While gold is not technically the most expensive precious metal, it is undoubtedly a unique substance. It has been used across centuries and civilizations both as currency itself, and as a means to back modern paper currency. While many people have no intention of letting go of their gold any time soon, there is still a massive market for buyers and sellers of scrap gold. This can be in the form of coins, jewelry, or even household electronics. If you are considering buying scrap gold in the near future, take a look below at just three of the most important tips you'll want to keep in mind.
Build a Sizable Fund
Quite a few people who set out to buy scrap gold do so despite not having built up a sizable fund of liquid cash. While it is all too easy to assume that you will be able to quickly sell the scrap gold you have purchased, your planned sale may be delayed or even called off entirely. If you do not have the cash on hand to make other purchases, then you are likely to be stuck with the scrap gold that you have until you find an opportunity to sell. This is a cycle that can continue for some time and can be avoided by conservatively managing your fund from the outset.
Get a License
In order to buy scrap gold legally from another individual — a person who wants to get rid of a broken watch with gold parts, for example — you will need to procure a license or permit from the relevant governing body. The exact requirements for obtaining a licensing document will vary from state to state, but almost always include an application form and fee payment in the form of a check or money order. You may also be asked to sign a statement of compliance in which you agree to use approved weighing and measuring devices and register your inventory online.
Research Market Prices and Competition
Once you have built a sizable fund and obtained a permit, you'll want to keep up to date on market prices and competition. This is especially important with regards to gold since its price fluctuates constantly. Be sure to offer competitive prices and offer additional services that local competitors do not. This will distinguish you from other scrap gold buyers and grow your business more effectively.