Starting a business is not an easy one, as it takes a lot of thinking and planning. Finding an excellent idea and right business is a daunting task. First list out the different options of business ideas and choose one from it. In this article, we will explore the process of starting a scrap gold business and the process to make huge profits with a scrap gold business.
- What is Scrap Gold Business mean?
- How to buy a scrap gold?
- How to start a scrap gold business?
- Turning Your Scrap Gold to Cash:
- Points You Have to Know While Purchasing Scrap Gold:
- How to Start Your Own Business Buying And Selling Gold
- How Much Profit Does a Gold Business Make?
- Is Buying Scrap Gold Profitable?
- Is Gold Business Lucrative?
- How Can I Make The Most Money Out of Gold?
- How do Jewelers Make Profit?
- Is Jewelry Making Profitable?
- What is The Profit Margin on Jewelry?
- What is The Average Markup on Gold Jewelry?
- Do Gold Necklaces Hold Value?
- Can I Sell my Gold to a Bank?
- 10 Profitable Gold Business Opportunities?
- Types of Gold Business
- How to Buy And Sell Gold For Profit
- Gold Business Format
- How to Start a Precious Metals Business
- How to Buy And Sell Gold Jewelry For Profit
- Cash to Gold Business Model
- How to Start a Cash For Gold Business
What is Scrap Gold Business mean?
Selling the scrap gold has become a popular activity as the price and value of the gold has risen. Some individuals sell only the damaged gold jewellery which they have on hand, while the other people make money on buying the scrap gold at a low rate and selling it back for a high price elsewhere. “Scrap Gold” means it is just gold, when we call it scrap it simply requires some energy and time to recover.
Read Also: How You Can Make Money with Patchwork
Thus Scrap Gold includes any piece of metal that is partly or entirely gold. Some of the common items sold as scrap gold includes
· Broken gold
· Gold coins
· Jewellery
· Gold wire
· Gold shot
· Gold dental bridges
· Bracelets and chains
· Gold crowns
· Gold earrings
· Gold solder
· Gold pins
· Gold Broaches and
· Gold watches
Buying scrap gold is a fast catching up business. Now a day’s people are more willing to sell their gold to a gold buyer than a pawn shopper or jeweler. There is a tremendous increase in the number of gold buyers and sellers each year.
Pawn shops and jewelers only give 50-60% and a gold buyer can give 70% which is beneficial to the customers. If you note, the value of the gold has only been increasing but never decreasing.
Usually gold transactions are done in pennyweights. If you don’t happen to have a scale for your scrap gold, you can still weigh it in this way, hold your gold in one hand and your pennies in another hand one at a time. When the hand holding the pennies weigh equal to the hand which hold your scrap gold, stop and count your pennies in the hand.
And then multiply your pennies by 1.5, thus this will give you an approximate weight of your scrap gold. Then the next thing is to find the current sport price of gold. Here prices are quoted in ounces. Divide that price by 20 which will give you the pennyweight.
Keep in mind that this is the price of pure gold (which is 24Karat gold). Thus each piece making scrap gold must have the number of karats marked on it somewhere
Karats:
Scrap gold is usually valued by its karat weight, where it is related to the percentage of gold in the price. High the number of karats contains a greater percentage of gold. Hence pure gold consists of 24K and the 12K is about 50 percent gold.
Condition:
The condition for scrap gold really doesn’t matter. The Gold which is worn, scratched, and dirty or broken which can be melted down by refiners and made into a new ring, bar, coin or tooth.
WARNINGS:
Some of the scrap gold includes gemstones. If you are planning to sell your scrap gold make sure that you first remove the stones.
Scrap Gold prices:
The prices of the gold changes every day and reflects the live spot gold price in your country. Prices of the scrap gold vary between dealers and sellers and are advised to shop around for the best price. The amount offered for the scrap gold varies based on how much the gold are in the item and the price of gold that day and the scrap gold dealer’s fees. Hence the price offered on a piece of scrap gold will not reflect your retail price of the item.
How to buy a scrap gold?
1. If you are looking to buy a scrap gold, it is very easy. Just ask all the peoples whom you know if they have any gold and they want to sell them out to someone. Communicate your desires and wants before buying a scrap gold. Eventually you will find someone who wants to sell you their gold. If you want to do this multiple times, then it requires some planning and finesse and lot.
2. Next learn the value of scrap gold which is easy to figure out. Take the spot price of gold and divide this by 20 to get penny weights and then multiply this number time the purity level and you have the value of the gold.
3. Advertising is an important part. This depends if you are going in alone or if you are to become a broker with a company and purchase it on their behalf. Some of the marketing ideas includes you can try for free methods like
· Online marketing
· Blogs etc, and paid for like
· Print ads
· Online
· Radio and
· TV
For any business this is the biggest part and it costs more money.
How to start a scrap gold business?
=> Structure and establish a business legally. To get advantage of tax benefits and to protect yourself from potential litigation, form a corporation or LIC. Or you can either hire a certified public accountant or attorney to assist you with this process.
=> Obtaining a federal tax ID number from the IRS. A federal tax ID number, which is also known as an employer identification number, allows you to open a business checking account and identifies your business and establishes business credit. Visit IRS.gov to print out Form SS-4 to mail in, or to obtain your federal tax ID number or to contact an IRS agent over the phone to obtain your tax ID number.
=> Next determine if you want to operate online or offline business. Locate a property to purchase or lease for your business if you choose to have a storefront (a real estate agent can assist you for this). Or else, hire a freelance Web designer to design your website.
=> Purchase the equipment in order to determine the purity of the gold and silver which your customers will attempt to sell you. You can even buy any industry-specific electronic products in order to determine the purity and density of gold and silver.
=> Find a refinery to work with. After you purchase scrap gold, you’ll then sell these materials to a refinery, which will take your scrap metal and melt it down into coins or other items.
=> Advertise your business. Mostly, people who are in need of cash will visit pawnshops and cash-advance stores. Place some persons or fliers in areas close to your business locations, as well as in nearby supermarkets. Create your own website to advertise your business even if you have a physical shop or storefront.
