Does size matter ?

[shortstack]

Ok guys your opinions please.

Stick to 1oz (bullion opposed to proofs/numi) or vary the collection with some 5 and 10oz examples? 

Are the premiums fair?

Some of the 5 oz are stunning (queens beast in particular)

I have watched @ShadowStack video on YouTube and he explains his thinking very well ref this issue, as he does liquify more often than others and as I'm building a pension pot does it matter? Should I just buy what I like ? 

Thoughts? Opinions?

Cheers 

SS

 

[oliversw5]

Buy a mixture of everything, treat coins like shares. You get the premium out the other end if sold properly. 

[shortstack]

Just now, oliversw5 said:

Buy a mixture of everything, treat coins like shares. You get the premium out the other end if sold properly. 

Fair point @oliversw5 

[oliversw5]

26 minutes ago, shortstack said:

Fair point @oliversw5 

I am building a business doing this myself...

I have bought and sold from a 1/20 to a kilo in silver. 

Anyone who repeats the mantra you will sell at spot, neither has the knowledge or skill set to make money out of this asset class other than luck. To make money you need to 'hustle' for want of a better word. Don't worry about the premiums, have four strategies in mind. 1) buy strong series when they come put and sit on them. 2) See what the benchmark is and beat it with postage in mind...my favourite tactic is to befriend small dealers around the world as different markets value coins differently. By dealing with small dealers you have more room to negotiate a good price as people do business with their friends and also small dealers are price takers rather than price givers. 3) build a core stack that revolves around spot. I sell for spot times 1.3 plus post(for my basic range), I am probably the cheapest guy on the market for coins when people are buying small amounts. Finally 4) diversify into other sizes, this is where you should be making more mark up as the coins are more specialist.

I will finish the year up with 2k ounces (most probably), now I understand I have more scope when buying and selling and I certainly have more options when times are slow. But eventually everyone who continues stacking will get to the stage where they are self-sufficient. Buying is a real skill and its something you will get better and better at. Selling is simple, you will be a price taker and will have to work to the bar set (which is usually eBay). What you need to understand is that your coins will have a spectrum in regards of time, consider it like baking. Some coins you can sell straight away, others need some time to cook and others need time to grow. So I propose this, forget about premium. Consider your strategies on buying and time, they are the ingredients you need to succeed.

[shortstack]

Fantastic advice @oliversw5 and thank you for sharing this fascinating insight into how you're doing it successfully 

You talk a lot of sense and yes I have an awful lot to learn but I'm keen to take all the good help and advice I can 

It would be easy for me to buy junk coin for spot or below and build a quick mass (and the es nothing wrong with that at all) however id like to have some fun along the way and buy what interets me or is aesthetically pleasing (thus becoming a hobby and an investment)

EBay I'll admit scares me for the fake coin issues and of course my very limited knowledge

I am a student of the art and try to soak up as much useful information as I can and snippets of advice from those who have and are succeeding are priceless to me - thanks again

SS

[oliversw5]

We all start somewhere, I have a leg up because my Master's is in international business where I specialised in strategy and culture. So this is fun and games to me. I got into coins because I like the idea that I can look at the coins I have, I can see my pile grow. I own coins ranging from simple maples to the 2004 kiwi coin in mint packaging, I don't even consider premium as its a false economy. As a lot of people know I prefer selling on facebook and I do get people offer me spot, I usually laugh at them and call them cheeky. The reason I can do that is because I understand that there is no fixed price for anything, the price is a spectrum from very liquid to not so liquid. If I sold at 14 quid a ounce, chances are Id sell 1000 ounces in a day. If I sold at 16.75 (my current price) some days Ill sell 100 ounces. You need to work out what sort of return you are willing to accept. I, myself want to make 10% this means I can stay below the VAT threshold and make 13 to 15k a year when I factor in gold. If you are happy making less you will sell quicker and vice versa.

As for your points about fakes, this comes with experience. silver you can look at it and should know (pandas especially). Gold for smaller amounts its very simple, is it thicker than it should be...copper you can spot a mile off. I don't even think they fill the bigger bars with tungsten since the price shot up, you best bet is to buy spot plus 3 or lower and have gold as a play on spot.

