Just An Observation

OK, I just purchased my first three, 1ozt bars from APMEX. Total was $104.00. Now, that includes the silver at $2.99/bar over spot, $ .85/bar for the use of a credit card, then $12.95 total for S&H.
I, of course, realize that the more you purchase, the cheaper it is and I get the impression most investors probably spend a large amount with APMEX. Now, I plan at some time to invest a great deal in silver and as soon as I speak with my broker, I may do it sooner than later. I'm talking poundage. Here's my observation: For the little peddling amount I plan on buying from time to time now, an ounce here and an ounce there, (instead of spending my extra cash on fountain pens, stamps, Colt revolvers, and Winchesters - my hobbies), it appears to be cheaper to buy bars on e-Bay (like a "Buy It Now" of $34.00 with free shipping), than from, say APMEX. That is, of course, for the occasional odd bar. I do know to stay with known assayers. Just an observation.

Mark said:

OK, I just purchased my first three, 1ozt bars from APMEX. Total was $104.00. Now, that includes the silver at $2.99/bar over spot, $ .85/bar for the use of a credit card, then $12.95 total for S&H.
I, of course, realize that the more you purchase, the cheaper it is and I get the impression most investors probably spend a large amount with APMEX. Now, I plan at some time to invest a great deal in silver and as soon as I speak with my broker, I may do it sooner than later. I'm talking poundage. Here's my observation: For the little peddling amount I plan on buying from time to time now, an ounce here and an ounce there, (instead of spending my extra cash on fountain pens, stamps, Colt revolvers, and Winchesters - my hobbies), it appears to be cheaper to buy a bar here and there on e-Bay (like a "Buy It Now" of $34.00 with free shipping), than from, say APMEX. That is, of course, for the odd bar here and there. Of course, I do know to stay with known assayers. Just an observation.

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A couple of suggestions if you are going to use Apmex:
1) I do not order less than 20 ounces of silver at a time to try to get the discounts for ordering in larger batches
2) I never pay with a credit card to avoid the 3% charge
3) Watch for the daily/weekly deals; you can get some nice discounts
4) If you order from them enough, you can get your shipping reduced to $10 regardless of order size

Silver is silver and you should definitely shop around for price if you are ordering online. If you have a local coin shop, and plan on making regular purchases, you can often work out deals better than the advertised rates.

I have purchased from Apmex, ebay, local coin shops and more. BTW, there are some risks buying on ebay if you aren't using PayPal to make payment (eBay/PayPal offers buyers protection for deals gone bad).

I know it's smarter to buy in larger qtys, but I'm just sort of buying these with spare change. Stop eating so many "Slim Jims".

MMMMMMM!!! Slim Jims! They're almost as good as silver.

I agree with the Bug on this one Mark. For little purchases, unless you are "testing the water" with a retailer, will be better from a cost per unit standpoint, because the more you buy, the lower your premiums and insurance become. Even shipping gets better with quantity up to a point.

I like the idea of using spare cash to pick up silver, because if you spend sixty bucks on shiny, you won't drop it at a club or something instead. Sort of like a forced personal austerity, whose sole purpose is to save for the future.

While APMEX is a great dealer, you might want to check a few other bullion dealers for smaller purchases. SilverTowne, for example, offers free shipping on their trademarked 1, 5, and 10 ounce silver bars (which are nice, BTW). And Scottsdale Silver offers free shipping on orders over $500, which is handy if you want to order a roll of ASEs.

Good luck!

Agree that the local coin shop is usually the best place for a few ounces here or there. Look into the laws in your state to find out how metals are taxed. In some states there are dollar thresholds that, if your order is greater than the threshold, you don't have to pay sales tax (but less and you would have to pay the tax). Each state is different though.

ancona said:

MMMMMMM!!! Slim Jims! They're almost as good as silver.

I agree with the Bug on this one Mark. For little purchases, unless you are "testing the water" with a retailer, will be better from a cost per unit standpoint, because the more you buy, the lower your premiums and insurance become. Even shipping gets better with quantity up to a point.

I like the idea of using spare cash to pick up silver, because if you spend sixty bucks on shiny, you won't drop it at a club or something instead. Sort of like a forced personal austerity, whose sole purpose is to save for the future.

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I find it helps to have a set part of the budget dedicated to investments. At the beginning of each month move the set amount to a dedicated account and use it only on investing (debt pay down/stocks/metals/ect).

benjamen said:

I find it helps to have a set part of the budget dedicated to investments. At the beginning of each month move the set amount to a dedicated account and use it only on investing (debt pay down/stocks/metals/ect).

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Exactly! The more silver I buy, the less cigars I smoke.

Between premium, credit card fee and shipping, you paid $8.16 per oz over spot for those 3 Johnson Matthey bars. Let that number sink in for a bit. With silver at $27.xx/oz, you paid ~33% extra.

I understand the enthusiasm to get your feet wet. That's great. And now you gotta watch those extra costs. I'm still a noob when it comes to buying PMs, but am learning quickly to shop around for dealers with low(er) premiums, never use a credit card, try to use a check instead of wiring money (and incurring $30 fee), buy in bulk for the bulk discount, minimize the S&H costs, avoid taxes by shopping out-of-state or spending above a threshold.

Shop Around:
Visit comparesilverprices.com to see who has the lowest premiums.
Then visit Goldmart to see their premiums.

Credit Card vs. Wire Transfer vs. Check:
Most dealers will charge you an extra 3% if you use a credit card.
If you do a wire transfer, your bank will charge you money. Wells Fargo charges $30.
I prefer to use a check, but not all dealers (e.g. Kitco) accept checks.

