Doubled Premium in 1 Week on 2022 Gold Sovereigns - Cynical Rip-Off?

[LawrenceChard]

Doubled Premium in 1 Week on 2022 Gold Sovereigns - Cynical Rip-Off?

I was in our office @ChardsCoinandBullionDealer today, and was called over to look at our latest price / premium comparison report on 2022 bullion gold sovereigns.

In the past few weeks, I have kept seeing that a newish competitor into the UK bullion market was consistently cheaper on these than us, by about £1 per coin, or 0.5% approximately.

Quite a number of TSF members had commented on this.

Going from memory, I think our premium for single coins last week was 4.95%. Because of the panic buying starting late Thursday, we nudged this up to 5.35%, which we thought was fair considering market conditions.

Last week the premium quoted by the competitor mentioned was 4.4%. Today their premium was exactly double at 8.8% premium.

Is this just a cynical rip-off?

In all cases, these were for single coins, although we have quantity breaks on ours. Our top quantity break (1000 coins), comes down to 4.4%, up from 3.95% last week.

The competiitor does not show % premiums on its products, which would make comparison easier for investors, and also help to confirm our findings.

I checked the TSF comparison page, and show a partial screenshot, darkened to make the text / prices more visible:

The above was excluding shipping costs, although the inclusive results are not too much different.

I was sllghtly surprised that the premiums displayed did not match our own results, but I think price feeds may contribute to this, and also timing differences between each result, however they are in broad agreement with our findings.

The three bottom prices were greyed because of being out of stock. I think we sold out some time over the weekend.

We still accept orders for delivery when available again, and will of course honour the prices.

I am not able to state the anticipated delivery date.

I also used a different gold bullion coin comparison site, which shows "average" prices across price breaks, but also shows single piece prices including postage.

Modesty prevents me from disclosing who was the cheapest, and the site does not currently include the newish competitor mentioned above. 

I did a manual check just now, and found we were about £4 cheaper on singles including postage. Quite a turn round from £1 dearer one week ago.

This exercise struck me as showing how difficult it is to do accurate price comparisons manually, and also the different results across different comparison sites.

I would like to pose a few questions:

Were we right to increase our premiums slighly (0.5%) to try to protect our stock from selling out too quickly?

Would it have been fair to jack them up to competitiors levels?

Are any of these increases fair and ethical?

All opinions welcome!

😎

[James32]

35 minutes ago, LawrenceChard said:

Were we right to increase our premiums slighly (0.5%) to try to protect our stock from selling out too quickly?

The other dealer may have had to put the price up substantially to slow uncontrollable traffic? 

Edited September 12, 2022 by James32

[LawrenceChard]

1 minute ago, James32 said:

The other dealer may have to the price up substantially to slow uncontrollable traffic? 

"have to"?

Should we have done similar?

😎

[James32]

1 minute ago, LawrenceChard said:

"have to"?

Should we have done similar?

😎

Intentionally leaving words out to see if you are awake! You passed the test🥴

May have had to...

 

[James32]

3 minutes ago, LawrenceChard said:

Should we have done similar?

Why should you have to? Unless you are under the impression of no more incoming stock!

That's the real question, is the RM in so much of a spin that when current lines sell out they are gone for good? Is the 3 month waiting time a disguise for "operation charlie boy"

 

[Tn21]

I was paying attention to various bullion dealers websites following the queens death and tbf i think the increase in premiums are fair and worthy in this current climate.

Business is business

 

 

[LawrenceChard]

17 minutes ago, James32 said:

Why should you have to? Unless you are under the impression of no more incoming stock!

That's the real question, is the RM in so much of a spin that when current lines sell out they are gone for good? Is the 3 month waiting time a disguise for "operation charlie boy"

 

I think it got placed in a difficult situation.

It seems obvious that over the weekend, many people were panic or FOMO buying. This is mainly based on the RM website being back to 12,000+ queues, but I don't know what most of them were buying, and whether much of it was bullion.

The RM has to work within an official framework, and for UK coins, need royal or privy council authorisation for many things. The death of a monarch, although ultimately inevitable, and much forecast recently surely places some of its business into a situation where many things are out of its hands for a time.  I don't know how much time, and I doubt if the Mint know how long it may take to get back to normal.

I would have thought some things would continue more or less as usual, and perhaps their retail business has done, albeit with a big sales spike for a few days, perhaps a week.

Hopefully, any delays will be a matter of a few weeks rather than a few months, and this is also my best guess.

Interesting times!

😎

[James32]

1 minute ago, LawrenceChard said:

I think it got placed in a difficult situation.

It seems obvious that over the weekend, many people were panic or FOMO buying. This is mainly based on the RM website being back to 12,000+ queues, but I don't know what most of them were buying, and whether much of it was bullion.