Turning Your Scrap Gold to Cash:
Have you ever been taken a look in your jewellery box and found some scrap gold which are of no use? Have you done anything with those scrap? Never think of throwing them away, since these “you-thought-were-junks” have some value too. Scrap gold can also be sold for cash. You believe it or not but they are actually worth more than what you thought.
Discarded gold which includes your broken gold, gold coins, jewellery, gold wire, gold shot, gold dental bridges, bracelets and chains, gold crowns, gold earrings, gold pins, gold broaches and gold watches etc. are still valuable. You can actually sell those at a higher price than you expected. There was a mother who wanted to give a special birthday party to his son but she is in a short of money.
What she actually did was look into her jewellery box and found scrap gold. She collected them, send it to online cash for some gold companies and to her surprise, she had received a huge amount of money more than she expected. She not only throws a big birthday party to her son but also she brought him a bicycle as a birthday present.
Stories like these happen in most of their real life. For a beginning, it is just a surplus scrap gold but then it can also be useful if you exchange it to cash than any other resource. Just imagine how much you will be able to earn if you sell some of yours scrap gold like this. There are so many things that we can be benefitted from scrap gold.
Of course, the cash value is very helpful one. It can be used to buy food and groceries. You can even use some of your cash to pay your bills. Or you can also use the cash you got from scrap gold to pay your long-time debts. Thus If you have more scrap gold then, you will receive much cash.
Most of them would even consider buying and selling of these scrap gold as a business. They actually invest in buying scrap from anybody and from anywhere then when they have actually collected enough, they will sell this at a much higher price as a bulk.
The income is really good in this kind of business as long as you are expert in scrutinizing pure gold and you are very well experienced in business dealings. We can even make it as a hobby of collecting scrap gold and become richer in the end.
Points You Have to Know While Purchasing Scrap Gold:
· Firstly ask your insurance agent about the specific coverage for your scrap gold. Make sure that the policy you select mush has an endorsement to cover the scrap gold you purchase from customers and understand how the insurance companies value your scrap gold and also make sure what documents you needed so that you get paid if a loss occurs.
· Most of the jewellers mutual have developed a scrap gold worksheet which helps you to track purchases of scrap gold. This tool will help you when you are a jewellers mutual policyholder in order to record and document the information needed to insure your scrap gold with the current market prices.
· If you are going to purchase a scrap gold make sure that you comply with federal, local and state requirements.
· Other requirements such as
Shipping scrap metals
In-safe/out-of-safe limit
Peak season coverage
Cash
Hence becoming a scrap gold buyer is not a very difficult. Actually it doesn’t need any educational qualifications or training. You only need to invest your common sense and time. Choosing a right refinery to sell scrap gold is a very important task. It is a very good idea to consider a refinery. Before selecting a refinery, make sure that you visit their office and check out their recourses. The refinery cost should not be more than the 5%.
Next stone tweezers are very helpful where your customer only wants to part with her gold but not with the stones in the ornaments. Most of the gold buyers have just lost their customers just because they do not have equipment to remove stones and other precious gems from the jewellery.
Making people aware of your business by advertising your business is a very important job. Make sure that you have as many parties as possible. Most of the buyers make huge profits in gold parties.
An average customer has about $300 of gold and even if you pay 65-70% you will make $100 before paying to the refinery. Thus by considering a party of 10, you can easily earn up to $1000 in just a few hours!
When preparing to sell or buy a gold do it for a profit, make sure you deal only with reputed and established companies. Most of the good companies have a website with a gold calculator so that you will have a rough estimate on how much profit you will make; most of the best companies can also offer a price guarantee…
Always have a track on the market conditions and the other details about gold, as the value of gold keeps changing everyday and thus you need to be updated properly. Proper information and knowledge will save you a lot of money and make you huge profits with your scrap gold business.
Thus scrapping gold will provide you many benefits for and there are many ways to gain income from this job too. You can start up your own scrap gold business and become a successful business owner in the market and earn huge profits these days.
How to Start Your Own Business Buying And Selling Gold
Buying and selling gold is a good investment with an attractive profit, and the most interesting part is that you can trade gold from home. If you want to start a business buying and selling gold, below are some few steps to take-:
1. Register your business
The first recommended step to take when planning to start your gold business is to register your business and obtain all necessary business licenses that may be required to trade in gold. You may consider registering your business as a Limited Liability Company so that you can protect your personal assets from any business liability.
2. Decide on the kinds of Gold you would be buying and selling
You should also make up your mind on the kinds of gold you want to be dealing in. Do you want to be buying outdated jewelries or broken jewelries, so that you can refine and resell? Wedding bands or brand new gold jewelry for resale, or would you rather deal in raw gold? Below are few niches within the gold trading business, that you can start today.
- Buying and Selling of Gold Coins
- Buying and Selling of Jewelry sales
- Trading on Broken / used jewelry sales
- Buying and Selling Scrap Gold
3. Learn about new trends in the business
The gold business goes beyond buying and selling gold.There are new trends in the business that you can also take advantage of. For instance, you can go into selling gold-plated items such as cellphones and tablet computers or even luxury wine bottles.
You can even get people who want to customize their phones or design their clothes with gold. All these are business opportunities you can look into.
4. Learn about gold valuation
Gold business is not a business that you can enter into as a novice. To be a successful gold trader, you must know how to measure and weigh the purity of gold, prior to buying it. You must know how to identify original genuine gold and how to determine the value and prices of every piece at any point in time.
There is a standard guide to appraise gold coins while gold jewelry shall be valued with its fineness. There are standard tables to determine the amount of gold in each piece and its value in the market.
Once you know of its value and you feel you can profit from it, buy it. You should also be aware that the prices of gold fluctuate a lot, so you must know the best times to buy and sell. If you buy wholesale, you can get gold at a cheaper cost and be able to sell it at a higher selling price.
