Silver Bullion Biz In Thailand

[mccw]

This is just an idea and I'm happy for all reasoned comments or even some one to copy this as the reason I thought of it is chiefly because I would like to be able to buy decent silver bullion and be able to trade/ sell it again.

So the buisiness idea is to start a mint and ensure quality, standard, consistency etc. Make money by selling the bullion at a few % mark up.

So options to sell:

-Try to do a deal with a gold shop network and profit share.

- a trusted network of private dealers

- solo, on line or in person

Problems

1) fakes and confidence.

Hopefully working with an existing brand/ dealer network would minimise this. Finding / putting trust in individuals in Thailand or anywhere else is not ideal but possible?

2)payments

-Receiving silver if solo should only be after purity test or even melting down.

- acceptable mark down? Scrap at 70% spot? Other bullion at 95%? But what about beads? I hear this is the main source and trade in silver for jewlary. Presumably I would need to buy mainly this to start with to refine in to the high grade.

3) source - beads - my wife used to work in hems and says that the Thai beads are not pure but created from melted down old scrap and coins like old rupees etc. what is the mark up over spot on this? And how hard to gage a reasonable selling price after refinery if supply is not of decent stand/ price not reflecting standard?

4)Price so how much markup over spot would a bullion investor accept for quality garranteed silver in Thailand? 5, 10%

5) Tax?

Maybe the tax will make it unatractive; however people do still buy silver bullion in UK at an 8% mark up + 20% VAT!

6) if successful maybe a thousand Thai manufacturers can copy me? But keys to my success over another would be honesty and quality, but probably others could do the same but being first may help and having the marketing and resources to ride through competition. Probably space for more than 1 product since there are many bullion options on another countries dealers also.

Other question:

1)what is cost of equipment/ set up

2) cost of bars or coins design and moulds?

3) technicals I've not thought of?

4) I have read that margin business like this or gold shop/ gold trading work by hedging- but how exactly is it worked out and under taken.

5) what is the current competition? I hear in Bangkok it is possible to by international bullion; how is the cost and availability, resale price etc. I reckon shipping kilos from Switzerland must add a fair wack.

6) security and staff issues? I could potentially keep it in the family.

Comment;

I think over the coming years and decades gold and silver will play increasing roles in reserve investment and act as alternate currencies. Gold already has this role in much of Asia with gold shops and gold trading widespread. As the entry point for gold has increased and longer will continue to do so I think silver could be a popular alternative. My intention would be to begin small and start to build a reputation slowly over many years. I am a young man with decades ahead of me + two sons who could get involved later down the line, maybe grand children after that; I am thinking super long term here. Not just throwing a ton of money at a half baked sceem looking to get rich quick. I have other income to live comfortably; so this would not be a life risk or anything; also I would be living in Thailand anyway. So this is a business idea for profit and long term. I wonder how much time it would involve and how the returns could be.

All thoughts welcome.

Thanks

[mccw]

Knowledge and skills of course! Training available to lean testing and smelting of metals? Use of equipment; I don't have to pour every drop myself but should at least know plenty about it. Maybe a partnership with existing jewlars? But would like to know enough to ensure quality myself and be sure no corners were cut/ sneaky debasement going on. Maybe commissioning coins from my own moulds and then getting them essayed independently could be a way to avoid the initial set up costs, knowledge and quality issues, but the poduct cost maybe too great and maybe without personal smelting the scale to market make and deal with scrap could be missed? Or maybe out sourcing the dirty work is good? So long as quality is still assured.

Another idea is bullion/ vault secured storage with insurance

[Naam]

Another idea is bullion/ vault secured storage with insurance

a brilliant idea if the storage is located in a secure area of a secure and politically stable country such as... the northern part of Thailand.

[mccw]

Another idea is bullion/ vault secured storage with insurance

a brilliant idea if the storage is located in a secure area of a secure and politically stable country such as... the northern part of Thailand.

Err it would be for people living in Thailand who want their thier valuables on hand and access able. If they are purely interested in bullion storage with a view to sell back in to the market then obviously they could use Perth mint, guernsey mint, etc. but the inquisitive eyes of the tax collectors are getting ever more rigorous in all those "safe" havens.

Do you think it impossible or impracticality expensive to arrange insurance?

One can get house insurance so a properly built and gaurded vault must be able to I should think.

[koolbreez]

Silver is a world commodity, and bullion (99.999 percent pure) is traded on the open market through ligitimate dealers. The commission charged varies by the quantity you buy. You pay tax on the profit when you sell. There are world recognized producers of bullion that are freely traded, without it having to be re-tested, and melted down.

The next step down is stirling silver at 92.5 percent pure, and what most Thai jewelry is made from, and can be easily tested once you learn how.

If you melt down, and refine your own silver you will have a very hard time selling it, without the place you sell it to not wanting to remelt it all, and at a cost to you for doing this. You can make money buying scrap silver, and melting it down, but you have to know what you are buying 100% of the time, and have a refiner that will pay you market price (they always have a minimum number of ounces required to deal with them usually starting at 100, or 1000). The gold traders association in Thailand is a closed market to foreigners, as is the silver traders association.

