Gold bullion

[RoughDog]

I have a question I have been pondering?

How does a gold bullion dealer sell gold cheaper than the manufacturer?

 

Example: Royal Mint sells 1 oz gold Britannia in max quantity of 100+ at £1,4333.66

Popular dealers sell an individual coin far cheaper than this.

My question is how does a dealer purchase their coins so cheap?

Surely gold cannot be purchased cheaper than spot price, then the mint has to produce the coin and make a profit, the the dealer has to purchase it from the mint and make a profit.

Doesn't add up to me.

 

[Wakey]

I think most manufacturers of any product charge a premium for ordering direct. If they undercut their retailers why would they stock their product to begin with, no one would buy them and they'd just go direct.

It's a similair reason why Xbox or Playstation charge you more for a digital copy of a game than one that has to be pressed onto a DVD, have a cover printed, a case made and shipped half way around the world, because they want their product on the high street where you can see them.

[RoughDog]

Most manufacturers that sell direct to the public sell at RRP as far as I know.

At least the ones I have purchased from.

 

[Spark268]

that's a good question and one that i've often wondered.

As already mentioned, RM may sell at a higher price to the public than to dealers.

Also, In order to become an official dealer, you need to have minimum ordering volumes. I'd guess therefore some would therefore be happy to sell at small margins or even at a slight loss to maintain this position..e.g. being front of the queue for new releases.

and finally, some dealers in the UK have buy back rates at significantly below (>5% spot), and then sell them back on at a significant profit. Most sovs that they buy back will be in BU condition anyway !