5. Determine who the buyers of your gold would be
You must also be able to decide on the people who would buy your gold. Examine the market to see where demand for gold comes from and who your competitors are selling to. You can also form an alliance with jewelry shops in your area so that you can supply them gold which they can also sell for a profit. You could also look out for gold wholesalers who would buy them in bulk from you.
6. Develop a business plan
Plan your business carefully and decide on how you are going to run your business and how you are going to expand the business in the future.
7. Purchase all the necessary equipment
You should also purchase all the necessary equipment needed to start the business and even some few pieces of gold to start with. With about $500 capital, you can conveniently start a small gold buying and selling business.
8. Look for sources to buy gold from
One very important part of this business is how and where you would get your gold from. You may decide to set up an office where people who need to sell their personal gold jewelries can walk in and sell their gold to you which you would buy at a discounted price, so that you can sell at a profit later.
You may also look for people who deal in selling of raw gold and start buying from them although this process is more technical than the former.
How Much Profit Does a Gold Business Make?
Well, there a two types of gold dealer: those that stock inventory and ship “in-house,” and those that broker sales and drop-ship from larger wholesalers. Some operate hybrid operations, stocking some products, and drop shipping others.
For the dealers holding inventory, almost all “hedge” their inventory in the markets. If buying gold is the same as taking a “long” position, then by “shorting” gold in the market (e.g. betting the price will decrease) dealers are protected regardless which direction the gold price moves.
For example, if the gold price increases $50, the dealer will make an additional $50 on the sale to the customer, while at the same time losing $50 on his short position. Conversely, if the price decreases $50, the dealer will lose money on the sale to the customer, but make it back on his short position.
Gold brokers are unaffected by the spot price at all, because the spot price they charge to the customer is roughly identical to the spot price they buy from the wholesaler. In this way, they essentially pass along hedging responsibility to the wholesaler, while making money on the premium.
In either case, the system is not fool proof. Since the vast majority of dealers “lock-in” the customer to a price before the customer pays, dealers who have unhedged their position, and brokers who have locked in with wholesalers, are exposed to price fluctuations in the event that the customer decides not to pay.
Unfortunately, many investors think buying bullion is no different than buying a book online; that the vendor is in no way impacted for an order cancellation. On the contrary, a non-paying customer poses a serious problem for dealers. A “simple” order cancellation might cost a dealer thousands of dollars.
Is Buying Scrap Gold Profitable?
You can make good of money when you start a scrap gold-buying business, but it carries some risks. Your business can be as large or small as you want, and you can still make money with one gold-buying event per month. You may want to stick with a fast turnaround unless you want to keep the gold and risk your investment on this bumpy ride.
Gold buying is a cash business, and it takes plenty of it to get started. Considering gold prices stayed at the $1,000 per ounce range in 2013 and 2014, you’ll need to keep thousands of dollars on hand.
Carrying this much cash also necessitates security and staying with customers you know and trust. Unless you plan your gold-buying business for quick turnover, you can ride the volatile gold prices and make even more money or lose much of your investment.
Is Gold Business Lucrative?
Gold business is so lucrative that you can start with small capital and earn huge profits in return. Trading in gold commodities in the commodities market is even more profitable as you get to sell your gold when the price goes higher, making you trade at a steady profit.
How Can I Make The Most Money Out of Gold?
Dealers make their money on the “premium,” the amount charged over the spot price. For a US Mint Gold Eagle, you may pay a premium of $60 above the spot price of gold. But before you assume that a gold dealer makes $60 per coin, you must also consider that dealers do not buy these coins at the spot price either.
It costs money to melt, refine, and mint gold into a beautiful gold coin, so institutions like the United States Mint charge a 3% premium for Gold Eagles to their authorized wholesalers, of which there are only about a dozen.
The 4,000+ dealers throughout the United States must then purchase these Gold Eagles from these distributors at a premium. Therefore, the gold coin you purchase from a dealer may actually cost the dealer $40-$45 over the spot price.
As strange as it may seem, for a purchase of ten gold coins with a dollar value of $14,500, a gold dealer may profit only $100-$150, or right around 1%.
How do Jewelers Make Profit?
Generally, jewelers buy gold/ready-made ornaments in bulk and at the current market rate in the form of gold-bars. They stock this gold and sell at a time when the prices have increased. Normally, gold rates increase and they make money selling it to you at a higher current gold rate than what they purchased it for.
Note that by selling above the predetermined amount, a jeweler can earn a considerable income. The only way to get a better deal is to negotiate with the owners of the jewelry. You need to show them results but if you are a performer, they will be willing to give you a better commission. Aside the above mentioned revenue stream, there are other ways jewellers make money.
Charges for Gold/ Diamonds/ other Precious Stones
Note that this is the price and quantity of the actual gold/diamond/other precious stones used in the jewelry. It is calculated based on the gold price prevalent on the date of purchase multiplied by the weight of gold you’re buying.
Making Charges
This is actually the charge of converting gold into jewelry. It includes the cost of other materials used in making the jewellery as well as the labour charges. Note that this charge tends to vary from jeweller to jeweller, and is not fixed. It can be a flat rate per gram or percentage based. This is the charge where most of the jewelers fool you and charge exorbitantly. Also, this is where you can negotiate.
Wastage Charges
While making jewelry, jewelers claim that some of the gold is wasted in the process. Howbeit, this cost is transferred to the customer, and just like making charges, even this varies with every jeweler and is also the area where your jeweler can charge extra since there is no proof as to how much of gold was actually wasted.
Also note that this is generally charged on a percentage basis. Some jewelers may not even charge this and rather include the same in making charges, by charging the same at a higher rate.
VAT
This is a mandatory tax levied by the government on the sale of gold. It is calculated on the total of the price of gold, making charge and wastage charge. It is non-negotiable.
Is Jewelry Making Profitable?
As competitive as the jewellery industry might be, opportunities to make a profitable jewellery-making business certainly still exist.
In fact, the industry remains so profitable that a business intelligence group reported that the industry, unlike most, didn’t even falter during the recession. What’s more, it has also maintained consistent growth during the last five years and grew by 3.4% in 2014 alone.
