What you ultimately pay for scrap is up to you. But you really need
to know what you can get for scrap from your refiner before you start
shelling out. The longer you hold scrap the more exposure you have to
a decrease in gold and therefor you might want to hedge your bets by
paying a little less over the counter. So some might pay higher and
send scrap to the refiner more frequently but any batch charges might
reduce your bottom line, long term if you do many batches
So how do you estimate what you will receive for any given karat? If
you use dwts, take the market price, multiply by.05(20 dwt to the
troy oz), multiple that by your karat numeral (14K=.585 theoretical),
multiply that by the percentage of return your particular refiner
pays (some pay 90%, some 95%, some more, depends on who and how much
weight in the batch), then deduct refining charges which are a batch
oriented thing. You’ll no doubt insure the shipment so figure that in
too.
so… say $1250 market and 14K scrap…
1250 x.05 = 62.50 per dwt for pure gold
62.50 x.585 = 36.56 per dwt for 14K scrap
36.56 x.95 = 34.73 per dwt 14K scrap paid to you before refining
charges
as I said refining charges can vary so get that info from your
particular refiner. If you send in $3000 worth at a clip a hundred
bucks or so become almost meaningless if you bought well. Send in
$500 worth and suddenly the charges become a significant percentage
taken out of your bottom line.
You can boil down that math to a simpler equation for each of the
major ka rats but I figured you might need to know all that goes into
it rather than take somebody’s final formula as gospel. The above
example becomes Market x.02778 = paid to you per dwt of 14K, then
minus charges. Adjust the formula for grams if that’s what you use.
Not everything stamped 14K is actually 58.5% gold.
As far as what to pay…You might elect to treat scrap like any
merchandise purchase that you might perhaps keystone. You might want
to pay more if you have competition. There’s no law, there’s no
overwhelming custom.
One thing to watch out for is the customer who pulls things out one
at a time to get individual prices for each piece, tells you the life
story of each one and you might go thru a dozen quotations and still
not bag the sale. Its easier to say, “well let’s see everything
you’re thinking of selling first”. Remember to deduct weight for
large or numerous stones, 1 dwt = apx 7.8ct. If you’re buying gold
then buy GOLD. Do not pay for inconsequential stones, do not pay for
design, do not pay for names. Buying gold and buying estate are two
very different things. Buy the gold, sell the gold, go out for
dinner.