The markets you should be looking at to buy from is new emerging markets, not long established markets like Thailand. Think Myanmar, and you might be able to make good money once you learn the metalergy associated with silver. Your next problem is related to import/export of precious metals to locations around the world. You won't be able to sell in Thailand at a profit, other than on market fluxuation speculation, unless your Thai wife's family is already involved in the metals market. It is even closed to her if she is not already involved.

What you are speculating about is nothing new. It is being done, and has been for a long time. The only new market is exporting out of Myanmar, and then only if you hurry to get it all set up.

[mccw]

Silver is a world commodity, and bullion (99.999 percent pure) is traded on the open market through ligitimate dealers. The commission charged varies by the quantity you buy. You pay tax on the profit when you sell. There are world recognized producers of bullion that are freely traded, without it having to be re-tested, and melted down.

The next step down is stirling silver at 92.5 percent pure, and what most Thai jewelry is made from, and can be easily tested once you learn how.

If you melt down, and refine your own silver you will have a very hard time selling it, without the place you sell it to not wanting to remelt it all, and at a cost to you for doing this. You can make money buying scrap silver, and melting it down, but you have to know what you are buying 100% of the time, and have a refiner that will pay you market price (they always have a minimum number of ounces required to deal with them usually starting at 100, or 1000). The gold traders association in Thailand is a closed market to foreigners, as is the silver traders association.

The markets you should be looking at to buy from is new emerging markets, not long established markets like Thailand. Think Myanmar, and you might be able to make good money once you learn the metalergy associated with silver. Your next problem is related to import/export of precious metals to locations around the world. You won't be able to sell in Thailand at a profit, other than on market fluxuation speculation, unless your Thai wife's family is already involved in the metals market. It is even closed to her if she is not already involved.

What you are speculating about is nothing new. It is being done, and has been for a long time. The only new market is exporting out of Myanmar, and then only if you hurry to get it all set up.

Thanks for the reply.

Just to clarify.

I was talking about making the market. Ie people can always buy and sell at any price and my profits would be from the margin under/over spot. Producing to bullion product for trade in the same way the branded bars are made and traded buy the gold shops.

You say -"There are world recognized producers of bullion that are freely traded, without it having to be re-tested, and melted down." I know this; but I haven't seen any for sale in Thailand and the "sterling silver" I guess it is , the beads they sell for jewlary I hear is not of consistent quality.

I hear that silver bullion from the international market can be arranged in bkk but is at a rather high premium. Maybe this would be best option for my personal investment. I just thought there could be a gap in the local market for a more reasonably priced silver bullion (of consistent quality unlike beads) which could be resold in to the local market in the same way the local gold is.

See goldline.co.uk and the guernseymint.co.uk both produce their own bullion and its widely accepted because of a long built up reputation and guarantee to repurchase at what ever the price.

Interesting information about the associations; I will look in to this further.

[mccw]

About Myanmar. You mean mining? Or local prices on bars or scrap is significantly less than global spot? So moneys made from exporting to sell in to another market at higher price.

The locals haven't been up to date with world prices or there aren't the buyers to take it off their hands? Could be worth a look in. But I'd have thought the Chinese would be right in there already.

[mccw]

Bit of a disappointing response.

Would any of the resident TV silver investors be interested in such a product or are you all content to buy beads? Or do you buy the imported bars mostly?

Cheers

[oldsailor35]

If one wishes to buy Silver bullion, what is the best way to do it and where should he go to buy ?

[mccw]

I just found this on a google search

http://silverprice.org/buy-silver/2009/04/buy-wholesale-silver.html

I don't really like the potential for rip offs in these bags of coins or beads etc, if you've been to Mai Sai boarder you can see all the fake history silver coins from china.

I heard one can buy imported bullion on bkk but I can't find any details through web search. Does anyone have some links to share please?

[mccw]

Thanks for sharing your experience VIBE. These import problems are kinda what I'd expected; this is why I wondered if a Thai made/ branded bullion coin or bar could be a popular alternative as it seems there is an investment demand; I should think quality assement to international standard could be reach and independently verified; reputation and acceptance built ip over time. But maybe its not worth the bother if these beads can be bought and sold just as well locally. How is the spread?

Cheers

Edited December 17, 2012 by mccw

[mccw]

A bit of trivia- It seems bhts are made of nickle and come from Wales :

http://www.walesonline.co.uk/business-in-wales/business-news/2012/05/14/6m-thai-coins-deal-for-llantrisant-s-royal-mint-91466-30964587/

[mccw]

This is interesting history of Thai money and coinage:

http://www.royalthaimint.net/index.php?option=com_content&view=article&id=160%3Athai-coins-history&catid=44%3A2010-03-27-17-09-13〈=en

Edited December 17, 2012 by mccw