Not only is the jewellery industry attractive for its profit potential, though. It’s also a business that enables artisans and designers to pursue their entrepreneurial interests whilst continuing to channel their creativity.
With such a broad range of options to choose from when creating a jewellery brand, like fine jewellery, custom products and handmade crafts, artisans are better able to develop a business model that best suits their personal interests.
What is The Profit Margin on Jewelry?
The profit margins for jewelry makers and sellers can vary widely, particularly given the numerous categories within this industry. Fine jewelers who either make their own products or source their pieces from wholesalers will have different considerations than those who sell costume or fashion jewelry. Labor costs, as well as market prices for precious metals, have a significant impact on what a jewelry entrepreneur can expect to earn.
According to analysts at the Retail Owners Institute, the gross margin percent trends for jewelry businesses have stayed relatively consistent in recent years. Gross profit margin is calculated by subtracting the cost of goods from a business’s revenues. In 2013, the gross profit margin for jewelry stores was 43.5 percent. In 2017, it was 42.6 percent.
Jewelry sellers who operate retail stores or stalls at fairs and craft shows will have to consider other factors when pricing jewelry. There is always the risk of loss due to shoplifting and employee pilferage. In addition, products can be damaged through careless handling.
Fine jewelers often provide free minor repairs and alterations to jewelry sold, and the cost of offering these services should also be calculated in the product’s final price.
What is The Average Markup on Gold Jewelry?
GoldSilver.com sells gold and silver bars and coins, as well as 22- and 24-karat gold jewelry. The precious-metals retailer offers gold pieces from its own line of jewelry as well from New York-based Auvere, which creates and sells high-karat gold jewelry online.
“If you’re going to buy jewelry as an investment, be sure it’s something you’d enjoy keeping and potentially wearing,” said Adam Koos, president and portfolio manager at Libertas Wealth Management Group. “Worst case, if you can’t unload it, you’ve got something you can enjoy.”
He said commissions and fees on jewelry can be high. If you end up overpaying for a piece of jewelry? “Good luck cutting for a break-even,” Koos said.
Menē, which sells exclusively online, has an average markup of 20% over the precious metal weight, so a $200 ring has $160 worth of precious metal, according to Roy Sebag, co-founder and chief executive officer of Menē.
The average markup at GoldSilver.com stands at roughly 35%, said company president Alex Daley. Markups for gold jewelry on eBay EBAY, +1.98% and retail stores vary widely, with premiums anywhere from double to three times or more over the metal’s value.
If you decide to sell your jewelry, Menē will buy it back at the real-time value, less its 10% buyback fee, then melt it to make new jewelry. GoldSilver.com will offer a price close to the value of the pure metal in your jewelry, and sell it to a gold refiner who will melt it into bullion.
If the company you purchase jewelry from doesn’t offer a buyback option, you can calculate gold scrap value using websites such as Goldcalc.com or Meltvalue.com, by entering the weight and purity of the metal.
There are laws regulating the purity stamp on the metal, but a testing kit can help you verify purity. Of course, the jewelry may have value beyond the price of the precious metal in both its design and the quality of the gems, so it’s best to get an appraisal by a reputable jeweler.
Do Gold Necklaces Hold Value?
Gold chains are products of gold that can either be made from pure gold or combined with other materials. Provided gold chains have karats of 14k or higher, they tend to become more valuable. This is because gold is easily malleable. Several reasons make gold chains worthwhile compared to other precious metals available today.
Generally, gold chains are priced based on karats, whereby higher karats make this gold jewelry more valuable. Furthermore, even when prices fluctuate, they still retain their worth. That said, here are reasons why gold chains hold their value;
- Relatively scarce resource: Gold is often available in low concentrations over a wide area or deep in the earth’s crust. Thus, its extraction becomes more complex, making it a rare metal and more valuable than readily available metallic elements.
- High production costs: Extraction, refining, and other associated practices in gold production are costly and time-consuming. This makes its sale and resale cost relatively higher, giving it a characteristic of being among the highly sought worldwide.
- Unique physical properties: Unlike most metals, gold chains include special features such as biocompatibility, catalytic properties, corrosion resistance, and conducts electricity. This makes them one of the most high-priced metals on earth and more valuable in history.
Can I Sell my Gold to a Bank?
The answer to the above question will depend on where you live. A lot of banks in the US sell gold coins but they would not usually publish information about it on their websites or advertise it openly for security reasons.
Banks like HSBC and Leader Bank sell gold coins but to get a comprehensive list of banks that sell gold coins in your location, visit the website of the US mint, and use their authorized dealer locator to find banks that sell gold coins around you.
You can also call your bank and ask them if they sell gold coins. Many banks would not openly advertise the fact that they sell gold coins but if you call them, they would readily offer you helpful information on how to buy gold coins from them.
Just like it was stated above, in some countries it is quite common to buy gold coins from banks; however in the US it is not the case. Federal Reserve does not deal with individual customers and only sells directly to banks.
In very rare cases, some banks might offer commemorative series gold or silver coins but this might take place only for very limited time periods. So, if you want to buy gold coins from a bank in the US, this will not be possible because most US banks will not sell gold bullion coins or bars to the public.
While most banks hold a portion of their securities in gold bullion bars, these are not for sale to the public. It may be possible to buy gold coins from a bank in Switzerland and some other countries but not in the United States.
To buy gold coins in the United States, you need to find reputable gold coin dealers in your area or online. Some good gold online dealers that have become popular in the recent years due to their impeccable reputation are GoldLine, APMEX Gold, Gold Price, Northwest Territorial Mint, Bullion Vault, Bullion Direct and many others.