Bulk Discounts:
As benjamen pointed out, some dealers offer bulk discounts. Buy 20+ and you save a bit. Buy 50+ and you save more. Buy 250+ and the premium is even lower. Some dealers charge the same if you buy 1 or 1,000.

Shipping & Handling, Insurance
Goldmart has tiered shipping that maxes out at $20 (free if you purchase > $5K), and no insurance.
APMEX has tiered shipping that maxes out at $25 (free if you purchase > $25K), and no insurance.
Provident has tiered shipping that maxes out at $25, and no insurance.
Kitco has $30 flat shipping, but charges 0.75% of your total order for handling/insurance.
BullionDirect charges $15 for shipping, but charges $14.95 + 4% of your total order for handling insurance.

Taxes
As dontdeBasemebro mentioned, if you buy local, it's likely they'll charge you sales tax. That ~7-10% is a pretty big hole to dig out right off the bad. Luckily some states waive taxes if you buy above a certain amount, e.g. CA waives taxes if you buy >$1,500.

I'm still reading, learning, shopping for the best deals. My first purchase was through APMEX, second through Goldmart. Hoping to lower my /oz cost, and looking for the experienced posters to share their secrets to buying on the cheap.

superhero said:

Between premium, credit card fee and shipping, you paid $8.16 per oz over spot for those 3 Johnson Matthey bars. Let that number sink in for a bit. With silver at $27.xx/oz, you paid ~33% extra. ...

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Premiums, CC fees and S&H add up, but not quite as bad as you calculated.

$104 / 3 = $34.67 - $27 = $7.67 / $27 = 28.4%

$104 / 3 = $34.67 - $27.30 = $7.37 / $27.30 = 27%

The rest of your post was "spot on".

PMBug said:

Premiums, CC fees and S&H add up, but not quite as bad as you calculated.

$104 / 3 = $34.67 - $27 = $7.67 / $27 = 28.4%

$104 / 3 = $34.67 - $27.30 = $7.37 / $27.30 = 27%

The rest of your post was "spot on".

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Those are still some high numbers. For silver, my rule is less than 15% over spot. It may take you longer to find the better deals, but it saves a lot of FRN over the long haul.
$.02

PMBug said:

Premiums, CC fees and S&H add up, but not quite as bad as you calculated.

$104 / 3 = $34.67 - $27 = $7.67 / $27 = 28.4%

$104 / 3 = $34.67 - $27.30 = $7.37 / $27.30 = 27%

The rest of your post was "spot on".

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You're correct. Missed the $104 in the OP. I used the $2.99 over spot, $0.85 CC fee and $12.95 S&H to calculate the $8.16 over spot.

On my section about Bulk Discounts, should have mentioned that Goldmart charges the same premium whether you buy 1 or 1,000 (at least on the website, it doesn't list discounts).

Another thing I'd add is:

Do the Math:
One store may have high premiums, accepts checks, but has low shipping. Another may have low premiums, but only accepts wire transfers and kills you on shipping/handling/insurance.

I put together a spreadsheet with 5-6 dealers. When silver and gold prices are right, I plug in quantity and sales price. I have formulae and lookup tables to calculate bank fees, shipping, handling, insurance, etc., and finally calculates the $/oz. It helps make an informed decision on who's REALLY cheapest based on the quantity I'm buying.

HCA1961 said:

SilverTowne, for example, offers free shipping on their trademarked 1, 5, and 10 ounce silver bars (which are nice, BTW).

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I did not realize that. Definitely, that's what I'll do.:rimshot:

10-4!

from time to time I've bought stuff, by check, from Paul Sims. However, he is only advertised in the coin magazines and not online. 5 dollar flat shipping no matter what the order, competitive prices, my order is usually in the mailbox two days after ordering, no wait for the check to clear.

Paul Sims
1-800-368-3039

PO Box 29249
Richmond Virginia 23242

the little old lady that answers the phone made it clear that they don't care much about bullion (they sell it but are primarily numismatics) so won't take orders on weekends, because the market is so volatile. However, their prices are very competitive. I suppose over the years I've bought 10 or twelve rolls of ASE and many, many rolls of junk. Junk used to be really cheap.

I'm getting ready to purchase a couple more ounces and I think I'm going to get 'em from Silvertowne.

benjamen said:

For silver, my rule is less than 15% over spot.$.02

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Yeah, I can live with 15% over spot, but that 15% will have to address Credit Card cost (or the price of a stamp and envelope), S&H, and assayer's commission.

Mark said:

Yeah, I can live with 15% over spot, but that 15% will have to address Credit Card cost (or the price of a stamp and envelope), S&H, and assayer's commission.

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I avoid the credit card fees. If I don't have the cash on hand, I don't spend. That will save you 3% right there.

S&H can be reduced (as a %) by ordering in larger, less frequent, increments. Also, most companies have a frequent buyer program where, once you have done enough business with them, you pay much less for shipping. For example, Apmex will only charge you $10 S&H for any size order once you reach a certain point.

I also watch for deals of lower premium over spot or free S&H from various dealers. Sometimes a company will be trying to clear out inventory of an item I would buy normally.

$.02

benjamen said:

S&H can be reduced (as a %) by ordering in larger, less frequent, increments. Also, most companies have a frequent buyer program where, once you have done enough business with them, you pay much less for shipping. For example, Apmex will only charge you $10 S&H for any size order once you reach a certain point.

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When is that point? Have you reached it? Is it based on number of purchases? Amount spent?