(You can get silver from me, or them, but just get it!)
Silver Stock Report
by Jason Hommel, March 12th, 2009
I certainly don't have to reveal my suppliers. Some would say I'm crazy to do so.
In one sense, the names of my suppliers are like a kind of "natural informational monopoly", and that without access to my suppliers, my customers have to order from me.
But I want to reveal my suppliers, and this is not the first time I have done so. Some of these below I'm listing for the first time. Why? Because minting and dealing is an extremely capital intensive business. Not even all the mints have enough capital. And most people are not well capitalized enough to even order from my suppliers, so I can't really lose.
Also, I know that my capital is insufficient to meet the demand of this market, and that the market will be better served if there are more people dealing silver. With more people dealing silver, more people can buy silver, and if more people can buy silver, then silver prices will rise all the more, and that's more important than my own personal profits from dealing, which are rather small by comparison. I will profit far more from silver's overall price rise, from the capital gains on my inventory.
How will the world's investors actually buy more than 100 million ounces of silver per year, unless capital is invested in such ways to enable people to buy silver? In my opinion, in 2008, the silver industry; the miners, the mints, the dealers, all let down the investing public big time by "running out" and getting "backed up" nearly across the board, which prevented people from buying their product: silver.
What's really shameful, is that a lot of public exploration companies are sitting on tens of millions in cash, and have not put it into silver, the very thing they should be producing and promoting. And these company managers don't even know where to go to get silver, or how to store silver, or how to deal silver, even if they wanted to!
So, for the sake of silver, for the sake of honest money, and for the sake of the entire industry, and specifically for the sake of wealthy capitalists who wish to compound their silver by serving the public, here are my top suppliers:
You can order 100 oz. (or 10 oz.) Academy Bars here:
You must be a business to order, there is an application process, they don't want to deal with everyone; they might have about 10 dealers ordering from them now. I barely qualified, they said, and that was when I ordered 35,000 oz. in my first purchase.
You can order 1 oz. generic rounds from Jim in LA.
Jim's Mint is state of the art, newly set up, with no debts. His turn around time is about 3 weeks, and minting costs start at $1.25 or less if you order in bulk. Again, orders should range in size from 5000 to 10,000 oz., but right now, he'll take smaller orders. There are three extra fees for rounds. First, to buy the physical silver is 20 cents per oz. over the "asking" price for spot, raising the total to $1.45. Second, there are extra shipping costs, which can add another 15 cents or so. Third, there may be sculpting fees and die fees which can range from about $1000 to $3000 depending on if you make a 2d or 3d custom design for a round. If you go with your own custom design, it also takes longer, of course. We find that you need to make 5000 rounds to properly amortize the minimum $1000 cost to make something new, at another .20/round, for a total of about $1.80/round, plus a 3 week delay, but may be faster. Or, you are FREE to use any of our die designs, for a commission of $.20 per round.
I recently saw some old 1 oz. rounds for sale for $1.69 over spot, from one of the other major dealers out there. I was going to buy them, since they were cheaper than making new rounds, and cheaper than anything I've seen anywhere in many months. But they sold out in one day, and it was only 2000 oz. anyway. Again, this is why the market needs newly minted product; it's the only way to reliably serve the market's demand for silver, even if prices are a bit higher for newly minted silver rounds. See, old product is just not coming to market like it used to, or if it does, not in reliable amounts to satisfy current demand or increasing demand.
NAME REMOVED UPON REQUEST
Again, you have to apply to do business with NAME REMOVED UPON REQUEST. They sell 1000 oz. silver bars at .20 over spot. They also have 100 oz. bars, but they cost more than Academy. Delivery time is about 3-4 weeks, but may grow shorter. They are a family-run, German company, with nearly half a billion in precious metals, very solid, low default risk.
I have several competitive advantages over my suppliers.
1. I have product that can be shipped immediately, with no delay, and thus, no possible risk of default. Even if my suppliers default on me, you will still get your product, since we only sell what we already have in stock, and we ship out the SAME DAY as wires arrive.
2. I can ship in smaller quantities than my suppliers. I can ship as little as 100 oz. to 500 oz. at a time, and they need 5000 oz. order sizes. They need large quantities and are not set up to deal with "the public". We can, since that is our primary business.
There are other suppliers who may cost less. But reliability, and fast delivery times are extremely important to me and my customers. If I have 200,000 oz. of silver, and if my delivery time is one month long, selling 5 days per week, then I can sell a maximum of 10,000 oz. per day. On the other hand, if I can replace my product within 1 week, then I can sell up to 40,000 oz. per day. And if a mint is backordered to 8 weeks, that's an unacceptable delay for me.
Thus, I know coin shop dealers who would rather order from me, since I can deliver faster than any of my suppliers. Speed enables faster turnover, and thus, a higher volume of sales.
Now that I have listed three major suppliers who can deliver in about 3-4 weeks, please don't accept another company's sob story about how they are backed up for 2-6 months. If so, they are working with bad suppliers, or they are floating on your money, using it like unsecured debt financing.
If you want to build your own mint, the price tag will run from
$500,000 to $1 million. The best machines are more costly now, and
it's harder to find them used, and new machines cost more. The
man who builds most of the mints in the U.S. is John. I was worried
when I realized the importance of this one man. I asked him who
would do his job in case something happened to him. He has people
he's trained. Phew! To get your own mint up and running can
take as long as 3-6 months.
Tonight, we only sold just over 2000 ounces of silver. The market is a bit soft right now, since silver prices are still on a dip from $20/oz. I expect demand to heat up when prices go back over $20, and break out to new highs, which should be rather soon, given the incredible inflation taking place with Obama's $2 trillion stimulus package, which will probably be more like $3 trillion. After all, the silver investment market is only $1 billion/year.
Oh, that reminds me. I'd like to re-introduce the latest new "pirate" rounds in our pirate series.