The RM has to work within an official framework, and for UK coins, need royal or privy council authorisation for many things. The death of a monarch, although ultimately inevitable, and much forecast recently surely places some of its business into a situation where many things are out of its hands for a time.  I don't know how much time, and I doubt if the Mint know how long it may take to get back to normal.

I would have thought some things would continue more or less as usual, and perhaps their retail business has done, albeit with a big sales spike for a few days, perhaps a week.

Hopefully, any delays will be a matter of a few weeks rather than a few months, and this is also my best guess.

Interesting times!

😎

Probably being relatively late in the year has helped in one sense ( not many sovereigns/britannias etc left to mint if any, surely they have some stock sitting on shelves) then on the other hand the normal leisurely practice of rolling out the next year's sov/britannia has become a nightmare at best.

I know we all complain and joke, but I wouldn't like to be working in Wales over Christmas 😂

[SovereignBishop]

1 hour ago, LawrenceChard said:

Doubled Premium in 1 Week on 2022 Gold Sovereigns - Cynical Rip-Off?

I was in our office @ChardsCoinandBullionDealer today, and was called over to look at our latest price / premium comparison report on 2022 bullion gold sovereigns.

In the past few weeks, I have kept seeing that a newish competitor into the UK bullion market was consistently cheaper on these than us, by about £1 per coin, or 0.5% approximately.

Quite a number of TSF members had commented on this.

Going from memory, I think our premium for single coins last week was 4.95%. Because of the panic buying starting late Thursday, we nudged this up to 5.35%, which we thought was fair considering market conditions.

Last week the premium quoted by the competitor mentioned was 4.4%. Today their premium was exactly double at 8.8% premium.

Is this just a cynical rip-off?

In all cases, these were for single coins, although we have quantity breaks on ours. Our top quantity break (1000 coins), comes down to 4.4%, up from 3.95% last week.

The competiitor does not show % premiums on its products, which would make comparison easier for investors, and also help to confirm our findings.

I checked the TSF comparison page, and show a partial screenshot, darkened to make the text / prices more visible:

The above was excluding shipping costs, although the inclusive results are not too much different.

I was sllghtly surprised that the premiums displayed did not match our own results, but I think price feeds may contribute to this, and also timing differences between each result, however they are in broad agreement with our findings.

The three bottom prices were greyed because of being out of stock. I think we sold out some time over the weekend.

We still accept orders for delivery when available again, and will of course honour the prices.

I am not able to state the anticipated delivery date.

I also used a different gold bullion coin comparison site, which shows "average" prices across price breaks, but also shows single piece prices including postage.

Modesty prevents me from disclosing who was the cheapest, and the site does not currently include the newish competitor mentioned above. 

I did a manual check just now, and found we were about £4 cheaper on singles including postage. Quite a turn round from £1 dearer one week ago.

This exercise struck me as showing how difficult it is to do accurate price comparisons manually, and also the different results across different comparison sites.

I would like to pose a few questions:

Were we right to increase our premiums slighly (0.5%) to try to protect our stock from selling out too quickly?

Would it have been fair to jack them up to competitiors levels?

Are any of these increases fair and ethical?

All opinions welcome!

😎

Thank you for such an insightful post.

I believe Tavex’s jacking up of prices in order to profit from her late majesty’s death is detestable.

I can safely say that I was a vocal fan of this new company previously, purely based on prices. Their recent actions however have shown me what they are about.

Lawrence, your company I believe has proven itself to prioritise ethics, morals and above all else, a genuine care of how you conduct yourselves.

 

 

 

 

Edited September 12, 2022 by SovereignBishop

[Petra]

However distasteful it may seem, companies are in business to make a profit. If people didn’t want to pay the prices and didn’t make purchases, then prices would remain as they were.

[Orpster]

I spoke to Tavex yesterday to chase outstanding orders which I had placed prior to the Queens passing.  Chap on the phone said they had increased price on 2022 sovereigns to control demand as they were receiving a volume of orders they knew they would be unable to cope with in a timely manner.  The issue was compounded because they had given people time off as they did not intend shipping Thu/Fri last week because of postal strikes, they have had to have people working overnight since to get orders ready for despatch and they will not clear the backlog until this afternoon at the earliest.  

I guess the proof of the pudding will be the price levels when things calm down again.  If there is a criticism of Tavex to be made here is is that they have proven they cannot flex to demand, but these were exceptional circumstances so I for one am happy to wait a little longer for my orders.  

 

 

[GoldStatue]

At the end of the day Tavex are the new kid on the block and they have under cut the other dealers to get in the market.

I wouldn't of heard of them or trusted them unless I had read on this forum that people had bought from them with no problems.

