Making money buying and selling scrap gold and precious metals can generate substantial income. Whether you have an existing business or want to set up a new business, this type of business is a proven income generator.
In today’s economic environment, this type of company makes the most sense. Start-up costs are minimal, and with a good online training course, you won’t have to endure a long learning curve. You will get a quick return on your capital and time investment.
The economy has taken a big hit and many find themselves in a situation where they have to get money fast. They will sell their gold and their jewels; even pawn your other assets to meet current demands.
This business may be conducted in a store or other physical location or may be established through solicitations through Craigslist or advertisements in local newspapers. Some even host “golden parties” where prizes and profit sharing reward you handsomely for your effort.
Advertising for your business can take the form of area flyers, handing out business cards, creating a website that targets local traffic, and working with local businesses.
Scrap gold, silver, and jewelry can be found at estate sales, flea markets, garage sales, church sales, and fundraising events hosted by many organizations. Even a box of computer CPU can fetch several thousand dollars once refined. Gold and silver scrap, like industrial scrap, dental scrap can turn up anywhere.
Competitive buyers typically bid 40 cents on the dollar, allowing you to bid much higher and still maintain a reasonable profit margin. However, it takes knowledge to identify which types of parts will fetch the best money and the factors to consider and meticulously test to be over 99% sure of the quality you are offering to purchase.
Some of the information that you require at your fingertips is:
1. Metal Test Formulas
2. Tables of Weights and Measures
3. Top Paying Refiners
A word about the word “karat” as in 24 karat gold. “Karat” is a variant of “karat”. The FTC has standardized the karat markings used within the United States and items 10 Kt and over require a “K” or “Kt” stamp. Decimal marks are also an option.
Scrap carat percentages of gold value must be clearly determined through infallible testing methods and using proper formulas and precise weighing scales. Purity is commonly measured and carat nomenclature is used. 100 percent pure is 24-karat gold and is the softest gold. It is not generally used for jewelry making due to this softness problem.
18-karat gold is 18 parts of gold to six parts of an alloy. This marked it 75% pure. Because it is harder and can take more punishment, it is often used in jewelry. There are 16 karat, 14 karat, and even 12 karat gold hallmarks. The FTC (Federal Trade Commission) requires that no gold jewelry sold in the United States be less than 10 karats.
When adding up multiple karat designated pieces, multiply the weight by the karat and divide by 24. For example, 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 metal equivalents added
24 karat gold 100.00%… Decimal equivalent = 0.000% parts of gold = 24 in 24
22 karat gold 91.60%… Decimal equivalent = 0.084% gold parts = 22 in 24
18 karat gold 75.00%… Decimal equivalent = 0.125% gold parts = 18 in 24
14 karat gold 58.5%… Decimal equivalent = 41.500% parts of gold = 14 in 24
10 karat gold 41.7%… Decimal equivalent = 58.300% parts of gold = 12 in 24
Grams and pennyweights are the common ways to measure the weight of gold. When it comes to troy ounces, one pound equals 12 troy ounces. This is the European measurement standard where the measurement system is based on fractions of 1,000, which is the number of grams in a kilo.
Then there’s the avoirdupois weight system that we Americans are familiar with, where one pound equals 16 ounces. This is commonly used in the United States to weigh just about anything except precious metals.
When weighing gold, use grams and pennyweights as the standard for measurement.
Below is a weight conversion table:
1 gram (g) = 0.643 dwt = 0.0032 oz t = 0.035 oz av
1 penny (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 avoirdupois ounce (oz av) = 28.3495 g = 18.229 dwt = 0.911 oz t
Gold testing kits use acids to determine the purity of gold. A test kit will have different acids for 10K, 14K, 22K, and 24K gold. A portion of the gold piece is scratched on a test stone where the time it takes for the acid to dissolve the impurities will be noted. If the solution leaves the scratch intact, it means that the object being tested is larger than the test acid used.
For bulkier items like chains and coins that could be plated, it’s best to score a deep notch and test the inside of the metal.
Platinum and white gold testing
Similar to gold, a scratch test is used. You will want to leave a large thick visible deposit to test about 1 ½ inches long. A drop of the test solution should be placed on the scratch and the color should remain bright white if genuine.
If the scratch is 18 karat gold, the material should change to a light bronze color in approximately 3 minutes. For 14 karat white gold, the residue on the stone should be gone within 15 seconds.
How to find scrap silver
Real silver, when found, is called sterling silver. You’ll find it by looking for markings like “.925” or the word “sterling” stamped on the item. There are many other brands from Europe or other parts of the world that you will need to familiarize yourself with by purchasing a course on scrap trading or reading books on the subject.
You can purchase a silver testing kit through a jewelry supply house to confirm that you have a genuine silver price. This is done by using a silver testing solution and a testing stone. A test solution is used with a stone, file, or test plate so that it does not leave acid marks on the silver. Silver or low quality items will turn green when nitric acid is applied to them due to the high copper content. Conversely, if it is made of sterling silver, the piece will turn a cream color. A small file cut is incised in an inconspicuous place so that the rest of the piece is protected from the acid test, however, a stain will remain.
90% to 100% = Creamy Color
77% to 90% = Gray color
65% to 75% = Light green color
refiners
You will want to locate the highest paying refiners to work for. Refineries take a small percentage for their services and you will want to look for those that are reliable and pay the highest percentage.
License
Ask if a license is required in your state to conduct this type of business. You may want to have a legal structure for your business to avoid potential litigation issues and use the tax benefits that come from running your business. A simple LLC formation for a cost of around $100 will do the trick. You will want to obtain a federal tax identification number in addition to registering your business with the state.
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