I find buying and selling just as much fun as owning the coins themselves, like I said the more you do it the better you will get at it. One last point, I don't know a dealer who hasn't sold for a loss at some point, its part of the game. 

[BackyardBullion]

2 minutes ago, oliversw5 said:

We all start somewhere, I have a leg up because my Master's is in international business where I specialised in strategy and culture. So this is fun and games to me. I got into coins because I like the idea that I can look at the coins I have, I can see my pile grow. I own coins ranging from simple maples to the 2004 kiwi coin in mint packaging, I don't even consider premium as its a false economy. As a lot of people know I prefer selling on facebook and I do get people offer me spot, I usually laugh at them and call them cheeky. The reason I can do that is because I understand that there is no fixed price for anything, the price is a spectrum from very liquid to not so liquid. If I sold at 14 quid a ounce, chances are Id sell 1000 ounces in a day. If I sold at 16.75 (my current price) some days Ill sell 100 ounces. You need to work out what sort of return you are willing to accept. I, myself want to make 10% this means I can stay below the VAT threshold and make 13 to 15k a year when I factor in gold. If you are happy making less you will sell quicker and vice versa.

As for your points about fakes, this comes with experience. silver you can look at it and should know (pandas especially). Gold for smaller amounts its very simple, is it thicker than it should be...copper you can spot a mile off. I don't even think they fill the bigger bars with tungsten since the price shot up, you best bet is to buy spot plus 3 or lower and have gold as a play on spot.

I find buying and selling just as much fun as owning the coins themselves, like I said the more you do it the better you will get at it. One last point, I don't know a dealer who hasn't sold for a loss at some point, its part of the game. 

What about VAT? If you sell 100 Oz a day at £16.75 you would turnover £400,000+ a year.

I presume you are also going to declare this as income on your self assessment, or as a capital gain

[oliversw5]

3 minutes ago, BackyardBullion said:

What about VAT? If you sell 100 Oz a day at £16.75 you would turnover £400,000+ a year.

I presume you are also going to declare this as income on your self assessment, or as a capital gain

The point has gone over your head. I've already addressed this point several times. Yet again this is not about me, it's advice for someone who wants to earn some extra income, speaking of which I do have an accountant and do pay income tax on my profits..

[shortstack]

You'e a very well educated man in the field @oliversw5 and it' obvious you have a passion for it.

I think your setting your profit margin is a very wise idea that way everything has a price relevant to your initial outlay (probably basic economic or business practice) but as I have no formal education in the field very helpful and straight forward

Thus rendering premiums void using your strategy - I like that idea

I think I'll study more on fundamental business practice as underpinning knowledge 

It must be nice to see something you enjoy and studied for become a tool to gain wealth and the figures you mention are something I can only aspire to someday 

[BackyardBullion]

@oliversw5

But if you make 10% margins and are earning £14,000 profit per year that means £140,000 turnover...well above the threshold for VAT. Even if gold is not VAT'able do you not need to register regardless...

There are also a lot of rules about selling investment gold, I have been researching it quite a bit.

https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-notice-70121-gold#exemption-for-investment-gold

Just curious as to the approach you are taking is all.

[oliversw5]

I park the bus on silver at the threshold and only sell vat exempt (not 0% gold). If it was 0% vat it would go on the vat figure thus meaning I'd have to register for vat. This is what my accountant has said, I'm no expert on tax law but this is what I have been told so I am inclined to carry on. Now if it turns out he is in fact wrong. Firstly I'll sack him but more importantly I'd change my strategy to higher yielding coins or just go the vat route. There are several dealers that have done it and done it very well.

[BackyardBullion]

4 minutes ago, oliversw5 said:

I park the bus on silver at the threshold and only sell vat exempt (not 0% gold). If it was 0% vat it would go on the vat figure thus meaning I'd have to register for vat. This is what my accountant has said, I'm no expert on tax law but this is what I have been told so I am inclined to carry on. Now if it turns out he is in fact wrong. Firstly I'll sack him but more importantly I'd change my strategy to higher yielding coins or just go the vat route. There are several dealers that have done it and done it very well.

