How does bullion dealers stay in business with the constant price variation ?

[Kaynos]

I'm curious, where is their profit margin ? Silver is now at 30$, Canadian Maple Leaf is around 33$ so that's a 10% premium, are they making money off that premium ? I mean at what price to they buy these coins ?

 

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[jim4silver]

I'm curious, where is their profit margin ? Silver is now at 30$, Canadian Maple Leaf is around 33$ so that's a 10% premium, are they making money off that premium ? I mean at what price to they buy these coins ?

Kaynos,

It varies by what size coin dealer/store you are talking about, but in general the key is moving inventory. They make their money off the spread between what they pay you for the item and what they sell that item for to some other customer or maybe wholesale it.

A store that gets a good amount of traffic can generate lots of profits if the owner knows what they are doing. Many of them also buy jewelry and silverware, etc.

The beauty of it for them is they can make a profit whether the PM prices are going up or down. It doesn't matter as long as they have traffic coming in the store- buying and selling.

PS If you want to see a site that posts dealer bid/ask prices and shows roughly what dealers pay each other for PMs, check out:

Coin Information | Coin Info . com


Jim