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Buying & Selling Gold Scrap / Broken Jewelry

Discussion in 'General Entrepreneur Discussion' started by bosco, Mar 8, 2008.

  1. bosco
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    bosco New Contributor

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    Anyone buying and selling gold? I do and would like to talk to others who do as well.

    Let's talk!
     
  2. bosco
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    bosco New Contributor

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    Has anyone gone through the process of buying and selling broken gold jewelry for profit? Curious to know how its done...
     
  3. fanocks2003
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    fanocks2003 Banned

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    I have bought some gold on certificates. So called Perth Mints. See Kitco's website.
     
  4. Edge
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    Edge Contributor FASTLANE INSIDER Summit Attendee

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    Sorry to keep answering your questions with questions, but why physical gold where you are at the mercy of physical delivery and pawn shop type dealers?

    Why not open up a brokerage accoung and buy and sell gold futures or ETFs and maintain control over your risk through options on those positions in a liquid marketplace?
     
  5. CarrieW
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    CarrieW Gold Contributor Read Millionaire Fastlane Speedway Pass

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    why not physical gold?

    I would love to have some stashed in my closet lol.

    some people believe that eventually paper and unpure metal coins will be worth nothing at some point in the future. Gold, silver, and other PHYSICAL tangible items will at that time be the only thing of any real value to use to live and conduct business.

    not saying its going to happen but I believe anything is possible. if and when it does He will be able to eat! lol
     
  6. bosco
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    bosco New Contributor

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    No need to appologize. I scincerely appreciate your input.

    Im holding physical gold aquired through an industrial salvage process we do. Since then, I mentioned to people that I was going to buy broken gold jewelry and wound up buying quite a bit from family for.

    What I want to know is how to maximize return when selling this. Should I refine to a particular state? I have the capabilties to do so. Also who / where do i sell to? I want to reap the most return/reward so I dont was to send it to another scrap gold dealer.

    Perhaps take a trip into manhattan (not to far) and try to sell to a jeweler?
     
  7. bosco
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    bosco New Contributor

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    Just checking in to see if anyone else has purchased gold jewelry / broken gold jewelry with the intentions of turnign a proffit.

    Anyone?
     
  8. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    I dont know anything about the business but it appears that the Cash4Gold model is working pretty well these days.

    Anyone else see the ad during the SB last night? It was my favorite.

    [ame=http://www.youtube.com/watch?v=px-tqbAVeCo]YouTube - cash 4 gold Superbowl Commercial[/ame]

    If they are able to grab SB time slots and add Ed McMahon and MC Hammer to their payroll, I would think it must be going fairly well.

    Again, I don't know how the business works but am amazed that they can get people to just send off their gold and wait to see if something ever comes back. There would have to be a marketplace for a more local, walk-in, type of customer who would be too paranoid to send off valuables in the mail.

    Not sure how you would resell it but talking to jewelers might not be a bad place to start.

    Good luck.
     
  9. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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  10. hakrjak
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    hakrjak Bronze Contributor Read Millionaire Fastlane

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    Just like a lot of things -- companies like this look like they are trying to buy something for nothing, and then resell it again at full price to make a profit. I'd guess from looking at their commercial that they pay maybe 10-15% of retail value?

    Cheers,

    - Hakrjak
     
  11. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Thanks for those links, JScott. I am not surprised..... as I said, I am shocked that people are willing to just ship their gold off and wait for a reply.

    That said, with your additional information in mind, it sounds like there might be an even greater oppotunity to execute this business model in a smarter/more professional manner.

    Amazing what people will sacrifice for convenience, huh? (in this case, both customer and vendor)
     
  12. hakrjak
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    hakrjak Bronze Contributor Read Millionaire Fastlane

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    Ditto -- Wouldn't you be better off mailing your gold scrap to a friend, getting it insured for a few dollars, and then let it get "lost in the mail"? -- LOL... Viola! You just got 100% of cash value for your gold scrap!

    - Hakrjak
     
  13. I85
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    I85 Contributor

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    Around here jewelery shops will only pay a % of scrap value for the gold. I have always received more on ebay than what I was offered by them.
     
  14. china
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    china New Contributor

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    I buy and sell gold and silver scrap and jewelry. The "Cash4Gold" model is pretty much standard in the business. They are not buying: 1) jewelry; 2) gemstones; 3) namebrands. They are paying the wholesale price for scrap gold and that is very disappointing to a lot of people. It's not really a scam. They have to make money doing it or it isn't a very good business model. (Maybe some of their business practices are unethical, but paying less than "retail jewelry price" is something they have to do to stay in business.)

    Since I buy jewelry to keep it as jewelry (meaning it isn't all scrap) I can pay a higher price for it than a lot of people will.