Sounds like a pretty good idea. With my hand poured silver I am not at the VAT threshold yet but if things keep growing at the 2017 rate then I may have to make some interesting decisions in 2018 like pouring a bunch of gold perhaps!

As far as I am aware the VAT threshold is for a rolling 12 month period so I can imagine like me you have a pretty in depth record keeping spreadsheet or the like! 

But I have to say, hats off to you my friend because it is not a game without a considerable amount of time and effort to sell and make decent returns on coins! But for those wanting to get into it it is as Oliver says a really rewarding and fun way to learn the ropes of business and make a bit of extra cash along the way!

[oliversw5]

15 minutes ago, BackyardBullion said:

Sounds like a pretty good idea. With my hand poured silver I am not at the VAT threshold yet but if things keep growing at the 2017 rate then I may have to make some interesting decisions in 2018 like pouring a bunch of gold perhaps!

As far as I am aware the VAT threshold is for a rolling 12 month period so I can imagine like me you have a pretty in depth record keeping spreadsheet or the like! 

But I have to say, hats off to you my friend because it is not a game without a considerable amount of time and effort to sell and make decent returns on coins! But for those wanting to get into it it is as Oliver says a really rewarding and fun way to learn the ropes of business and make a bit of extra cash along the way!

I think a lot of people see VAT as the be all and end all, but in reality it doesnt have to be the case, it does add legitimacy to your company and to wider public. Lets forget social media and the silver forum, the vast majority of people will pay VAT for their coins, so the transition is probably not as bad as you would think. My understanding of it is that you would have to have the gold assayed for it to be considered investment gold which kind of defeats the point in your case. The strategy I would take if I was in your shoes would be to increase margin via add ons. Not only make high quality products but also package them in a way that screams quality. That way you stay under the threshold but can squeeze more margin. 

Yes it is a 12 month rolling period, it has given me headaches. My best month was around 24k in sales, now that is split between gold and silver which gets separated at source. The admin work is a job in itself. Saying that it is rewarding and Ive only added to my stock from my profits...that way to solve what some people struggle with. I have an asset that in the long run should beat the market but I also enjoy the comforts of compounding my constantly flipping. Its a win win. 

Going back to the OP, we all start somewhere and you don't have to be a dealer to make money, you just have to be savvy and anyone who is willing to learn can do it. I set myself the target of 6000 for the year, Ive more than doubled that but more important than the money. I have met some fantastic like minded people along the way.

[utoh123]

Yes. Size is important. Do not buy larger then 10 oz bars.   They are easy to store- but will be hard to cash in later.  Do not go lower then a junk silver dime. The grams are over priced and cumbersome.

Ideally you want a mix.  Over the years I been doing this- one mode is in fashion- the other isnt- then the next year the popularity flips 

[KDave]

EBay is a great platform to sell silver on and get prices equivalent or slightly less than what a dealer will sell at, depending on what you are selling. The big dealers will sell on there at pretty high prices factoring in fees and reliant on their name to sell I assume, making it easy to undercut them and achieve near enough dealers prices on silver. 

[oliversw5]

18 minutes ago, KDave said:

EBay is a great platform to sell silver on and get prices equivalent or slightly less than what a dealer will sell at, depending on what you are selling. The big dealers will sell on there at pretty high prices factoring in fees and reliant on their name to sell I assume, making it easy to undercut them and achieve near enough dealers prices on silver. 

I dont disagree with that. eBay is a fantastic tool for most people. regardless of the fees

I don't use ebay for two reasons. Firstly, I started selling when my mother was ill and for me it was more about connecting with people which I can't do on eBay, I never thought I would sell so much and actually  had intentions of working in the city after my degree. Also I came at this with the idea that I wanted to do it with certain morals, so whilst I can earn more (I probably will charge slightly more due to having more costs now) I came at it from the mind of an investor. I want the people I sell to to have a fighting chance of making money on the coins they bought in the middle to long run. 