Steps to Buy Gold Coins from Your Bank
a. Make Inquiries from Your Bank
The first step is to call your bank or send them an email to find out if they have gold coins for sale, and the steps you need to take to be able to purchase them.
b. Find out The Current Prices
Just as the price of currency fluctuates, the price of gold also fluctuates so you have to find out what the current price for the day is before you make your purchase. You can find out bullion coin prices for the day on the websites of the US Mint.
c. Purchase From Your Bank
Inform your bank about the quantity of coins you want to buy and find out what their payment policies are. Most of the time you can pay for gold coins using credit cards, checks, and money orders.
d. Obtain Your Coins and Certificate
After making payments, your bank will verify the purchase and hand you the coins you have purchased along with a certificate showing the value of the gold, the date of purchase, and the carat. Make sure you store your gold and the certificate in a safe place until you are ready to sell them.
10 Profitable Gold Business Opportunities?
Seeking to start a gold business but not quite sure what to start?
The good news is, there are so many opportunities to become an entrepreneur and build an innovative product/service in this line of work.
If you’re looking to start your own gold business, there are several amazing options you can choose from.We put a list together below of the most profitable gold business ideas you can start today!
Here they are:
The List
- 1. Start a blogging business ($60K/year)
- 2. Start an online gold dealing business
- 3. Become a gold researcher business
- 4. Start a gold safe keeping program business
- 5. Start a host gold forums business
- 6. Start an authorized gold purchasing business
- 7. Start a senior gold mining business
- 8. Start a host gold parties business
- 9. Start a direct gold ownership business
- 10. Start a drive-thru pawn shop business
- 11. Become a gold speculator business
- 12. Start a gold streamer business
- 13. Start a raw gold selling business
- 14. Start a gold reseller shop business
- 15. Start a gold exchange-traded funds business
- 16. Start a gold mining business
- 17. Start a local gold dealing business
- 18. Start a goldsmith business
- 19. Start a gold options trading business
- 20. Start a gold purification business
- 21. Start a gold plated jewelry making business
- 22. Start a host gold coin shows business
- 23. Start a gold coins collecting business
- 24. Start a gold casting business
- 25. Start a junior gold mining business
- 26. Start a gold teeth business
- 27. Start a gold flipper business
- 28. Start a jewelry inspection business
- 29. Start a gold test kit business
- 30. Start a gold bar business
Types of Gold Business
Investing in gold through ownership of the metal itself, mutual funds, or gold mining stock always earn the investor higher profits than investing in cash, because as the dollar falls, gold will inevitably rise.
The real potential for profits in the coming years and decades is not going to be found in the traditional American blue chip industry. The flexibility of gold has ensured its profitability even into the future. If you want to be part of the lucrative gold industry, here are ways you can invest in gold and make huge profits.
Direct ownership
Direct ownership of gold means an investor owns an entire gold bar or ingot in his/her full name. The big disadvantage to owning gold is that it tends to trade with a wide spread between bid and ask prices, so there is a tendency that one might not make so much profit from it.
However, gold is usually used to hold value, and since dollars are most likely to fall in value, gold is the best place to preserve value. The best forms for gold ownership are through minted coins like the South African Krugerrands, Canadian Maple Leafs, or American Eagles.
Gold exchange-traded funds
An exchange traded fund (ETF) is a type of mutual fund that trades on a stock exchange like an ordinary stock. ETF offers a practical way to hold gold in an investment portfolio. The ETF’s exact portfolio is fixed in advance and does not change. Gold ETFs provide investors with exposure to gold by tracking the price changes of gold. This allows investors to profit from gold price changes without having to own the physical asset.
Gold mutual funds
By definition, mutualized gold is a means to own gold alongside other investors (mutualization). This basically means that the same gold bar is owned by many investors, with each owning a part. For people who are hesitant to invest in physical gold, but still desire some exposure to the precious metal, gold mutual funds provide a helpful alternative. These funds hold portfolios of gold stocks.
Start a Junior gold mining company
A junior mining company is an exploration company that looks for new deposits of gold other precious minerals. These companies target properties that are believed to have significant potential for finding large mineral deposits. Junior exploration companies are a major source of future mine supply.
Their level of stock is more speculative. Junior stocks are less likely to own productive mines, as exploration provides higher potentials for profit but also with greater risk of loss. Capitalization is likely to be smaller than capitalization of the senior gold stocks.
This range of investments is for investors whose risk tolerance is broader, and who accept the possibility of gold-based losses in exchange for the potential for triple-digit gains. You can start a junior mining company and make a lot of profits.
Start senior gold mining company
A senior gold miner simply refers to the largest producers that have an established position, more liquidity, and therefore are considered to be the less risky of the gold producers.
The reason an investor would buy a senior gold mining stock is to leverage upside to the price of gold. In other words, when the price of gold rises, a senior gold miner would, in theory, outperform the gold price because it is increasing its gold production.
Become a gold streamer
Gold stocks are known to be quite risky, as not only can the price of gold impact returns, but other production issues can also affect the metal. Building a new gold mine is very costly and has been known to cause problems for even the largest of gold producers as overhead costs can swallow up all your profits.
This is basically why gold producers both small and large often turn to precious metal streaming companies to help them fund new mines. You can start a business as a gold streamer and help miners locate viable mines.
Trade in gold options and futures
The gold option is for the more sophisticated and experienced investor. It is a trading platform. An option gives the buyer the right, but not the obligation to buy (or sell) a certain asset at a specific price at any time during the life of the contract.
Buying gold options does require the payment of a premium before one can start trading. Options allow you to speculate in gold prices, and you can speculate on price movements either upwards or downwards. Buying options is risky, and more people lose than win, but if you have the experience and professionalism, you can test your prowess in this risky but profitable venture.
Become a gold flipper
Gold flipping is basically buying and selling gold for profit. Here you buy the gold when price drops and sell when it rises. Gold coins are the kinds of assets that appreciate in value over time. The older the coins get, the more valuable they become most especially if they are of a rare kind and still in mint condition. So what can be more enjoyably profitable than buying, collecting and selling gold and silver coins?
How to Buy And Sell Gold For Profit
Here are five different ways to own gold and a look at some of the risks that come with each.
1. Gold bullion
One of the more emotionally satisfying ways to own gold is to purchase it in bars or in coins. You’ll have the satisfaction of looking at it and touching it, but ownership has serious drawbacks, too, if you own more than just a little bit. One of the largest drawbacks is probably the need to safeguard the physical gold and insure it.