In a few years, assuming they get established in the UK, they could have the worst premiums on the market, so probably best to take advantage of while you can.

I do find it a bit odd that their 2022 bullion sovereigns never go out of stock though, it's possible that the wider coin buying market have no idea who they are.

Not sure that dealers putting up premiums because demand is high is a crime, just be a savvy consumer and only purchase when you feel the price is right.

 

[JamesH]

Business is business. I don’t think right/wrong comes into it. If the market is willing to pay what is being asked then  your price is ‘good’ relative to the competition. Arguably if you’re stocking out then there was still some meat on the bone and margins could have been higher. There will always be conditions that impact sales, both good and bad. I can see why people may observe this as perverse or distasteful but in strict business sense, it’s exactly what I’d expect to see. Likewise, if market conditions were horrible for dealers/sellers we’d all be buying up metals left, right and centre without a thought for the dealers going through tough times. Personally, if you have something someone wants and you’ve priced it right, then nobody leaves unhappy. We choose to buy metals. It’s not like the energy market where people have little choice and need to pay for heating etc. If we don’t like the prices, hold cash and buy at a later date. Just my tuppenceworth.

[James32]

1 minute ago, JamesH said:

Business is business. I don’t think right/wrong comes into it. If the market is willing to pay what is being asked then  your price is ‘good’ relative to the competition. Arguably if you’re stocking out then there was still some meat on the bone and margins could have been higher. There will always be conditions that impact sales, both good and bad. I can see why people may observe this as perverse or distasteful but in strict business sense, it’s exactly what I’d expect to see. Likewise, if market conditions were horrible for dealers/sellers we’d all be buying up metals left, right and centre without a thought for the dealers going through tough times. Personally, if you have something someone wants and you’ve priced it right, then nobody leaves unhappy. We choose to buy metals. It’s not like the energy market where people have little choice and need to pay for heating etc. If we don’t like the prices, hold cash and buy at a later date. Just my tuppenceworth.

Well said, the thing about common sense "it's not so common " 

[LawrenceChard]

12 hours ago, James32 said:

Probably being relatively late in the year has helped in one sense ( not many sovereigns/britannias etc left to mint if any, surely they have some stock sitting on shelves) then on the other hand the normal leisurely practice of rolling out the next year's sov/britannia has become a nightmare at best.

I know we all complain and joke, but I wouldn't like to be working in Wales over Christmas 😂

Lapland might be better.

I don't see why working in Wales over Christmas would be any sort of problem. Most years, Chiristmas Day falls on 25th December, and the following year normally starts on 1st January. Both of these are known in advance and can be planned for.

There is no sudden stop, change, restart necessary for coin production.

The closing years circulation coins can still be produced and released into the new year, and the new years circulation coins could be produced in the old year, then stockpiled rather than be released.

The situation is different for collector coins such as mint and proof sets, and commemorative coins. As we know, these (the new year's) are often not only produced, but also released during the old year.

The main difference this year will depend on whatever is decided for King Charles' coins, the first of which  I believe will be dated 2023, and it is likely that these will not be released until 2023, but this should not cause any rush, panic, or sudden change.

As it happens, I would not like to be working in Wales over Christmas. I fully intend to be skiing in the French alps.

Of course, if the Royal Mint wanted my advice over Christmas, I might consider helping them out over a Zoom call.

😎

Edited September 13, 2022 by LawrenceChard

[Orpster]

4 minutes ago, LawrenceChard said:

Lapland might be better.

I don't see why working in Wales over Christmas would be any sort of proble. Most years, Chiristmas Day falls on 25th December, and the following year normally starts on 1st January. Both of these are known in advance and can be planned for.

There is no sudden stop, change, restart necessary for coin production.

The closing years circulation coins can still be produced and released into the new year, and the new years circulation coins could be produced in the old year, then stockpiled rather than be released.

The situation is different for collector coins such as mint and proof sets, and commemorative coins. As we know, these (the new year's) are often not only produced, but also released during the old year.

The main difference this year will depend on whatever is decided for King Charles' coins, the first of which  I believe will be dated 2023, and it is likely that these will not be released until 2023, but this not not cause any rush, panic, or sudden change.

As it happens, I would not like to be working in Wales over Christmas. I fully intend to be skiing in the French alps.

Of course, if the Royal Mint wanted my advice over Christmas, I might consider helping tham out over a Zoom call.

😎

Do you know if the portrait side will be reversed for Charlie's coins @LawrenceChard

I thought is generally was except on one occasion when the new King wanted his 'better' side but all the mock up's I have seen have Charlie facing right not left

Edited September 13, 2022 by Orpster

[HerefordBullyun]

8 minutes ago, LawrenceChard said:

.

Of course, if the Royal Mint wanted my advice over Christmas, I might consider helping tham out over a Zoom call.

