Start Your Own Business Buying and Selling Gold

Updated on January 21, 2020
Blond Logic profile image

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


The Price of Gold

The price of gold is always in the news sometimes, it's soaring and at other times plummeting. Like most people, you might be asking yourself if you should sell some while it's 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 making money from gold and other precious metals.

Although you may think you'll 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 you may be able to purchase used, such as a jewelry scale. Let friends and family know what you're doing, and they may give you some jewelry to start your business off.

Use your profit to reinvest it back into your new business and make your profit work for you. That way, if someone brings you a piece that you know is a bargain, you'll have the cash to buy it.

A Gold Testing Kit

The first thing you'll need to buy is a gold testing kit. These are reasonably priced and absolutely necessary for your new business. The majority of jewelry you'll be offered won't have a hallmark, and you can't guess at the quality of the metal. The acids in the kit will tell you which carat of gold (silver or platinum) you're dealing with. With this knowledge, you can then give your customer a correct valuation of their jewelry.

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

List of gold hallmarks
List of gold hallmarks

A Professional Jewelry Scale

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

Don't use a kitchen scale even if for only a short time; they're not legal for trade. You're running a business, make it look professional. Start as you mean to go on.

It's a good idea to take readings from your scale at least once a day to ensure its accuracy. Keep up-to-date records to avoid any legal problems. These could be coming from a customer or an official body such as trading standards.

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 will be used to scrape away the outer coating of a piece.

Neither of these items are expensive and they will last for years. You can find these at a hardware store or purchase them online.

You will also want a magnifier loupe to view details of the jewelry.

Inspecting Jewelry

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

When you are just starting, practice on your jewelry; this will give you confidence when testing a customer's.

If you're self-conscious when interacting with strangers, consider taking a public speaking course; this will help you become more confident when speaking to your customers. Contact your local city college for courses.

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 items 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.

Don't be judgmental about their unfortunate position; be professional and respectful. Every customer could refer more clients to you. Always leave a business card or two behind for them to share with friends.

Gold Wedding Rings
Gold Wedding Rings | Source

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 contact you later. Gain their trust and respect, and you could have a customer for many years to come.

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 the watch 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's 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're 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 at times 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 burglarized.

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, people who do house clearances, official receivers, and so on.

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.

Selling Your Gold

Because you will be buying your gold or other precious metals below market value, you can sell them more easily for a small profit. However, holding back until the market goes up is a better idea. Then you will see a better return on your money.

As with all businesses ventures, there is a financial risk, prices fluctuate often widely. Do not overextend yourself, and be prepared to wait for an upturn in the market. You don't make your profit when you sell, you make it when you buy.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

  • Where can I get a certificate to open my business?

    You should start at your local chamber of commerce. They will tell you which forms you need to complete.

  • What licenses do you need to buy and sell gold?

    This article is read by people in many different countries, and so the regulations will be different. Before beginning, you will want to go to your chamber of commerce (or equivalent) and ask what is required. They will be in a better position to advise you and assist you in setting up your business.

  • You said you need little capital to buy gold, but how does this work? How would I start with little capital?

    Once you have your scale and all the other items I mentioned in the article in place, start asking your friends and family if they want to sell or give you any articles of jewelry. Some people may be happy to help you and others may just want to get rid of it but can't be bothered to get it valued. Any profits you make will be put back into your business.

    As with any business, there will be start-up costs, but smart people just keep reinvesting it back into their business. Also, keep your overheads low. Buy, sell, repeat and keep building up your capital. When a bargain comes along, you will then be in a position to act quickly.

  • What should I look for when selecting a business location?

    Firstly if you are just starting out, the most important thing is to keep your overheads low. Therefore, don't commit yourself to a brick and mortar store. In the article, I mention organizing parties with friends of friends for example. There is very little you have to spend other than perhaps a few bottles of beverages.

    Then, once you get more spending capital under your belt, opt for a freestanding pitch in the city center. These temporary pitches are much cheaper than renting a shop. Although you may be outside in winter, think how many people are passing by. If you do this and continue with 'gold buying parties' in the evenings, you may find you don't ever need to pay the rents and rates of a high street store.

  • How can I determine the karat value of a gold item?

    In the article it explains about scratching a small section and doing an acid test. That will tell you the karat of the gold. The price you pay will fluctuate depending on the market value at the time.

© 2011 Mary Wickison

Is This the Business for You?

Submit a Comment
  • dougwest1 profile image

    Doug West 

    13 months ago from Missouri

    Buying and selling gold can be profitable, I have done it for decades. A word of caution, the improper marking of gold, in other words, it is a lower purity than it is marked is extremely extremely common. Before you start spending big money on scrap gold jewelry, do some experimentation with known pieces to get your testing skills up into good shape.You would be surprised how much off quality gold jewelry (it doesn't test the marked purity) is sold by high-end jewelry stores. Buying and selling gold is just like any other business, if you learn the ropes you can succeed - good luck and do you homework.

  • Blond Logic profile imageAUTHOR

    Mary Wickison 

    21 months ago from Brazil

    Thanks, James,

    You're right both Craigslist and eBay can offer some great deals.

    Thanks for your contribution.

  • profile image

    james parkhurst 

    21 months ago

    I can say is a great article on this business...I've been buying and selling gold for 6 years now albeit with parental assistance in the beginning (I was dealing with silver 2 years before that and copper 2 years earlier still)

    my best buy was a white gold Rolex president for £3,000 that I flipped for £5,000 (it was very beaten up)...I'd say the only thing that isn't covered is the potential to scope out deals online as I have bought from Craigslist and even eBay to find good deals

  • Blond Logic profile imageAUTHOR

    Mary Wickison 

    3 years 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


    3 years ago

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

  • Blond Logic profile imageAUTHOR

    Mary Wickison 

    3 years 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


    3 years 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 

    3 years 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 imageAUTHOR

    Mary Wickison 

    3 years 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 

    3 years 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 imageAUTHOR

    Mary Wickison 

    8 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


    8 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!


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