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Start Your Own Business Buying and Selling Gold

Updated on March 26, 2017
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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

Recently there has been much in the news about the price of gold. 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.

Precious Metals Testing Kit Silver, Platinum, 10k 14k 18k 22k Gold Tests Plus Stone
Precious Metals Testing Kit Silver, Platinum, 10k 14k 18k 22k Gold Tests Plus Stone

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 and accurate records of this in case anyone questions you about it. This 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

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.

Testing gold using an acid kit

How to Advertise

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.

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.

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.

extracted tooth
extracted tooth | 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. You may get more for them than the scrap metal price if it is a desirable object.

Gold Pocketwatch

gold pocketwatch
gold pocketwatch | Source

Ask for ID

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 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.

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