😎

Please make sure you invite your mate over for the Zoom call...

Hes been back on the radio again

 

Edited September 13, 2022 by HerefordBullyun

[Bars]

58 minutes ago, James32 said:

Well said, the thing about common sense "it's not so common " 

Real recognize real, good to see James backing James.

[James32]

7 minutes ago, LawrenceChard said:

any sort of proble

 

8 minutes ago, LawrenceChard said:

but this not not cause any rush

Can this imposter please put Lawrence back on the line😁

[LawrenceChard]

10 hours ago, SovereignBishop said:

Thank you for such an insightful post.

I believe Tavex’s jacking up of prices in order to profit from her late majesty’s death is detestable.

I can safely say that I was a vocal fan of this new company previously, purely based on prices. Their recent actions however have shown me what they are about.

Lawrence, your company I believe has proven itself to prioritise ethics, morals and above all else, a genuine care of how you conduct yourselves.

 

I never mentioned Tavex!

How did you guess?

Seriously, it is not illegal, dishonest, or unethical to increase prices, or simply to charge high prices. It is also normal for true dealers, as opposed to mere resellers, to adjust prices in response to supply and demand.

I already mentioned that we increased our 2020 bullion sovereign premiums be about 0.5%. Perhaps this could and should have been more, or perhaps we should have held a small quantity back in case some people wanted one immediately for a gift item, and limited sales to one per person.

Also, it there were never anymore minted, then our price decision would look rather stupid, because they could be selling at 50% premium by next year in that case. But I don't think that will happen, and while we don't know exactly what is going on at the Royal Mint, I feel sure they will want to keep filling demand for their flagship bullion product, in which case, it should only be a matter of a few days or a few weeks, before supply gets back to normal.

I have always tried to ensure that we provide good or reasonable value for money, and also good advice and reasonable service, while remaining a business with a relatively low cost base. Any business needs to maintain a fairly consistent strategy and image. If we increase a price sharply, we usually try to explain why.

On this occasion, as we expect any shortage to be over soonish, it appears greedy and short-sighted to jack up prices for a quick profit at the cost of future goodwill.

Tavex are not our only competitor to jack up their prices, they were just the one that stood out on our report yesterday, and to go from 4.4% to 8.8% (according to our research), doubling the premium, stood out.

I do hope that plenty of people notice this sharp and sharklike behaviour, and adjust their thinking, as you have done.

Thank you very much indeed for your extremely kind words and appreciation.

When supply returns to "normal", I think we might have to chop our 2022 bullion sovereign down to ensure we are the second lowest* priced supplier, after all we will need to make up for a few weeks worth of lost sales!

* We do not intend to compete with Harrington & Byrne's loss leader, one per household, prices. I do often encourage TSF members to make sure they all buy one from H&B.

😎

[LawrenceChard]

1 hour ago, Orpster said:

Do you know if the portrait side will be reversed for Charlie's coins @LawrenceChard

I thought is generally was except on one occasion when the new King wanted his 'better' side but all the mock up's I have seen have Charlie facing right not left

He has not told me yet!

I feel sure that Charles will want to respect the tradition, unlike Edward VIII, who did himself no favours by his narcissistic behaviour. We are all different, and I am sure he was entitled to live his own life in his own way, but not as King of England.

Anyone who has produced a looking right mock-up must be ignorant of the tradition. When I suggested a King Charles profile to our chief photographer, I did not stipulate a direction, but I was delighted to see:

It looks like he instinctively knew, or did his research.

@SemolinaPilchard might let us know.

[James32]

9 minutes ago, LawrenceChard said:

He has not told me yet!

I feel sure that Charles will want to respect the tradition, unlike Edward VIII, who did himself no favours by his narcissistic behaviour. We are all different, and I am sure he was entitled to live his own life in his own way, but not as King of England.

Anyone who has produced a looking right mock-up must be ignorant of the tradition. When I suggested a King Charles profile to our chief photographer, I did not stipulate a direction, but I was delighted to see:

It looks like he instinctively knew, or did his research.

@SemolinaPilchard might let us know.

Can I have a job?

[LawrenceChard]

1 minute ago, James32 said:

Can I have a job?

Don't tell me you have been made redundant again!

😎

[James32]

1 minute ago, LawrenceChard said:

Don't tell me you have been made redundant again!

😎

It's seasonal. 

[LawrenceChard]

1 hour ago, James32 said:

"any sort of proble"

"but this not not cause any rush"

Can this imposter please put Lawrence back on the line😁

I had to check whether you were using the newly discovered mis-quote trick.

If you see a post in my name but without any typos, you should get suspicious.

I should definitely not, not, repeat not, use double negatives. Not only are they ambiguous, but they are not clear either. Not good writing style.

😎