I actually did a trial with eBay. I made more in terms of percentage but reasons above it simply wasn't for me. 

[KDave]

Very admirable approach to selling but you are running a business with a reputation to consider and want repeat custom and not to be known as a dick turpin 

As an investor buying high selling low or whatever it is, I just want to achieve a good price when I sell. I must say that silver is always more effort to sell regardless of size it's the nature of getting the most out of the investment. 

[vand]

Larger coins will always be more illiquid., but IMO it's not a bad thing at all to diversify with some larger weight coins; it keeps the stack more interesting. I have a good selection of 1.5oz, 2oz, 5oz and 10oz coins and like them all, but mainly for their silver content, not for their particular individual weight!

 

[shortstack]

Cheers @vand very useful information ?

[ilovesilverireallydo]

On 20/11/2017 at 22:28, BackyardBullion said:

Sounds like a pretty good idea. With my hand poured silver I am not at the VAT threshold yet but if things keep growing at the 2017 rate then I may have to make some interesting decisions in 2018 like pouring a bunch of gold perhaps!

 

In theory you *could* run two companies. Call one BYB and the other one BackYardBullion. Your accountancy bill goes up of course, however if each co is trading below your VAT threshold then you dont have to pay it or register for it. VAT is per company. Just make sure there is a valid reason to really create the second business, and that it holds up on its own merits. The key as I see it you are already running three businesses. 

1. Your eBay business
2. Your website business
3. Your forum hustle. 

In their own rights the customers, margins, processes are all different. I would split off the Forum business and bundle the other two together. Then keep clear separate records of customers, dont cross promote the site or ebay on the forum, or create a cheap (£100-200 should do it) website to represent the forum hustle and the forum members only offers if you do want to showcase. 

Let each business have its own logo / marks and assay registrations. 

*I am no accountant - speak to one before you take this advice at face value. 

[BackyardBullion]

1 hour ago, ilovesilverireallydo said:

In theory you *could* run two companies. Call one BYB and the other one BackYardBullion. Your accountancy bill goes up of course, however if each co is trading below your VAT threshold then you dont have to pay it or register for it. VAT is per company. Just make sure there is a valid reason to really create the second business, and that it holds up on its own merits. The key as I see it you are already running three businesses. 

1. Your eBay business
2. Your website business
3. Your forum hustle. 

In their own rights the customers, margins, processes are all different. I would split off the Forum business and bundle the other two together. Then keep clear separate records of customers, dont cross promote the site or ebay on the forum, or create a cheap (£100-200 should do it) website to represent the forum hustle and the forum members only offers if you do want to showcase. 

Let each business have its own logo / marks and assay registrations. 

*I am no accountant - speak to one before you take this advice at face value. 

That sounds morally grey and also a hell of a lot of hard work!

I may be forced to register for VAT at some point simply because of Brexit. If we can no-longer source VAT free (or at least greatly reduced) silver from Europe then registering for VAT will allow me to claim it back on all of my material stock. Of course I would have to charge VAT for sales which will increase prices or hit my margins, but only on goods sold in the UK. International customers would not be affected. 

Only time will tell!

[ilovesilverireallydo]

1 hour ago, BackyardBullion said:

That sounds morally grey and also a hell of a lot of hard work!

 

like I said - it depends if there is a legitimate reason. If there isnt then agreed it may be too much work .

Also - you sometimes sell secondhand silver - this can go under the margins VAT scheme which is cheaper. 

[BackyardBullion]

Just now, ilovesilverireallydo said:

like I said - it depends if there is a legitimate reason. If there isnt then agreed it may be too much work .

Also - you sometimes sell secondhand silver - this can go under the margins VAT scheme which is cheaper. 

Other than avoiding VAT I cannot see any reason to be honest. 

I do currently work as a self employed business consultant as a side job - which is of course very different to BYB stuff - so you can justify there why there are two separate entities. 

I am not worried about breaking the threshold at the moment - if I got to a point where I was going to break it I would probably just start pouring some gold. On the other hand if I was close to the threshold then I would be a happy man as it means I am doing well!