Why would anyone sell their silver to a dealer at spot when you can sell on 2nd hand market for basically double?

[MikeB]

I am new to this forum and this is my first post

I thought I would check out a known dealer's buy back price for silver and was surprised to find they pay not even spot price for a 1oz Silver Britannia.

Don't these coins sell consistently for £25-£30 on eBay and on here? Or am I missing something

I love silver but being new just wondering if maybe I should look into gold where there is no VAT in uk and lower premiums

 

[ChrisSilver]

Slightly exaggerating, but imagine you had £500,000 or even £1million of silver and needed to cash out asap to invest into another project.

A dealer (depending on which one) will likely be able to provide that amount of liquidity. Even items that are only £10’s of thousands may move much easier and quicker through a dealer. It’s also much easier, but the trade off is lower prices. Those who have the time and willingness to sell their items directly and who want the best prices may find it better to list on the forum. There is also eBay like you have mentioned and auction houses, all different routes available for people each with their own advantages and disadvantages. 

[ChrisSilver]

12 minutes ago, MikeB said:

I love silver but being new just wondering if maybe I should look into gold where there is no VAT in uk and lower premiums

Some U.K. members also exclusively invest in / collect gold. Particularly gold sovereigns, for the reason you have mentioned here.

[modofantasma]

As Chris says sometimes price isn't someone's main consideration. Speed might be preferable if someone doesn't have the luxury of choosing their selling time in advance. 

Re the vat, gold seems a better option rarely having to pay more than 3 to 5% premium compared to silver at 50% plus... Who knows what the prices will do in the future maybe silver will work out to be more profitable, If I was just starting over now or I could only choose 1 metal as a UK based person I'd probably start with gold. 

 

[modofantasma]

Eg if you're sat on a monster box of Brits acquired at £14 an oz and you can sell them all in one go tomorrow for £18 an oz compared to maybe low 20s on here and having to deal with a couple weeks worth of post trips and different buyers and messages... Maybe the opportunity you're moving the money into outweighs the few quid extra you could get 

[modofantasma]

Also welcome to the forum 👍🏽

[TeaTime]

Spot price is used to value silver as a commodity. The reality is even generic silver coins have a value over and above the cost of the raw material. (I have historically sold for spot when i have purchased low cost bullion silver - not ideal but good for fuss-free cash). The real question should be 'why do people buy high and sell low'.. A dealer paying spot or under will then re-sell that silver for a profit.

As for gold sovereigns - you will be lucky to make much of a premium even selling privately. Historically silver has outperformed gold when it comes to coin re-sale values. Silver coins are as much a store of wealth as gold but also carry a premium (the same premium people complain about)..

If anyone is stacking PMs as a commodity then gold has outperformed silver recently (by a huge margin) but for those with an eye on collecting PMs then silver is the way to go (unless you are forced to sell quickly by circumstance).

I honestly don't know why premiums are higher on silver coins than on gold. But it has been that way for as long as i can remember.

[AppleZippoandMetronome]

Another side of it - and this is the reason pawn shops are able to operate as well - you're pretty much guaranteed quick cash with a dealer and sometimes if you don't have a cash buffer that access to instant cash can become more important than the losses you might incur. As much as we all love silver I do really wish this topic would get discussed more often especially with newer members. As important as I think both gold and silver are - having a rainy day fund in cash is probably more important. You never want to find yourself suddenly facing a bill that needs to be immediately paid and not have the funds available for it as this is when you'll get desperate and need to liquidate whatever you have likely at steep losses.

[Arganto]

14 minutes ago, AppleZippoandMetronome said:

Another side of it - and this is the reason pawn shops are able to operate as well - you're pretty much guaranteed quick cash with a dealer and sometimes if you don't have a cash buffer that access to instant cash can become more important than the losses you might incur. As much as we all love silver I do really wish this topic would get discussed more often especially with newer members. As important as I think both gold and silver are - having a rainy day fund in cash is probably more important. You never want to find yourself suddenly facing a bill that needs to be immediately paid and not have the funds available for it as this is when you'll get desperate and need to liquidate whatever you have likely at steep losses.

Fiat currency maybe baseless and silly from a conceptual point if view but we live in a world where it is the medium of trade for most people. This here post is worthy of note.

As for selling to a dealer then what has been said above rings true; a quick payment for a large amount is sometimes what is required especially if you accrued the inventory when spot was lower at the time of purchase. If Mr. Average Joe is looking to offload some ounces to fund something else then private sales are the most profitable way to go, especially if you're not in a rush. Another consideration is that the seller may not want to package and sell multiple packages for a large number of private sales if there is a lot to shift. 

A good plan to is have an exit strategy in mind. Personally I would always look to hold for as long as possible but would initially consider the forum as my first port of call if I did have to sell. That said if a big outgoing was imminent and I had no other option then taking the fiduciary hit and letting it go as a batch to a dealer is something I would have mentally prepared for.

I personally am thankful that I have hedged into a medium that has multiple options of 'escape'. Many assets are more difficult to shed, and some outright lose value overnight...

[Pete]

Dealer buy back say £17.20
Sale on here £24 maybe
Double dealer price = £34 say
You might need to rework your title.

