Buying and selling gold for profit is one of fastest and most efficient ways of making money. You can decide if you want to sell a little for extra side money or get into selling and buying gold on a full time basis.
Investing in gold and silver is a good idea during any economy. It is a simple process that any person can earn from. Here are some tips that can help you make money by buying and selling these precious metals
You can make good of money when you start a scrap gold-buying business, but it carries some risks. Your business can be as large or small as you want, and you can still make money with one gold-buying event per month. You may want to stick with a fast turnaround unless you want to keep the gold and risk your investment on this bumpy ride.
Gold has always been a very in-demand precious metal ever since its discovery. It’s worth getting higher as time passed by. It also symbolizes the country’s worth as it requires gold to make currency.
You can buy gold for several purposes like adding it to your assets, to sell it in the future to have gains, or even make it your business as part-time or full-time. Knowing how to do this kind of business will make your cash for gold business profitable.
Starting a cash for gold business is not as difficult as starting up other kind of business as this will not require you intense research and costly business plans. It has no start-up cash out and no government license/permit needed. All you have to gather are the information to help you understand how to manage this kind of business.
What you should have:
- Knowledge to appraise gold – Before engaging into gold buying business, you have to acquire knowledge on how to appraise certain item to determine the gold content of the jewelry and for you to determine how much you are going to pay for it and how much you are going to sell it as well.
- Gold testing kit – You can also buy this from a legitimate gold refinery company.
This should include the following:
- Acid and a stone for testing gold content of the jewelry
- A magnifying glass or also known as jeweler’s loupe
- A needle with a gold tipped used to test the acid accuracy of jewelry
- Tools use to remove stones and other impurities from the gold jewelry
- A magnet
Weighing scale – This is very essential as you will need this to weight the gold to know how much it worth. It is preferable to have a digital one.
Cash – Definitely it is needed because you are buying gold from your clients. However this kind of business is not as risky as any other businesses because you are buying a tangible and precious item.
Things to consider in starting cash for gold business:
- Look for clients where you can buy gold from. At first it maybe your family members, friends and the people close to you or even your colleagues. Let them know that you are into gold buying business so they will understand that you will buy their gold at competitive price.
- Know how to make the pricing. This is where your knowledge in upraising jewelry comes in. It is necessary to know whether the item contains or is made of genuine gold or not. The price will vary based on the value of its gold content. However, there are gold such as gold coins that can easily be valued based on the standard guidebook to coins.
- Identify where to cash out your gold. It is important to know where to sell your gold at a higher price compare to how much you bought it to make profit. It maybe a bigger jewelry store, or old coins store or even a gold refinery.
Getting Started
Gold buying is a cash business, and it takes plenty of it to get started. Considering gold prices stayed at the $1,000 per ounce range in 2013 and 2014, you’ll need to keep thousands of dollars on hand. Carrying this much cash also necessitates security and staying with customers you know and trust. Unless you plan your gold-buying business for quick turnover, you can ride the volatile gold prices and make even more money or lose much of your investment.
Tools of the Trade
While gold buying takes a lot of cash, tools won’t cost nearly as much. You’ll need some specialized tools to run your scrap gold-buying business so you don't end up paying gold rates for cheap metal. Most gold jewelry is stamped to show its purity, usually 10 karat, which is 41 percent pure, or 14 karat, which is 58 percent pure. Occasionally, though, you have to test it. This is usually done with nitric acid, which is strong enough to burn and stain your fingers. You also need high-quality scales to accurately weigh the gold.
Setting Your Price
The cost of gold changes day to day, sometimes minute to minute. This means you need to monitor it constantly. The spot price for gold and silver is your benchmark. From there, set your dealer’s commission, also called a bid-ask spread. According to the Goldprice website, the dealer A-Mark charges up to 2 percent commission on a transaction, depending on its size.
Parties and Private Clients
Like gatherings used to sell dishware and cosmetics, you can host a gold-buying party. Bring your testing gear and make your transactions over refreshments. Done right, you can make decent money hosting one gold party per month, and your satisfied customers might refer you to their friends. From there you may start accepting clients individually, arranging the transaction and agreeing to meet in a public place.
Selling Your Gold
Maintain a relationship with several large precious metals dealers to get the best price when you want to sell your scrap gold. Most will quote over the phone, and some will have a smaller buy-sell commission than others. You may want to get rid of your gold quickly or hold onto your metal, depending on whether you want to cash out or call it your personal investment.
So you want to start a cash for gold business? Well, pat yourself on the back, Cash for Gold is hot hot hot right now, which is the good news. The bad news is, you will have a lot of competition (depending on what part of the country you are from) so having plenty of experience is a major plus.
Following this Instruction:
- The Why? : If you are Just Looking to Buy Scrap Gold, a one time deal, it is very easy. Just ask all the people you know if they have any gold they want to sell or if they know of someone who does have gold they want to sell. Communicate your desires to buy scrap gold with associates and co-workers, and even to the cute waitress -who you hope is checking you out. Eventually, you will find someone who wants to sell you their gold! But if you are interested in doing this multiple times, then it requires some finesse, some planning and a lot of know how, so here we go:
- Learn the Value of Scrap Gold which is easy to figure out: Take the Spot Price of Gold (what gold is trading for) and divide it by 31.1 to get Grams or by 20 to get pennyweights. Then Multiply this number times the Purity Level (percentage of gold)and you have the value of the gold. Here is simple example: A. Spot Price: $1000/31.1 = $32.15/gram of 24K. So one gram of 24K is worth $32.15 under a $1000 Spot Price. B. What about 14K? Determine purity by dividing 14k/24k = 58%, so one gram of 14k would $32.15 x 58% = $18.64. Now you got it. C. Figure Out How much you want to pay. Check out your local competition and price yourself accordingly.
- Licensing: In the US you need a License to Buy and Sell Gold, to be a Scrap Gold Buyer. If you buy and sell without a license you are in violation of your City's Laws in which case you can be brought up on Charges. So you have 2 Options: 1. Get a licence or 2. Work with someone who already has a licence as a Broker/Buyer. Of course, both options will cost you money, and each of them has its advantages. If you are ready for the deep end, I would recommend just Starting your own business, but if you need to learn it first, see the potential and expand, then the second option might sooth you best. Make sure to find a good company to work with as this is most important.
- Advertising: This part depends if you are going in business alone or if you are to become a broker with a company and purchase it on their behalf. If you are to do this with a legitimate company make sure that they teach you the ins and outs of marketing and that they provide you with some ideas. Some companies may even give you exact marketing plan while other will leave you off on your own. Try going with the former rather than the later. Here are some Marketing Ideas anyway: You can try Free Methods, like CL, Online Marketing, Blogs, etc and Paid for Ads like print ads, online, radio and TV. As with any business, this is the biggest part, and it costs money.
- Once you are up and running and making money, congratulate yourself. Now stop and realize its time to make even more money! A Cash for Gold Business can make a lot of Money! Some Buyers are buying Gold for as low as 20cents to the dollar while other are paying as much as 70cents to the dollar.
Tips
- Make sure to get at least 75cents to the dollar when buying on someone else's behalf and more when you start doing high volume.
- When working as Broker, make sure you are actually working as a broker, which means that you will be given paper work to fill out. Each sale must be documented, so the store you are working for should give you this.
- Make sure to get marketing direction and a way of generating cash for gold purchases. There is no value of being a Broker if you are not receiving marketing help.
Things You'll Need
License: Get a Licence or Work with someone who has a License
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