    NEVER put UNIQUE antique pieces in the scrap pile! Most of the time, they are worth more as jewelry, particularly if they can be repaired.

    Now the problems with buying scrap...

    Many pieces marked 14K or 18K or whatever aren't gold at all. They are gold plated brass or pot metal.

    Many are under-karat, meaning they are 10K marked 14K or 9K marked 12K.

    The way I test gold, I use acid and I basically ruin the piece if it isn't gold because I put the acid directly on the piece. (Other testing methods are not as exact, I've found.) There are other ways to test but I usually process a lot of pieces at one time and I'm only concerned with "Gold or Not Gold."

    The biggest problem that you have to contend with as a small dealer is that the big refineries only want big amounts of gold -- measured in troy pounds. You will end up selling to a smaller refiner or a smaller dealer. The more people in the food chain, the less you will get because everybody needs (and deserves) to make a profit buying and selling.

    (Side note: Jewelry manufacturers or jewelry designers typically buy gold in processed forms like 14K gold wire, 14K gold sheets, etc. They have no real use for scrap that isn't processed except to throw it in with their scrap to resell when they get done making whatever they are making.)

    Anyway, everything I wrote above applies to silver except that you need to have many pounds of silver to deal with a decent size refinery. And usually they will tell you that you brought in less pounds than you brought in but that is just part of the game.
     
    hakrjak and phlgirl like this.
  15. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Great info, China! ++++

    Thank you for taking the time to explain. Fascinating, really.

    If the buyer and seller are both satisfied, it sounds like a good deal to me!
     
  16. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Good info, china.

    I have an opportunity to sell gold from a producer in southamerica... and I have no clue how to do that and what contacts to look for. This is good information, thanks.
     
  17. Rawr
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    Rawr Gold Contributor Speedway Pass

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    Interesting topic and I'd love to hear more on how much money can be made /what the margins are.

    Last I was around gold and diamonds, I was offered $120 for a $800 necklace. I was told shops have 400% markup on jewelery.
     
  18. china
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    china New Contributor

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    There is a huge markup on jewelry, but it's no different than the markup on cotton fabric on a roll and a pair of cotton pants.

    Pure gold is 24K. Most gold jewelry is 14K so it is 14/24 parts gold (or 7/12ths). The other 5 parts are some other cheaper metal (usually used to strengthen gold). So, you get spot metal costs plus manufacturing costs and that is the price of jewelry.
     
  19. china
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    china New Contributor

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    Last week, I decided to see if I was getting the best price I could for my gold.

    I took a single piece of jewelry which was 14K and weighed 34 grams. The melt value with gold at $940 is $540+. I was looking for someone who would give me around $500. The piece isn't really scrap (meaning, it still works, it's not in pieces) but it's not very interesting so it has a low resale value.

    I went to a coin shop where they advertise they buy gold but they referred me to someone else. I called the person I was referred to and he offered me $340 ($10 a gram).

    I also looked on the internet and found some people who looked like they might pay more but they were all "Scrap Dealers Only. We Do Not Buy From The Public." Now I would qualify as a dealer since I have a lot of gold to sell and I test my gold -- but I didn't contact any of those people. I already deal with a smaller refiner.

    Bottom line: If you are going to try to deal in small amounts of gold, you are looking at a significant cut off the price of spot gold. If you have the money to invest to buy until you have a significant amount of scrap, then you can do a lot better because you can deal direct with a refinery.

    Also, almost everyone of them will "under-weigh" you. That means, if you think you have 10 pounds of silver, they will weigh it as 9 pounds of silver.

    I still have my piece of jewelry so I am going to try a couple of other places to see what they will offer but I have a sneaky suspiscion that my refiner is probably going to end up being the best place to sell.

    (I just wanted to add: The guy who offered me the $340 actually pays the most for buying gold from the general public around here.)
     
  20. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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  21. 365
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    365 Contributor

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  22. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    He was reported as a spammer and it was removed. Are you a friend of his?
     
  23. 365
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    365 Contributor

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    No, I was just confused:smxB:
     
  24. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    Cool. He is welcome to return and contribute to the forum and build relationships. He is not welcome to come on the forums and begin soliciting money for his ideas. Ya'll are both from Germany and I thought he may be a friend. :cheers:
     
  25. CommonCents
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    CommonCents Silver Contributor Speedway Pass

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    I've read there is about a 30% margin on those buy jewelry for scrap type deals. Not sure if that covers marketing costs.

    I've heard of home gold jewelry buying parties as well. What methods are used to verify the gold content?

    Pawn shops are doing well buying gold jewelry and selling it as scrap.
     

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