🧐

[Roy]

This is another reason for joining the forum as a premium member and building up feedback- I'll use myself as an example. 😇

Let's say I need money fast and wish to liquidate some silver, but it's 11pm and a weekend or my silver is in storage.

If I advertise it here for spot price, it will sell immediately and the money could be in my account within minutes. The buyer can 'trust' that I will post the silver at the earliest opportunity and that they will receive the item(s) that they paid for.

No dealer 'insults'.

Likewise, I am happy to pay for items that I will receive at a much later date. I do it all the time, it's all about building relationships and understanding TSF feedback system. Your reputation is everything where trade is concerned.

[Arganto]

11 minutes ago, Roy said:

This is another reason for joining the forum as a premium member and building up feedback- I'll use myself as an example. 😇

Let's say I need money fast and wish to liquidate some silver, but it's 11pm and a weekend or my silver is in storage.

If I advertise it here for spot price, it will sell immediately and the money could be in my account within minutes. The buyer can 'trust' that I will post the silver at the earliest opportunity and that they will receive the item(s) that they paid for.

No dealer 'insults'.

Likewise, I am happy to pay for items that I will receive at a much later date. I do it all the time, it's all about building relationships and understanding TSF feedback system. Your reputation is everything where trade is concerned.

Nicely put

[MikeB]

1 hour ago, Pete said:

Dealer buy back say £17.20
Sale on here £24 maybe
Double dealer price = £34 say
You might need to rework your title.

🧐

I seen many 1 oz britannias sell on eBay for 30 + postage still today

[MikeB]

Thanks everyone to the responses on my first post. It makes a lot of sense now. I guess its like selling anything to a trader who exists to make a profit, as its the convenience and speed of sale that you trade for price. I think as Roy said getting a good trader reputation is vital to sell and keep the premiums

[ArgentSmith]

Selling Silver at spot is like selling a used motor to webuyanycar.com

[JoncreteCungle]

Sometimes circumstances dictate you have to take the hit and sell to a dealer. When I cashed out my silver & gold years ago to buy my home, I was able to sell a small amount privately for a good price. I couldn’t wait for weeks / months to sell it all this way or the property would have sold to someone else.

The discount I managed to obtain on the house (from sellers original asking price down to what I paid them) was greater than the amount selling the bulk of my pm to a dealer v private sales cost me. 
 

I wish I could have kept my pm and bought the house, but the opportunity was too good, time and cash in short supply, so I had to bite the bullet. I have started to rebuild my position in gold and silver recently. 

[James32]

10 hours ago, JoncreteCungle said:

Sometimes circumstances dictate you have to take the hit and sell to a dealer. When I cashed out my silver & gold years ago to buy my home, I was able to sell a small amount privately for a good price. I couldn’t wait for weeks / months to sell it all this way or the property would have sold to someone else.

The discount I managed to obtain on the house (from sellers original asking price down to what I paid them) was greater than the amount selling the bulk of my pm to a dealer v private sales cost me. 
 

I wish I could have kept my pm and bought the house, but the opportunity was too good, time and cash in short supply, so I had to bite the bullet. I have started to rebuild my position in gold and silver recently. 

Yes this is the perfect example of when selling to a dealer makes sense, no hassle and cash asap.

 

[LawrenceChard]

18 hours ago, ChrisSilver said:

Slightly exaggerating, but imagine you had £500,000 or even £1million of silver and needed to cash out asap to invest into another project.

A dealer (depending on which one) will likely be able to provide that amount of liquidity. Even items that are only £10’s of thousands may move much easier and quicker through a dealer. It’s also much easier, but the trade off is lower prices. Those who have the time and willingness to sell their items directly and who want the best prices may find it better to list on the forum. There is also eBay like you have mentioned and auction houses, all different routes available for people each with their own advantages and disadvantages. 

That's not really exaggerating.

I know at least one dealer who would buy and £500K or £1M, and pay out same day. Mind you, if it was £2M, it might be £1M, and the other half next week! 😎

[James32]

1 minute ago, LawrenceChard said:

That's not really exaggerating.

I know at least one dealer who would buy and £500K or £1M, and pay out same day. Mind you, if it was £2M, it might be £1M, and the other half next week! 😎

I'd say you have £2m+ just casually laying in your sock drawer😁

[LawrenceChard]

6 minutes ago, James32 said:

I'd say you have £2m+ just casually laying in your sock drawer😁

Shhh! 😎

[KevinFlynn]

1 hour ago, James32 said:

I'd say you have £2m+ just casually laying in your sock drawer😁

It is layered on top of the precious metals, so a casual thief only takes the fiat 😁

[LawrenceChard]

6 hours ago, KevinFlynn said:

It is layered on top of the precious metals, so a casual thief only takes the fiat 😁

How did you find out?

😎

[Minimalist]

Only mugs buy near double or double the spot price.

If a member is thinking about it then I have magic jelly beans to sell you.

[James32]

2 minutes ago, Minimalist said:

Only mugs buy near double or double the spot price.

If a member is thinking about it then I have magic jelly beans to sell you.

Can you confirm the percentage of magic in said beans? Asking for a friend of course. 

[Minimalist]

1 hour ago, James32 said:

Can you confirm the percentage of magic in said beans? Asking for a friend of course. 

33%