To make a profit, owners of physical gold are wholly reliant on the commodity’s price rising, in contrast to owners of a business, where the company can produce more gold and therefore more profit, driving their investment higher.
You can purchase gold bullion in a number of ways: through an online dealer such as APMEX or JM Bullion, or even a local dealer or collector. A pawn shop may also sell gold. Note gold’s spot price as you’re buying, so that you can make a fair deal. You may want to transact in bars rather than coins, because you’ll likely pay a price for a coin’s collector value rather than its gold content.
Risks: The biggest risk is that someone can physically take the gold from you, if you don’t keep your holdings protected. The second-biggest risk occurs if you need to sell your gold. It can be difficult to receive the full market value for your holdings, especially if they’re coins and you need the money quickly. So you may have to settle for selling your holdings for much less than they might otherwise command on a national market.
2. Gold futures
Gold futures are a good way to speculate on the price of gold rising (or falling), and you could even take physical delivery of gold, if you wanted, though that’s not what motivates speculators.
The biggest advantage of using futures to invest in gold is the immense amount of leverage that you can use. In other words, you can own a lot of gold futures for a relatively small sum of money. If gold futures move in the direction you think, you can make a lot of money very quickly.
Risks: The leverage for futures investors cuts both ways, however. If gold moves against you, you’ll be forced to put up substantial sums of money to maintain the contract or otherwise the broker will close the position. So while the futures market allows you to make a lot of money, you can lose it just as quickly.
In general, the futures market is for sophisticated investors, and you’ll need a broker that allows futures trading, and not all of the major brokers provide this service.
3. ETFs that own gold
If you don’t want the hassle of owning physical gold, then a great alternative is to buy an ETF that tracks the commodity. Three of the largest ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and Aberdeen Standard Physical Gold Shares ETF (SGOL).
The goals of ETFs such as these is to match the performance of gold minus the annual expense ratio. The expense ratios on the funds above are only 0.4 percent, 0.25 percent and 0.17 percent, respectively, as of July 2021.
The other big benefit to owning an ETF over bullion is that it’s more readily exchangeable for cash at the market price. You can trade the fund on any day the market is open for the going price. So gold ETFs are more liquid than physical gold, and you can trade them from the comfort of your home.
Risks: ETFs give you exposure to the price of gold, so if it rises or falls, the fund should perform similarly, again minus the cost of the fund itself. Like stocks, gold can be volatile sometimes, too.
While these ETFs own physical gold, they allow you to avoid the biggest risk of owning the physical commodity: the illiquidity and difficulty of obtaining full value for your holdings.
4. Mining stocks
Another way to take advantage of rising gold prices is to own the miners who produce the stuff.
In some ways this may be the best alternative for investors, because they can profit in more than one way on gold. First, if gold rises, the miner’s profits rise, too. Second, the miner has the ability to raise production over time, giving a double whammy effect. So you get two ways to win, and that’s better than relying on the rising price of gold alone to buoy your investment.
Risks: If you’re investing in individual stocks, you’ll need to understand the business carefully. There are a number of tremendously risky miners out there, so you’ll want to be careful about selecting a proven player in the industry. It’s probably best to avoid small miners and those that don’t yet have a producing mine. Finally, like all stocks, mining stocks can have volatile prices.
5. ETFs that own mining stocks
Don’t want to dig much into individual gold companies? Then buying an ETF could make a lot of sense. Gold miner ETFs will give you exposure to the biggest gold miners in the market. Since these funds are diversified across this sector, you won’t be hurt much from the underperformance of any single miner.
The larger funds in this sector include VanEck Vectors Gold Miners ETF (GDX), VanEck Vectors Junior Gold Miners ETF (GDXJ) and iShares MSCI Global Gold Miners ETF (RING). The expense ratios on those funds are 0.51 percent, 0.52 percent and 0.39 percent, respectively, as of July 2021. These funds offer the advantages of owning individual miners with the safety of diversification.
Risks: While the diversified ETF protects you against any one company doing poorly, it won’t protect you against something that affects the whole industry, such as sustained low gold prices. And be careful when you’re selecting your fund: not all funds are created equal. Some funds have established miners, while others have junior miners, which are more risky.
Gold Business Format
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- Start completing the fillable fields and carefully type in required information.
- Use the Cross or Check marks in the top toolbar to select your answers in the list boxes.
- Utilize the Circle icon for other Yes/No questions.
- Look through the document several times and make sure that all fields are completed with the correct information.
- Insert the current Date with the corresponding icon.
- Add a legally-binding e-signature. Go to Sign -> Add New Signature and select the option you prefer: type, draw, or upload an image of your handwritten signature and place it where you need it.
- Finish filling out the form with the Done button.
- Download your copy, save it to the cloud, print it, or share it right from the editor.
- Check the Help section and contact our Support team if you run into any issues while using the editor.
How to Start a Precious Metals Business
If you can get these basic ground rules down, you already have a head start on a good chunk of your competition.
Sourcing
Let’s start with where you source the metals.
Over time, your long-term goal is to forge relationships with large precious metals wholesalers. This is when your margins really start to grow and you can scale your business rapidly. But until you’ve amassed a decent amount of capital to get an account with the market-makers (mid-seven figures), you have to start smaller. The market-makers buy directly from the mints.
But you aren’t there yet. In the beginning, you have to start with the public retail showrooms, auction houses or pawnshops to source your gold and precious metals. Check with your local auction houses to see if they sell jewelry or scrap jewelry.
See if you can work out a deal with your local midsized pawnshops to buy their scrap metals at 100% value. Then, Google if your state hosts safety deposit box auctions to source low-cost, high-quality metal from unpaid bank accounts.
We recommend staying away from eBay, Craiglist and classified ads if you want to avoid scammers and frauds. Stick to trusted, local-level suppliers where you have due recourse if you run into a bad actor.
