventory.
I've never sent any coins off for grading myself, however I'd do it in a heartbeat if I found something worth grading. Most graded coins are ones that are coming directly from the mint, so before they have any time to get flawwed. By the time they hit the secondary market, even coins in great shape might not be flawless anymore. Of course, if I find a roll of flawless coins, I'd send them in for grading if it was worth it to do so.
. I've got an ultrasound machine on the way so I can be 100% sure of everything I sell. When I order things from multi million dollar companies, I'm not worried. When I buy from individuals its nice to be able to test things in a nondestructive way.
if you are interested in multiple items let me know and I still have a little room to cut deal!
