Resale Value of 1 oz. Rounds?

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Silver Stock Report

by Jason Hommel, March 3rd, 2009


Several people today have asked me about the resale value of our 1 troy ounce rounds. They may be fearful that other dealers will not pay as much for them as other kinds of silver. They are worried about assay fees, verifiability, trust, recognition, fungibility, recognizability, etc.

Before I yammer on about all the details, let me prove to you the reality of the situation. I'm selling our newly minted 1 oz. rounds for about $16/oz. each in lots of 100, and my mom is currently re-selling the same 1 oz. rounds for up to $23 each.

Yes, it's true, I sell them for $16, and my mom re-sells them for up to $20 to $23. I'd say that these do, indeed, have a good re-sale value.

Proof: Look at my mom's feedback page. It lists the exact products sold, and the price.

Excellent Product, Great Communication, Fast Shipping Buyer: Mar-02-09 15:01 1 TROY OUNCES SILVER - PIRATES- OUR NEWEST ORIGINAL! (#270336005242) US $23.00 Thanks, all round good transaction. Thanks.

Mar-02-09 11:01 10- ONE TROY OZ. SILVER ROUNDS NEW WORLD ORDER (#270345262518) US $199.00 The cool thing is that other dealers are buying from either me, or my mom, and re-selling these at even higher prices, ON EBAY!

From powerseller arnie3823: He sold one of our Pirate rounds for $28 (with a vial of gold flakes)!

Arnie's got the NWO round listed for $41.95, if you "buy it now". !!!

Arnie's got two pirate rounds currently bid to $27.50 and $29.50!

I don't know exactly how Arnie is doing his marketing, but he's doing something right, and I support, and do not envy, his success!

Many will wonder how this is possible. Several reasons.

1. I'm selling in lots of 100 at www.seekbullion.com. My mom and others are breaking these down and selling them individually on ebay. My mom's store is through www.momsilvershop.com. Smaller quantity can result in higher prices, and larger quantity can result in discounts.

2. Ebay is a larger market than www.seekbullion.com

3. My mom (and arnie) has actually listened to my advice, and is putting it into practice.

4. I cannot do "everything", and small organizations tend to get stressed if they have more than about 30-50 orders in a given day.

I'm sure that I and my mom are NOT doing everything "right". Many could do this better. There are many marketing strategies that could be done that we just don't have time to pursue, because of limited time in the day.

People could re-sell at gift shops, jewelry stores, bars and nightclubs, toy stores, coin stores, online at ebay, online at personally created home pages, etc. The only limit to marketing is your imagination, and time.

Many of our 1 oz. round designs could use an individually taylored and designed marketing campaign. It's easier for us to create the designs than a full marketing campaign. Thus, we need your help. Or, rather, if you can creatively market a specific round into a specific market, you will likely be rewarded by that market.

Examples:

1. We have a "beer" silver round that can be sold in bars or to bar owners for resale to their customers, or as gag gifts at gift shops, or across University Campuses.

2. We have a "Do you Love God" round and a "New World Order" (NWO) round, and a FISH round that can be sold to pastors or in Churches or Bible Study groups.

3. We have a CFTC commemorative medallion that can be sold via silver news websites, or conspiracy sites. See also the NWO round.

4. We have a Pirate series that can be sold to "Soldier of Fortune" types or targeted to a punk or metal or artist crowd.

5. We have two Obama rounds that can be sold or marketed through people with politically democratic email lists.

If you can successfully do the work to tap into those markets, you can sell the rounds for much more, and it would also help broaden awareness for silver, and get silver into more hands. I cannot do it all, which is why these many opportunities exist!

This is BETTER than a multi level marketing opportunity, because you can get in at the ground floor, for as much as you want. But you have to carry your own inventory (as we do), be your own boss, creatively sell as you will, and you get zero downline residuals. Well, there are a form of residuals, but they are in an unexpected form. Your actions may result in repeat sales, and eventually a higher silver price, as more and more people are introduced to silver, and end up buying silver.

