Jon R. Warren
Many sellers think they should get the actual silver price for their sterling silver medal or ingot collections. Unfortunately, the economics of this business do not work that way. Please let me respectfully explain a few things that many novice sellers are unaware of:
1) Sterling silver is not pure silver. The "silver price" in the newspaper is for pure silver. Sterling is 92% - so buyers must deduct for this fact. Most limited edition medals sets by Franklin Mint, Danbury Mint and others are made from sterling silver, not 999 pure silver. Of course, for sets made of 999 pure silver, no deduction is made.
2) Many people think they have more weight than they actually do - an ounce of silver is a troy ounce, which contains 31.1 grams. If one weighs a set on a bathroom or kitchen scale, the weight one gets is a "standard" ounce, or 28.5 grams. This makes a 10% over count in the weight. This is a common mistake novice sellers make all the time.
3) There is no place one can take an ounce of silver and get "the silver price". You can NOT get the silver price from your local bank. There is no legal right for the owner to get at least the "silver price" when selling silver. The so-called silver price printed in the newspaper and online is the price for the most recent COMEX futures contract from the Chicago Commodities Exchange Silver Futures Contract. A silver contract on the Comex is 5000 ounces of pure silver. One must have 5000 ounces of PURE in order to expect the "silver price." Even then, one must deliver the 5000 ounces of pure to the floor of COMEX in Chicago before the expiration date of the contract in order to get the so-called "spot" price. So, to be clear, no one but the largest commodities firms in the world actually realize the so-called "melt price" of silver. It is a common misconception.
4) Many sellers think that there must be a "collector premium" attached to limited edition medals sets, or a numismatic value. We get this from sellers all too often (daily). Nothing could be further from reality. But don't take the word of an online article. Prove it to yourself. Look at the COMPLETED AUCTIONS on ebay for Franklin Mint silver (using the ADVANCED SEARCH link). You will see that in general the sets will sell for less than their silver value. And this price fetched on eBay does not reflect the 20% that eBay takes in fees and commissions. If you get 95% of the silver value on eBay, you will only deposit 75% of the silver value into your bank account after eBay takes their fees. These sets are very common and no one pays any kind of "antique" or "numismatic" premium for them. We are a top buyer on eBay and buy many sets every month at well below silver value.
5) Dealers must make a profit in order to stay in business and compensate themselves for their time. With eBay and other online marketplaces taking as much as 20% commission for use of their marketplace, dealers must calculate these costs into their inventory purchases. Most dealers resell on eBay. We do not, we have a 30 year list of contacts with whom we deal. That's one reason we are able to pay more than other dealers.
I hope this brief tutorial helps clear up some of the confusion sellers often have when calculating the fair market value of their silver collections.
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Last read on 4/23/2017 1:22:41 PM
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