Testing
Now, let’s talk testing. When you’re buying wholesale off the major distributors and market-makers, testing becomes less important because the suppliers themselves work with independent analysts to test the authenticity of their bullion. Pawnshop and auction metals absolutely must be tested via any of the following methods:
• Electronic testing.
• X-ray fluorescence (XRF) testing.
• Acid testing.
It’s not enough to check for hallmarks on your bullion or coinage. These days, those can be faked pretty easily. Take it a step further by hand-testing your gold, silver or platinum’s chemical properties using an acid testing kit.
Electronic testing is a better method for testing low-carat metals (14-carat or lower), but they can sometimes misinterpret a gold- or silver-plated metal for the genuine article. If you want to take this route, there are plenty of electronic testing devices available on Amazon for $200 or less.
Last, portable XRF tests are the most expensive option, but they’re highly reliable. They involve spectrometers that can detect the authenticity of a metal in 10 seconds or less, but they run several thousand dollars and even well into the five-figure range for a decent piece of equipment.
We strongly recommend acquiring an XRF device at your earliest opportunity because it’s bar none the most reliable method of testing.
Estimating
Last, you need to be able to accurately determine a precious metal’s value. As an entrepreneur, your goal is to buy low and sell at a profit, so it’s imperative that you understand the true value of the scrap metal you’re buying, refining and selling.
Mobile apps or desktop services can be a huge help for estimating your metal’s value. As a rule, the closer you get to 24-carat gold, the more valuable by weight it’ll be.
In the industry, we rely on this formula for estimating the price per gram (PPG) of gold:
Current spot price x purity (in carats) x (PPG you’re paying the supplier) / 31.1 = market gold PPG
This is a great back-of-the-envelope method of manually calculating the market value of your gold based on the spot price. Simply take the finished PPG and multiply by its weight to get the true market value of your gold that’s ready for sale to the customer.
Becoming A Precious Metals Professional
Once you’re doing seven-figure annual sales, you might be able to cut deals directly with the big gold and silver market-makers. Until then, the long road to becoming an accredited precious metals investor starts with frequenting your local auction houses, pawnshops and estate sales. From there, it’s a matter of rigorous testing and estimating to establish yourself as a trusted name in the business.
How to Buy And Sell Gold Jewelry For Profit
To be able to buy gold jewelry affordably and to eventually make a good profit from future sales, follow the following steps in your purchase journey.
1. Research and Determine the best gold purity for you
Researching gold means familiarizing yourself with the different purity levels of gold; you should also determine what the most valuable gold purity level is. 18K gold, for example, has 75% pure gold, and it’s one of the most valuable types of gold you could invest in.
You may also want to think about vermeil or plated gold options – these are both created from the dipping of base metals into molten gold, creating a coating. Though cheap and almost invaluable, you can still find great value from some of these jewelry options.
2. Inspect the gold jewelry
Every time a customer brings you a piece of jewelry, or you come across a nice piece at a yard sale or a pop upmarket, you should first inspect that jewelry keenly. Look out for the hallmark sign showing that karats first. You could use the loupe to check and confirm the hallmark signs.
As mentioned above, you can still run an acid test to confirm the hallmark on the gold jewelry. Just make sure that you confirm with the owner before you scratch the piece. Once you have the owner’s go-ahead, make a very small scratch on the piece of jewelry’s outer layer, using the metal file.
Then start running tests on the piece, using the acid test from the 10k gold acid test going upwards.
Note this – if this is the first time you are testing the gold jewelry, you may want to start out with your pieces first to gain confidence and only run tests using jewelry owned by others once you are confident in your abilities.
3. Valuation
The best way to value gold jewelry is to value the pieces. You can do this by running valuation parties where the invitees are asked to bring their gold if they wish to, and as they enjoy different snacks, they could take offers for the gold, take your business card and go home, maybe think about it, or just contact you later on.
This is a great way for you to gain customers who would have otherwise gone to the cash-for-gold shops.
4. Try buying gold teeth.
Though not obvious, gold teeth are one of the unexpected yet profitable ways of buying gold. You can buy gold teeth from dentists. If this is what you are offered, you could knock the tooth away from these gold teeth before weighing them. Just use latex gloves and hand wipes.
5. Buy from reputable dealers.
You could also kick off your business by buying gold jewelry from some of the most reputable gold jewelry dealers like Zales or Nordstroms. They offer high-quality products and promise great margins. Also, always ask for the warranty information for the jewelry.
6. Get the jewelry inspected independently.
You can do this to avoid all doubts about the jewelry’s quality. Take the jewelry to a certified jeweler for more information about the gold jewelry and its authenticity.
Tips for Selling your Gold Jewelry for high profit
Follow these steps when selling authentic gold jewelry:
1. Know that the precious metal prices are quite volatile – Never act on impulse
And like any other investment, the value of the precious metals is highly volatile. However, you should be careful about the decisions you make and don’t be too fast to act when the prices dip too fast; the fluctuation is pretty much second-nature in the jewelry business.
You should evaluate the pieces of gold jewelry carefully, especially the ones you are willing to sell. Bear in mind the emotional value of the jewelry too, and only sell the pieces of gold jewelry when you are sure that they attract great value and will make great profit margins.
2. Get the appraisal
As mentioned above, during the purchase process, you should get the jewelry appraised. This is important for the highly intricate, antique pieces of jewelry, especially the ones that are paid for by weight. For these appraisals, contact reputable and independent jewelers.
3. Determine the value of the jewelry’s design vs. the material of the gold jewelry
Often, the scrap value of jewelry might appear too low, but when the scrap is melted into bullions, you could get much more value selling these bullions. But, just check the hallmark stamp on these metals before you test the purity level of the gold.
In other words, you must know exactly what you have. This is the most crucial consideration for you to bear in mind because the gold jewelry in your possession is hardly ever made of pure gold.
Even solid gold is made of impure gold, which means that whether you are looking to sell 10k, 14k, or 18k gold jewelry, you must have an understanding of what the jewelry is, exactly. The gold alloys will have gold in different percentages, and the higher the percentage of pure gold, the higher its value.
