Cash for Gold companies are in the business of buying scrap gold and then reselling it to a refiner. Making money in the Cash for Gold business is a little more complicated than simply buying low and selling high. A well managed company will also follow the gold market very closely.
High gold prices, particularly in a weak economy, bring in a lot of customers that want to sell their scrap gold and jewelry. While the Cash for Gold companies do have to pay a little more to purchase the gold from their customers, they also can sell it for bigger profits to the refining company.
While all companies have their own unique business plans, they generally fall into two categories. Some companies seek to buy the scrap gold for rock bottom prices and then resell it for top dollar. While this may lead to a high profit margin on individual sales, such a policy often leads to a low volume of customers.
Smart customers will shop around for Cash for Gold companies that offer the fairest prices on their gold items. These companies operate on a lower profit margin, but a higher volume. Finding the right balance between the number of customers a business attracts and the price they pay for scrap gold is the key to maximizing profits.
The customer that brings their old jewelry and scrap gold into such an establishment should have a basic understanding of how their gold items are valued. For the most part, a Cash for Gold Company is only interested in the melt value of the gold and will not pay you extra for the design or even any gems that are part of the jewelry that you bring in to sell. So, if you have a gold ring with a 2 karat diamond, it would not be wise to sell it for its scrap gold value. While the Cash for Gold will certainly buy the item, they may or may not compensate you for the value of the diamond.
One thing is certain, they know the ring is worth much more than just its gold content and will not put it with the other scrap gold to be melted down.
As a seller, know what you are selling. You are paid based on the purity of your gold. Most jewelry is either 14 or 18 karat gold. Pure gold is 24 karat. When you sell 18 karat gold, it is made of 75 percent gold and 25 percent metal alloy. You will never get more than 75% of the spot value of gold for an 18 karat piece of gold jewelry.
Sellers should also shop around and get the best price they can find for their scrap jewelry. Pawn shops will buy gold, but they are notorious for giving customers an extremely low-ball offer. Look for a store that guarantees they will meet or beat any other legitimate offer by the competition. Reputable companies want to keep you coming back again and again. If you feel cheated, you will not be back and the store will lose a customer.
Amy Lopex is the author of this article who shares information on cash for gold companies and tips on selling gold items to the best local and nationwide gold buyers on her main blog webuygoldonline.net/blog! Thanks for reading!
I'm Louida from Atlanta, Georgia and I'm a mother of two daughters, blogger, and full time working mom at a Business Consulting Firm.
I love helping others learn how to start working from home on the internet free to supplement their current income.
I also blog at Productreviewmom.com
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