When you’re looking to sell your gold you ideally want to get the best price possible so that you end up with as much money as you can.
Unfortunately a lot of people who want to sell their gold are doing so because they need the money right now, and so they end up going to local Cash Converters, pawn brokers, or jewellers to get instant cash.
Sadly this means that they are bound to get pretty much the least money possible, since all of these kinds of places pay far less than specialist online gold dealers.
If you end up falling into the trap of pawning your gold so you can redeem it later, you’ll end up paying a sizeable premium for the privilege, and many people fall into a pattern of doing the same thing month after month because the costs eat into their finances.
Eventually they’ve paid more in fees and charges than their gold is worth.
Why Do Local Gold Dealers Pay Less?
Local “near to me” gold dealers are usually jewellers, pawn shops, or Cash Converter type establishments who have premises, staff to pay, and scrap gold dealing makes up a small part of their business.
Every time they buy gold they need to ship it off to a refiner, pay refinery fees, shipping fees, and make a profit on top, so you will inevitably get a lot less from them than from a specialised company that deals only in scrap gold.
How Do Online Gold Dealers Work?
Online scrap gold dealers have a central point where the entire UK wide operation is conducted from.
They don’t have huge overheads of premises and rates, etc in every town and city, they get the gold delivered to one central point by mail, and then send it to the refiners from there.
By keeping their overheads down they can pay you more, and some of them are huge companies, turning over millions of pounds per year (one UK gold company turns over way more than £200 million per year).
Because they are specialists in scrap gold and dealing in gold coins, etc, they get better rates from the refiners, shipping costs are lowered, and this all adds up, because a lot of the top-rated and honest scrap gold companies make maybe 3% profit on the gold they buy.
It really is a stack it high, sell it cheap type business model where the profits come from volume of sales.
The way it generally works is you give them the details (on their website) of the gold you have – weight, carat, etc, and they give you a price for it based on the gold price right now.
You then pack it up and send it off to them, and your money arrives in your bank account within a couple of days (one day for your gold to get there, another for them to check it and pay you).
Online Scrap Gold Dealers vs Local Gold Dealers
The main points have been raised above:
Local dealers have shops to pay for, rates, staff, energy, shipping, etc, whereas the online companies have everything operating from a central point and so can keep costs down.
The pro’s and con’s are in the table below:
Pros & Cons of Scrap Gold Dealers
|Local vs Online||Pros||Cons|
|Local Scrap Gold Dealers|
|Online Scrap Gold Dealers|
Making Sure You Get The Best Price
Whether you decide to use a local company to get fast cash, or because you want to redeem it later, or you decide to use an online gold company you need to make sure you’re getting as much as possible.
You should always work out how much your gold is worth first, then approach dealers for their offers later.
- Make sure you know how much your gold is worth
- Get several online quotes to see how much they will offer
- Get as many local quotes as possible so you can compare them all
- Pick the one that offers you the most, depending on your circumstances
The aim is for you to get the maximum financial benefit from your gold, not to leave money on the table to benefit someone else.
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