4. Find reputable buyers
Once you’ve determined the value of the gold jewelry, you’d have to find a reputable buyer to sell to.
For starters, the buyer must have a license to buy the gold, preferably in the state you live and run your business from. Check out their membership in reputable associations, registration, and trustworthiness.
What this means is that before you settle on a buyer, you must take time to research and shop around for the jewelry. Ask for bids from multiple companies and only settle on a buyer once you are sure about doing business with them.
5. Protect yourself, always.
You can do this by documenting and photographing everything necessary about the jewelry. Check the reimbursement policy for the jewelry in case of losses, and also get an appraisal in case of high-value pieces of jewelry.
6. Always know the actual price of gold.
To sell the gold appropriately and for a good profit, you must know the actual market prices for gold. As mentioned above, the prices fluctuate pretty much every day, which means that you should do market research for gold every day.
7. Maintain realistic expectations
Selling gold will not necessarily make you rich, but it might put some money in your pockets if you are smart about the business.
Cash to Gold Business Model
Gold has always been a very in-demand precious metal ever since its discovery. It’s worth getting higher as time passed by. It also symbolizes the country’s worth as it requires gold to make currency.
You can buy gold for several purposes like adding it to your assets, to sell it in the future to have gains, or even make it your business as part-time or full-time. Knowing how to do this kind of business will make your cash for gold business profitable.
Starting a cash for gold business is not as difficult as starting up other kind of business as this will not require you intense research and costly business plans. It has no start-up cash out and no government license/permit needed. All you have to gather are the information to help you understand how to manage this kind of business.
What you should have:
- Knowledge to appraise gold – Before engaging into gold buying business, you have to acquire knowledge on how to appraise certain item to determine the gold content of the jewelry and for you to determine how much you are going to pay for it and how much you are going to sell it as well.
- Gold testing kit – You can also buy this from a legitimate gold refinery company.
This should include the following:
- Acid and a stone for testing gold content of the jewelry
- A magnifying glass or also known as jeweler’s loupe
- A needle with a gold tipped used to test the acid accuracy of jewelry
- Tools use to remove stones and other impurities from the gold jewelry
- A magnet
Weighing scale – This is very essential as you will need this to weight the gold to know how much it worth. It is preferable to have a digital one.
Cash – Definitely it is needed because you are buying gold from your clients. However this kind of business is not as risky as any other businesses because you are buying a tangible and precious item.
Things to consider in starting cash for gold business:
- Look for clients where you can buy gold from. At first it maybe your family members, friends and the people close to you or even your colleagues. Let them know that you are into gold buying business so they will understand that you will buy their gold at competitive price.
- Know how to make the pricing. This is where your knowledge in upraising jewelry comes in. It is necessary to know whether the item contains or is made of genuine gold or not. The price will vary based on the value of its gold content. However, there are gold such as gold coins that can easily be valued based on the standard guidebook to coins.
- Identify where to cash out your gold. It is important to know where to sell your gold at a higher price compare to how much you bought it to make profit. It maybe a bigger jewelry store, or old coins store or even a gold refinery.
How to Start a Cash For Gold Business
1. Secure The Tools Of The Trade.
Most gold is stamped somewhere with the purity level it contains. A 10 karat piece of gold, for example, is just 41% pure. If you find the stamp, then you’ll know what the gold rate will be that you’ll need to pay instead of purchasing the scrap gold at 24 karat rates.
If you can’t find the stamp, then you’ll need to test the gold to determine its purity. Nitric acid is usually used, but it stains and burns the fingers.
2. Get Your Location.
A cash for gold business can be run virtually anywhere, but it shouldn’t be run out of a home. Thieves know that these businesses need to have fast access to cash and will target a home-based business like this rather quickly.
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Find a secure, high traffic location where your service is highly visible. Have a marketing presence locally as well so that people will come to you when they have some scrap gold to sell.
3. Determine Your Permits.
Insurance is mandatory for this type of business so that you’re insured against losses. You’ll also need to have a business license and if you sell any products, you’ll likely need a sales tax permit as well.
4. Set Your Prices.
The price of gold can change every minute during an open trading session. You’ll need to have a way to monitor the price of gold on a consistent basis. Use the spot prices as your main benchmark, add in your commission to this rate, and then promote that price. Commissions may be anywhere from 2-10% depending on what type of gold is being bought and sold.
5. Secure Purchasers For The Scrap Gold.
From time to time, you’ll have gold pieces that come into your store that are worth more if they stay intact. For these pieces, consider having what is known as a “gold party” in your community where people can stop by and shop your new items.
Otherwise you’ll need to have a relationship with a precious metals dealer for your scrap gold. Ask about their commission on the sale and then cash out the gold when prices are profitable for you.
6. Consider Supplemental Business Options.
A cash for gold business is often a supplementary business to other coordinating ideas. A jewelry store, for example, might include a cash for gold opportunity to encourage sales. An antique store might offer the service to attract a certain type of clientele. Think about what your strengths are as an entrepreneur and how you can combine those strengths with a cash for gold business and then make it happen.
7. Have a Place To Store Scrap Gold.
If gold prices are dropping on you and you don’t feel like selling the precious metals for a loss, then you’ll need a secure place to store your gold on hold. It needs to be separate from your liquid cash assets. Consider hiring a third-party administrator for these storage needs so that your inventory is held off-site in a secure vault. There is an associated cost with doing this, but it is also a lot easier to manage gold in this manner.
Knowing how to start a cash for gold business comes down to finding scrap gold to purchase and then resell for a profit. If your community doesn’t have a business like this already, then it could be a good chance to make some quick cash. Follow these steps and you may just find profits are waiting at your door.
Conclusion
Investing in gold is not for everyone, and some investors stick with placing their bets on cash-flowing businesses rather than have to rely on someone else to pay more for the shiny metal.
That’s one reason legendary investors such as Warren Buffett caution against investing in gold and instead advocate buying cash-flowing businesses. Plus, it’s simple to own stocks or funds, and they’re highly liquid, so you can quickly convert your position to cash, if you need to.
