If you live in London and you have some gold coins or jewellery to sell, then you’re probably going to end up looking for a scrap gold dealer.
While it seems wrong to consider gold jewellery, watches, Sovereigns, Krugerrands, or other coins to be scrap gold, the reality is that gold dealers will generally offer just the value of the gold itself.
Although these items often have a sentimental value to us, and may even be in pristine condition, most dealers will not want to hold them in stock because it may take years to sell them, if they ever sell at all.
Part of this is because fashions change and choosing jewellery for example is a very personal and subjective thing.
So, most dealers, whether a pawn broker, jeweller, or scrap gold dealer will send the items to be melted down into bullion.
There is a cost or fee that the refiner will charge the company you deal with, and the dealer will also want to make a profit, so the price you get will inevitably be less than the actual gold value.
How much you will get for your gold will vary, and some dealers offer better prices than others (of course some are rather shady too), so make sure you work out how much your scrap gold is worth first.
Before you approach a scrap gold dealer in London:
- Work out how much your gold is worth
- Get prices from as many gold dealers as possible
- Consider an online / postal gold dealer
You might also find our article Do Pawn Brokers Pay Well For Gold useful to read.
Online scrap gold dealers often offer you a much better price than local dealers, we explain why below:
Online Gold Dealers vs London Scrap Gold Dealers
Why do online scrap gold dealers offer more than local “near to me” gold dealers?
Online gold dealers are set up to handle huge volumes of gold and dealing in gold is their only business.
To give you an idea, one of the biggest UK online scrap gold companies turns over more than £200 million per year that is a lot of gold!
Its over £4 million per week.
Because of the volumes of gold, they trade in, they get better rates from the refiners.
They also have strong links into the volume trade side of the gold business, and they operate from a central business premises that is set up specifically to handle gold dealing.
Your local “near to me” scrap gold dealer on the other hand has a premises that costs money to operate, they are probably mainly a jeweller or pawn broker, so dealing in scrap gold is probably a small part of their business.
They will pay more in refinery fees, will have to pay postage to ship their gold, and they need to make a good profit on the gold they buy and sell.
For this reason, an online gold dealer will usually offer you a much better price for your gold.
It all comes down to economies of scale.
Pros and Cons of an Online Scrap Gold Dealer vs a Local Scrap Gold Buyer in London
Many people who want to sell gold are selling because they find themselves needing cash urgently and going to a local London gold dealer seems like the easiest and fastest way to get cash.
This is true, but as explained above if you end up going to a local jeweller, pawn shop, or a Cash Convertors type gold dealer, then you’re going to get your money faster, but less of it.
On the one hand you can get money today, and if you use a broker or cash converter then you can redeem your gold later, but you pay a hefty price for this.
Its generally not a good idea to pawn gold with the intention of redeeming it later, you can end up paying 20%+ in fees every time you do it, and this can end up becoming a monthly cycle.
You are in effect throwing away money every month at a cost of 20%, in 6 months youve paid more in fees than your gold is worth.
The pros and cons of both online and high street gold dealers is in the table below:
Pros & Cons of Scrap Gold Dealers
|Local vs Online||Pros||Cons|
|Local Scrap Gold Dealers||
|Online Scrap Gold Dealers||
If you havent read it already you might find the following article useful:
Other Ways To Sell Gold In London
Another way that you could sell your gold is to use an online auction service like eBay, or a local auctioneers.
The disadvantage of a local auction house is similar to the disadvantage of a local gold dealer.
They have premises and staff to pay for, they also charge a sellers commission, and they might only reach a small audience of potential buyers, who could all be the trade who want to pay the minimum possible.
Using a local auctioneer is likely to result in you getting much less than your gold is worth, and of course they may only hold suitable auctions once a month.
eBay may be a much better solution, since your items will be in front of a much larger audience of buyers, although you still have to pay a commission which will eat into your money.
In summary, the disadvantages of eBay and auctions are:
- Listing and/or sellers fees (can be 10% to 20%)
- PayPal or other payment processor fees
- Can take time to sell
- Can take time to be paid (local auctions could be weeks)
- Online auction frauds / non-payers
- Buyer-Seller disputes
On the other hand, if your item is high quality or rare jewellery or coins, then the people bidding on it will probably pay far more than the gold content alone.
Although this is not going to be a common occurrence, especially with standard gold coins, it does happen, so if you believe your item to be rare then an online auction may be a good idea.
The pros of eBay and online auctions are:
- Your item gets exposure to a large audience of buyers
- You will receive a good price (before fees)
- If your item is rare, you could get a lot more than the gold content value
Conclusion Of Using a Scrap Gold Dealer in London
Generally speaking, the best option to get the maximum value for your gold is to use a specialist online gold dealer.
It usually only takes a couple of days (excluding weekends) for the money to appear in your bank account.
If you need money today then you probably have no option but to use a local London gold trader or pawn broker, but this will result in you getting less money for your gold.
The advantage is that you might be able to redeem your items later if they have a sentimental value for you, but you will pay a hefty fee for this luxury.
- If you need cash today, then you probably have no choice but to use a dealer near to you
- If you want to redeem your item/s later then youll need to use a pawn shop type service
- If you want the best price possible a specialist online dealer is probably best
- If you use an online dealer, you cant redeem your items later
- If you believe your item is rare then an auction might get you a lot more money
We hope that is helpful to you, please take a look at the other useful articles we have on scrapgold.org.uk