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Start Your Own Business Buying and Selling Gold

Updated on September 17, 2017
Blond Logic profile image

Having met with business owners both locally and internationally, I bring fresh ideas to help you generate more income.

Gold wedding rings

Buying and Selling Gold
Buying and Selling Gold | Source

The Price of Gold

The price of gold is always in the news sometimes it's soaring and at other times declining. Like most people, you might be asking yourself if you should sell some while it is high to get the best price or if you should invest in gold just in case it goes higher.

If you want to earn a good income, now is the time to buy gold. I don't mean buying from jewelry stores, I am referring to buying from the public. On this page, I will take you step by step through the process to start you on your way to earning money from gold and other precious metals.

Although you may think you will need a lot of money to start this business, you don't. It can be started with just a few simple tools which I have listed below. Some of these may be able to be purchased used, such as a jewelry scale. Let friends and family know what you are doing and they may give you some jewelry to start your business off.

Instead of using your initial profits to buy something you want, reinvest it back into your new business. That way, if someone brings you a piece which you know is a bargain, you have the cash to buy it.



A Gold Testing Kit

The first thing you will need to buy is a gold testing kit. These are quite reasonably priced and absolutely necessary for your business. You will be using this to verify what carat gold your customer is trying to sell you.

Your kit should contain different acids that will test for 10k, 14k, 18k, and 22k.

Acid Test Kit Gold 10K 14K 18K 22K Silver Platinum Testing Stone Jewelers Tool
Acid Test Kit Gold 10K 14K 18K 22K Silver Platinum Testing Stone Jewelers Tool

These are reasonably priced and crucial to your new business. The acid will tell you which carat of gold (silver or platinum) your dealing with. With this knowledge you can then give your customer, a correct valuation of their jewelry.

 

A Professional Jewelry Scale

A professional jewelry scale is a necessity. Although initially more costly, it will provide you with years of reliable service.

Do not use a kitchen scale for your new business, they are not legal for trade. Not only are they not legal to use as a business scale, you are running a professional business, and as such should make it look professional!

It is a good idea to take readings from your scale at least once a day to ensure its accuracy. Keep up to date records of this in case anyone questions the validity of the weight. This type of question could be coming from a customer or from an official body.

Purchase a Magnet and File

Because you will be using a magnet every time someone brings you a piece of jewelry, it pays you in the long term to buy a quality one. The same goes for the metal file which you will be using to scrape away the outer coating of a piece.

Both of these items aren't expensive and will last for years.


List of gold hallmarks
List of gold hallmarks

Magnifier Loupe

When the customer brings you an item, it may have a mark on it to tell you what carat of gold it is. Using your magnifier loupe, check for any hallmarks.You may still have to do an acid test.

After asking the owner's permission, make a small scratch through the outer layer with your metal file. Then begin with your 10k acid from the set above.

Be Professional to Gain Respect

If you are just starting out and lack confidence, practice on jewelry you may already have. This will give you confidence when you are testing a customer's piece in front of them. The more you do, the more confident you will become.


Testing Gold Using an Acid Kit

How to Advertise Your Gold Buying Business

It is a good idea to have business cards or leaflets printed stating what you buy, for example, rings, chains, watches, or coins. Do not put the price you pay per gram or ounce because that will vary as the price of gold fluctuates.

Put your phone number but do not put your home address for security reasons. If this is where you will be buying from then once you have spoken with them on the telephone you can give them details.


Buying Gold Lockets

Buying Gold Lockets
Buying Gold Lockets

Death, Divorce, or Debt

These are the three reasons people often choose to sell at below market value. As sad as it may be for the person selling, this is good news for you. They need to sell and you want to buy, it is a win-win situation.


Have a Gold Valuation Party

Either you or a friend could organize a valuation party. Have them invite their friends and ask them to bring any gold they wish to have valued. They may take your offer on the night or they may simply take a business card, go home, and think about it and telephone you later.

Serve snacks and light refreshments, and you could also give your party planner a fee or gift for organizing the party. You may find that people will be happy to sell to you whereas they would have felt uncomfortable taking their gold to a pawnbroker or a "cash-for-gold" store. The relaxed friendly environment will put everyone at ease and with everyone taking home a business card or leaflet, you will be expanding your client base. Word of mouth is the best advertising.


extracted tooth
extracted tooth | Source

Buying Gold Teeth

Gold teeth are an unexpected part of buying gold. In fact, some dentists keep the gold teeth for their retirement. If you are presented with any, you will need to knock the tooth away from the gold before weighing.

If you feel squeamish about it, use latex gloves or hand wipes when working with the teeth.

