IPFS News Link • Gold and Silver
A Beginner's Guide to Buying Silver on eBay
• http://survivalblog.com, by Gil G.Troy Weight
When you go to kitco.com and they list the current price of silver or gold (commonly referred to as the "spot price"), the value that you see listed is the current trade value of one "troy ounce". Troy weight is entirely different from the typical weight scale we use in the US today, more specifically called the avoirdupois system. Troy weight is only really used for precious metals, gems and gunpowder, so unless you have experience trading in those markets, you may need a little education on this scale.
First of all, a troy ounce is not the same as a standard ounce. I'm not going to bore you with numbers and values and conversion tables. If you're truly interested in the specifics, there are abundant resources available. Suffice it to say, a troy ounce has about 10% more mass than a standard ounce -- that is to say, it's heavier. However, a troy pound is smaller than a standard pound. There are only 12 troy ounces to a troy pound, while there are 16 ounces to a standard pound.
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1 Comments in Response to A Beginner's Guide to Buying Silver on eBay
eBay is simply NOT a good place to buy silver, of ANY kind.
The primary reason why is eBay's fees. eBay sellers have to pay eBay fees or roughly 9% on their sales, and then, since most eBay purchases are paid for with PayPal, they wind up paying another 3% or so for the payment service. They even have to pay the PayPal fees on the shipping costs. As a result, someone selling silver on eBay has to mark up their items by 12% just to make up for the eBay expenses. There's simply no reason to pay that kind of markup on Junk silver, which I agree, is the smartest way to buy silver.
The author also fails to mention that there is indeed a major difference between buying junk silver by weight and by face value. The difference is wear. Heavily worn coins have the same face value as those in better condition, but they always weigh less. The difference can be substantial. I've seen silver dollars that were heavily worn that weighed as much as 3 grams less than those in good condition. Wear can therefore easily account for a hidden premium of another 5% to 10% of the price you're actually paying for your silver.
The shipping & insurance charges can also add substantially to the premium you're paying, especially on smaller orders.
The only way to get a really fair deal on junk silver is to buy it by it's actual weight. I found a local pawn shop where the owner sells junk silver at spot. We put the purchase on the scale. Divide 90% of the weight in grams by 31.1 (1 troy oz = 31.1g) and then multiply that number by the current spot price.
There are plenty of honest dealers around. If you can't find one who's charging spot based on actual weight, then it's OK to pay a small premium of $1 to $2 over spot as long as you're paying it on the actual amount of silver that you're buying by weight.
Anyone who pays over $2 over spot for junk silver is being ripped off.
Caveat Emptor
fs