Making money buying and selling scrap gold and precious metals can bring substantial revenues. If you have an existing business or want to establish a new business, this type of business is a proven revenue maker.
In today’s economic environment, this type of company makes more sense. The startup costs are minimal and with a good online training course, you’ll not have to endure an extensive learning curve. You’ll get a quick return on your capital and your time investment.
The economy has taken a major hit and many find themselves in a situation where they have to get cash quick. They will sell their gold and jewelry; even pawn their other assets to meet current demands.
This business can be conducted in a store or other physical location or can be set up though solicitations via Craigslist or local newspaper ads. Some even hold “gold parties” where prizes and profit sharing reward you handsomely for the effort.
Advertising you business can take the form of fliers in areas, passing out business cards, creating a website targeting local traffic and working with local businesses.
Scrap gold, silver and jewelry can be found at estate sales, flea markets, yard sales, church sales and fund raisers held by many organizations. Even a box of computer CPUs can yield multiple thousands of dollars once refined. Scrap gold and silver such as Industrial scrap, dental scrap can turn up anywhere.
Competitive buyers typically give 40 cents on the dollar, which allow one to bid much higher and still keep a reasonable profit margin. Nevertheless, on need knowledge to identify what types of pieces will get the best money and factors to watch out for and meticulously test in order to be 99+% sure about the quality you are offering to purchase.
Some of the information you require at your fingertips are:
1. Metal Testing Formulas
2. Weights and Measures Charts
3. Top Paying Refiners
A word about the word “karat” as in 24 karat gold. “Karat” is a variant of “carat.” The FTC has standardized the karat markings used within the United States and items 10 Kt or greater require stamping with either “K” or “Kt.” Decimal marking are also an option.
The scrap karat percentages of gold value need to be clearly determined through foolproof testing methods and using appropriate formulas and accurate weighing scales. Purity is commonly measured and the karat nomenclature is used. 100 percent pure is 24 karat gold and it is the softest gold. It’s not typically used for jewelry making because of this softness issue.
18 carat gold is 18 parts gold to six pars of an alloy. This marked it 75% pure. Because it is harder and can take more punishment, it is often used in jewelry. There is 16 karat, 14 karat and even 12 karat stamps on gold. The FTC (Federal Trade Commission) requires that no gold jewelry sold in the United States be fewer than 10 karats.
When adding up multiple karats designated pieces multiply the weight by the karat and divide by 24. For instance, if you have 20 grams of 18 karat gold, you have 15 grams of pure gold (20 grams x 18 karats = 36/24 = 15 grams).
Gold Karats Purity Other Added Metals Equivalents
24 karat gold 100.00%… Decimal equivalent = 0.000% parts gold = 24 in 24
22 karat gold 91.60%… Decimal equivalent = 0.084% parts gold = 22 in 24
18 karat gold 75.00%… Decimal equivalent = 0.125% parts gold = 18 in 24
14 karat gold 58.5%… Decimal equivalent = 41.500% parts gold = 14 in 24
10 karat gold 41.7%… Decimal equivalent = 58.300% parts gold = 12 in 24
Grams and pennyweights are the common forms of measurements for weight for gold. When it comes to troy ounces, one pound equals 12 troy ounces. This is the European standard of measurement where the system of measurement is based on fractions of 1,000 which is the number of grams in a kilo.
Then there is the Avoirdupois weight system which we Americans are familiar with, where one pound equal 16 ounces. This is commonly used in the United States for weighing just about anything except precious metals.
When weighing gold, use grams and pennyweights as a standard for measurement.
Below is a weight conversion table:
1 gram (g) = 0.643 dwt = 0.0032 oz t = 0.035 oz av
1 pennyweight (dwt) = 1.555 g = 0.05 oz t = 0.055 oz av
1 troy ounce (oz t) = 31.103 g = 20 dwt = 1.097 oz av
1 ounce avoirdupois (oz av) = 28.3495 g = 18.229 dwt = 0.911 oz t
Gold test kits use acids to determine the purity of the gold. A test kit will have different acids for 10K, 14 K 22 K and 24 K gold. A portion of the gold piece is scratched on a test stone where one will note the time the acid takes to dissolve the impurities. If the solution leaves the scratch intact, it means the object being tested is greater than the testing acid used.
For bulkier items such as chains and coins that could be plated, it’s best that a deep notch be made and the metal inside tested.
Testing For Platinum and White Gold
Similar to gold, a scratch test is used. You’ll want to leave a large thick visible deposit to test about 1 Ãï¿½Â½ inches long. A drop of the test solution should be placed on the scratch and the color should remain a white bright color if it is genuine.
If the scratch is 18K gold, the material should change to a light bronze color in about 3 minutes. For 14K white gold, the residue on the stone should disappear in 15 seconds.
How to Find Scrap Silver
Real silver, when found, is called sterling silver. You’ll find it by looking for marks such as “.925” or the word “sterling” stamped on the item. There are many other marks of European or other locations throughout the world that you’ll need to become familiar with by either purchasing a course on the scrap trade or through books on the subject.
You can purchase a silver test kit through a jewelry supply house for further confirmation that you have an authentic silver price. This is done through use of a silver testing solution and a test stone. A testing solution is used with a test stone, file or plate so you don’t leave acid marks on the silver. Items that are silver plated or low quality silver will turn green when nitric acid is placed on it because of the high copper content. On the other hand, if it is sterling silver, the item will turn a creamy color. A small file cut is incised onto an inconspicuous location so that the rest of the piece is protected from the acid test, however a stain will be left.
90% to 100% = Creamy Color
77% to 90% = Gray Color
65% to 75% = Light Green Color
You’ll want to locate top paying refiners to work with. Refiners take a small percentage for their services and you’ll want to check around for those who are reliable and pay the highest percentage.
Ask if licensing is required in your state to conduct this type of business. You might want to have a legal structure to your business to avoid possible litigation problems and use the tax benefits that come from running your business. A simple LLC formation for around $100 cost will do the trick. You’ll want to get a federal tax ID number as well as registering your business with the state.