Gold Pocketwatch

gold pocketwatch
gold pocketwatch | Source

Purchasing Gold Pocket Watches

Paying the scrap metal value for jewelry and watches is fine and you will be able to earn a profit. But before you sell, consider selling the watch or jewelry at auction or on Ebay. Do some research on the piece before putting it up for sale. If it has an interesting history, you could earn well from it. You may get more for them than the scrap metal price if it is a desirable object. If the watch doesn't sell for more, you can then sell it for its metal value.

Ask for ID When Buying Jewelry

It is possible you may be offered stolen jewelry. If you have any doubts, ask for ID from the person. Either a driver's license or a passport. Write their name, ID number, and address. If they are honest, they won't mind giving you this information. If you lose the purchase by asking for this information then you are better off. You do not want to be accused of handling stolen goods.

Keeping details of all transactions is a good idea. A simple notebook with date, weight of objects and amount paid and their contact details should suffice.


Staying Safe When Buying and Selling Gold

It is likely you will be carrying a large sum of cash or valuable gold and it is necessary to be aware of the risk of being robbed.

Although you may feel safe if you are in a public area, going to your vehicle and returning home could pose a problem. If a potential thief knows you have cash or jewelry in your home, you could be opening yourself up to being burgled.

Do not tell strangers where you live and be careful discussing what you do until you know the person.

Likewise, be cautious if you are called to someone's house to give a valuation. Tell them on the phone, you will look and give them a price but that you do not carry the cash because of security reasons. Most people will understand this and those who don't, are the type you don't need to be dealing with.

Build Your Contact List

You should start to build a list of people who will have a regular supply of gold, for example, dentists and people who do house clearances, official receivers etc.

Also, start to source where and whom you can sell to. All rings and jewelry may not go for scrap metal. There are places to sell such as Ebay, and to others who sell on market stalls and craft fairs. Seek these people out, they will often be looking for new suppliers.

© 2011 Mary Wickison

Is this the business for you?

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  • Blond Logic profile image
    Author

    Mary Wickison 10 months ago from Brazil

    A good rule of thumb is what you and your customer are happy with. It is likely your customer will know the current prize of gold and will think they should get that price. You will need to check the price and then allow yourself your profit margin. The price can fluctuate greatly and it will be your decision to buy or sell and at what price.

  • profile image

    Scott 13 months ago

    Is there a good rule of thumb on what to pay for metals in order to make a profit?

  • Blond Logic profile image
    Author

    Mary Wickison 14 months ago from Brazil

    This would depend where you live. I would suggest you start with your local Chamber of Commerce or the equivalent in your country.

  • profile image

    Mariya 16 months ago

    What kind of documents or certificates I need if I want ti sell gold and silver online?

    Thank you!

  • Nicole Young 07 profile image

    Nicole Young 07 18 months ago from Chicago Illinois

    You are welcome Blond logic, I just want people to be totally observant in attending gold parties because they usually weighed together all jewelry, regardless of the individual karat, and then you will be paid based on the the lowest karat value so it may make sense if you separate your pieces of jewelry according to karat. But I totally agree with you, honesty is the best policy, be it in business, situation or personal matters. What you reap is what you sow.

  • Blond Logic profile image
    Author

    Mary Wickison 18 months ago from Brazil

    Hi Nicole,

    Yes, that is good advice. Regarding the gold parties, from a business point of view, these are still a good way to buy gold. Remember this post is how to set up a business.

    The scales should be checked often, I would suggest every day and the data recorded. It is best to avoid all possible comebacks and the best way to do it, is to be honest and straightforward. Good record keeping is a necessary part of all businesses, this one included.

    I agree with you that much of the advertising is misleading but that is why the market is ready for someone who is honest. Plus, this will lead to positive word of mouth advertising which is always the best kind.

    Thank you for reading and your insightful comment.

  • Nicole Young 07 profile image

    Nicole Young 07 18 months ago from Chicago Illinois

    Gold is a good investment and if you plan on having a buy and sell business, here are few tips in selling gold which I learned from David Goldstein of Biltmore loan and jewerly, for the last 20 years, the price of gold is at its highest during the month of September, so you may want to consider selling gold during this month. In addition, be wary of rogue buyers and advertisements that are too good to be true, avoid gold parties if you want the best value of your gold because scales used in gold parties are not verified periodically by the US Department of Weights and Measures and make sure to always check the price of gold.

  • Blond Logic profile image
    Author

    Mary Wickison 5 years ago from Brazil

    Thank you,

    It actually requires a small amount of start up capital, because after your first deal, it can be self funding.

    Thanks for stopping by.

  • nenytridiana profile image

    nenytridiana 5 years ago from Probolinggo - Jawa Timur - Indonesia

    It is great! I think it is a good business and of course required a large capital. Good work blond logic!