8200 Buffalo 1 troy oz. Silver Rounds
Silver Stock Report
by Jason Hommel, January 31, 2009
8200 Buffalo 1 oz. Silver Rounds
PM tonight, at seekbullion.com
I don't think anyone else has 1 oz. rounds cheaper. Most still don't even have 1 oz. rounds. Why not? Not sure. But we do. Get them while they last. We will continue to ration our silver via our auctions at www.seekbullion.com.
Why the odd amounts? Because that's what we have that is packaged up, ready to ship out Monday, and left over in our vaults from the 20,000 we had at the start of this week. We are getting in 13,600 more Buffaloes soon, but they are not packaged up yet. It's slightly disturbing that we are not getting another 20,000 ounces, but I hope we can get another shipment by Wednesday.
RESERVE PRICE: Our minimum reserve price is $2/oz. over spot. Spot was established this weekend at $12.71.
We placed two proxy bids in the name of "Jason Hommel" and "Jason Hommel Final Bid" to get the final reserve price of $14.71/oz. to show up, because too many people were confused about proxy bidding.
Yes, we are listening to feedback, improving our processes daily, to eliminate all confusion.
The auction site at www.seekbullion.com uses proxy bids, so you don't overpay. When you bid, say $1500, you may pay up to, but not over, $1500, and will win all bidding up to that amount. You will pay the minimum bid increment over the second highest bid up to $1500. So, right now, if you bid $1500, and nobody else bids, you would end up paying $1472.
Our "reserve proxy bids" were confusing, because our final proxy bid was not clearly evident to all bidders who didn't do the math, which includes most people. But some people thought we were continuing to bid up the price as automatic proxy bids were placed up to our reserve, but that was not the case at all. In all cases, we announced in advance what our final bid would be, and we bid in our own name, so there was no shill bidding, despite the slanderous comments of other people who support other businesses who cannot deliver silver within 30 days.
So I just realized that we actually goofed in the tiniest way. Since our "final reserve" must be $1471, we really should have bid up to $1470, because, that way, the next highest bid would then be $1471, as intended. Again, we are still figuring some of this stuff out. But why quibble over $1, when these are the cheapest rounds I can find on the internet, and when free shipping and insurance is included; there are no extra costs added.
Wires only, in 24 hours.
No foreign wires, they take up to 3 days.
Wires must be in US Dollars (Federal Reserve Notes), drawn on a US Bank, and sent by 2pm Pacific, next day after the auction, or Monday, since this is Saturday.
We are happy to report our increasingly positive reputation of 100% positive feedback of 99 ratings.
We have now had 410 auctions won and packages sent out. On Thursday, we sent out 44 packages, our biggest day ever. And since silver went up by 20 cents per ounce, we made almost no money, and we were happy with that.
Again, with such slim margins, we must have a reserve price, we must have wires the next day. I hope my explanations help you understand the nature of this business.
We are not making 20% with every sale (15.7%, now with silver at
$12.71, and our minimum at $2 over spot, because 2/12.7 = 15.7%).
It's more like 2% at this level (25 cents per oz.), where minimum reserve
bids are required, and are being hit.
And unfortunately for us, our turnaround times to make new product are still about 1 month, but they will hopefully get shorter.
That's about 27% return in a year for us, if we can turn our inventory monthly, and if our math is right, and if we don't make too many mistakes, and if silver does not rise too quickly, and if nobody defaults on us, like we know some are defaulting on some of our competitors. Lot of "ifs".
We invite all critics to enter this business if they think we are charging people too much.
We know we are helping many of our customers who are dealers make a higher rate of return than us, on smaller amounts of capital, as they quickly re-sell our products at ebay, and we are very happy with that, too. It's actually one of our goals, since we know that's the nature of how compounding works, as I wrote years ago.
Smaller Things Grow Faster June 19, 2006
Some are now complaining, and unsubscribing, because my emails contain "less commentary" and more "auction ads". Fine. My portfolio was slaughtered by the market manipulation and credit crunch, and forced margin call induced futures contract selling in the silver market.
Now I have to work for a living. The good part is that now I know a lot more. I could have never given you commentary about the silver market before, like in this email above. I will be explaining a lot more about the nature of the minting business in the weeks and months ahead, and I will continue to lower costs, and I will strive to be the lowest cost leader in the industry, with ever increasing volumes.
Already, we are leading the industry in fast "next day" outgoing
shipping, and many days, on prices, too. We know less
well capitalized coin shops who trade in person make more than
we do. Trust is hard to establish in this industry online, and the
competition is much more fierce.