We recently sold the Beer and NWO. rounds for $20 each at the Phoenix show, because people are often willing to pay more in person, in cash, for instant gratification, and total privacy, in smaller amounts, as "gifts" for others back home.

There are other specific questions on this issue of resale value.

1A. How does anyone know that the silver is really silver? By look, feel, weight. If you have ever held silver before, silver is rather easy to recognize. It has a certain weight. And it rings, unlike lead. Besides, if it were easy to counterfeit silver, then our dimes and quarters today would look more like real silver, as they used to be, in 1964 and earlier.

1B. People sometimes email me about China counterfeiting silver, but China is not counterfeiting silver! China is counterfeiting NUMISMATICS, or "rare silver coins" by making replica silver coins, with the SAME SILVER CONTENT! The only way to make another silver coin look like another silver coin is to make the coin out of silver!

2A. What about resale value to dealers? Any generic "round" is recognized by dealers across the nation. This does not mean that they will all pay top dollar. Many will try to low-ball you and offer a price under spot if they act like they cannot re-sell them, or if they act like they have to melt them down, or if they actually intend to melt them down. But the rounds are in standard .39 mm (milimeter) sized 1 oz. round shape, a very common form of silver that has existed for a generation or more. An honest and fair dealer who wants your repeat business will offer a fair price of up to $1.50 over spot, or more, as that is the minimum manufacturing cost, not to mention shipping and packaging and ads and design and dies.

2B. Today, the market for silver is very small, because prices are so low. Thus, fewer dealers exist than normal now, while there will be more dealers when silver prices are higher. Sometimes today, there is only one very good dealer in a large metropolitan city of 100,000 people, and sometimes not even that dealer will offer a fair price, because he has little or no competition. This does not mean the coins have no value, it means that when a market is at the bottom, when only 1 person in 1000 is a buyer of silver, then it can be hard to find someone who will properly value them, because we are at the bottom of the market. You also cannot offer a bum on the street a $100 bill, and expect to get anything in value in return, which means it depends on who you ask. Again, if you can sell the same silver piece to the public at a profit, that proves the value.

2C. I have personally sold over 1000 old generic 1 oz. rounds, not my new ones, to a coin shop, at about $1.50 over spot, or more. That was before I had any newly made ones. I don't recall the price exactly, as it was quite a few months back, but the premium that I got was moderately and surprisingly high, due to the shortage of products industry wide.

3. Why are our rounds cheaper than the Silver Eagles? Is it because fewer people trust "generic" rounds? Partly. Maybe. Maybe it's the manufacturing cost is cheaper? Maybe it's because we are not "sold out", nor backordered. Maybe it's because the free market creates superior products to government products? Maybe it's because people fear that which is less well known? Maybe it's because people have a misplaced trust in government today. Then again, sometimes, our rounds sell for more. It depends on the quantity, the sales outlet, and the situation. Like in any market, prices vary.

Like anything, you can trust in government solutions, or you can trust in free market processes. You can see where we place our trust, and we hope you will follow our lead.

You can order your 1 oz. "art rounds" for your own long term investment, or immediate re-sale at www.seekbullion.com tonight!

Auctions start closing at 7PM Pacific. It's really easy to bid. Just "register", fill out your shipping address, and start bidding. Don't bid more than you are willing to pay, and you will usually pay less, no more than the minimum over the second highest bid, as the program enters your bid as the minimum needed to win, and automatically bids higher, only as necessary, up to your entered bid! After you win, we will send an invoice and easy-to-follow wire transfer instructions for you to take to your bank.

(If you make a mistake, there are real human beings behind the scenes who can fix things. One lady accidentally bid something like $15,000, instead of $1500. Did she have to pay full price? Of course not, it was a typo, and we could see it, and fix it. Who do you think writes this commentary, a machine? See, I know what typoes are alll aboot, two, so you cn know that I undrstind.)

Sincerely,

Jason Hommel