You have done your research. You have listened to the experts. It is time to make your first purchase. In fact, whether you are a first-time investor, or a seasoned purchaser, due diligence on the seller is vital. Below is a list of due diligence questions you should consider before making an online purchase of silver, gold, or platinum.
- The Standing of the Seller in the Dealer Community
- Online Reputation and Track Record
- Buy-back Policy
- Fly-by-night Profiteer or Educator
- Discreet and Full Insured Shipping
- Delivery Time
- Product Quality and Guarantees
The Standing of the Seller in the Dealer Community
Check the organisations with which the seller is registered. For example, if you are purchasing gold Krugerrands, is the seller a Rand Refinery registered purchaser or a primary dealer. Since the Rand Refinery (RR) is the sole distributor of gold bullion Krugerrands, including silver, buying from a RR authorised dealer will give you peace of mind knowing that your purchased Krugerrands come directly from the manufacturer.
If you purchase an SA Mint product, it is ideal to purchase from a dealer who is a registered re-seller for the SA Mint. Again, this ensures that the product which you purchase comes directly from the manufacturer.
The above is not to say that you should not purchase precious metals from secondary dealers or the secondary market. But there are certain guarantees that you will receive from authorised dealer, all of whom have been thoroughly vetted by the Rand Refinery and the SA Mint.
If you purchase from Silver-sphere, your will have purchased from an authorised dealer registered with the Rand Refinery, the SA Mint, the South African Numismatic Dealers Association (SAAND).
Online Reputation and Track Record
Buying on-line is the way of the future. But this can be stressful to buyers, as there are many businesses that operate on-line that have a bad reputation. Always check the online reputation of the person or company from whom you intend to purchase. There are a few places to do this. The most important is Google. If you are purchasing from a registered company, check the ratings and reviews of the seller on Google. Read some of the reviews to get a feel for what the investor community is saying about the seller. Look for key words such as pricing, trust, speedy delivery, service, and advice.
You may also wish to check whether the seller is a registered seller with Bid or Buy (a trusted online platform), and if so, how many successful sales has the seller completed, including the ratings given by purchasers.
If you purchase from Silver-sphere, you would be making the wise choice as have many clients who’ve given us a perfect record on Google, Facebook, and Bid or Buy.
Buy-back Policy
Check if the seller/dealer has a buy-back policy. In other words, can you count on the dealer to buy back the silver and gold bullion should you need to liquidate your purchase swiftly? Moreover, is the offered buy-back price fair? Someone who sells you an ounce of silver for R350.00 (the market related price as of the writing of this blog), but offers the spot price (R245.00 per oz) for a buy-back a few weeks or months later (assuming that the spot price and the exchange rate have not changed significantly since the initial purchase) should make you think twice. So look for a fair sell/buy spread.
If you purchase from Silver-sphere, and you wish to sell your bullion in the future, you will experience hassle-free buy-back policy paying you the best possible prices.
Fly-by-night Profiteer or Educator
There are numerous sellers within the industry (both individuals and companies) who are in the precious metals industry to make a quick profit with little or no after-sale customer service or support. Given the online nature of the precious metals market, it is very easy for enthusiastic investors to fall for a clever marketing trick. It is even easier to fall for a sales representatives’ sales pitch and buy the wrong product. For example, a prospective bullion investor may wish to buy low premium bullion but wind up buying high premium collectible or numismatic coins. Bullion and numismatic coins are in two very different categories of precious metals ownership, but those who are in the industry purely for profit may not care to educate and explain such issues clearly to investors.
On the other hand, there are dealers who take the time to educate investors in various aspects of precious metals ownership. The spend time talking, ‘consulting,’ and writing about the various issues faced by both new and experienced investors. Such efforts make these sellers stand out as they work to build a lasting relationship with each client. They are not fly-by-night sellers.
At Silver-sphere, we have undertaken to make your life easy and simple by publishing numerous blog articles addressing the various questions investors may have about purchasing silver and gold. For example, in addition to blog articles, you would find valuable information (two dozen articles) in Joy Magazine. While resources on-line are plenty (e.g. Mike Maloney), our articles and publications are relevant to the South African investor context.
Discreet and Fully Insured Shipping
Each time a buyer makes a purchase that requires shipping, the risk of theft or loss is present. Purchasing from non-established dealer tends to mean more risk for the purchaser. The nature of the risk may be lack of adequate cover, administrative delays in case of a claim, or even over-priced delivery costs. Such lapses in business model usually mean that the risk of purchasing precious metals is much higher compared to established and professional dealers.
At Silver-sphere, we have more than adequate cover for all shipments with a third party, same day or over-night delivery that is safe, discreet, and quick.
Delivery Time
The industry standard for a purchase delivery seems to be between three and five days. While this is acceptable, sellers without a solid relationship and agreement with a professional courier company, as well as solid administrative processes for sending and tracking deliveries, may struggle to meet the expectation of their clients.
At Silver-sphere, we have come to understand that the most stressful part of any on-line purchase is the interval between paying and receiving the goods. While a 3-day delivery time is tolerable, we strive to make this period as short as humanly possible. Typically, our Gauteng based clients receive their purchase the same day that funds clear, and those who live in other parts of South Africa (main cities and towns) receive their delivery the next day.
Product Quality and Guarantees
It is very imperative that precious metals buyers are aware of the quality of the silver and gold purchased from buyers. Often, sellers will sell bullion coins (especially silver) that are not in brilliant uncirculated condition (BU). This means that the coins are not new, but pre-owned (secondary market). While ‘silver is silver,’ the quality of the silver is a factor when buyers want to offload and re-sell their bullion. Coins with scratches, fingerprints, and discoloration (due to the natural oils on the fingers) will fetch a lower price than un-handled coins. Often, buyers are under the impression that they are purchasing brand new bullion coins but receive second-hand bullion.
More importantly, endure that the dealer/seller offers some guarantee that the product that they sell is not only in the claimed condition, but that the stock is genuine and not counterfeit. Experienced and seasoned dealers are almost never caught pout by fake bullion, because they deal directly with the manufacturers and other authorised dealers.
If you purchase from Silver-sphere, you can rest assured that as primary dealers with the Rand Refinery and SA Mint, your stock comes directly from the manufacturers. Moreover, we have certificates of origin for all our international purchases, so you can shop with confidence knowing that our range is fully guaranteed in terms of quality.
If you have any further concerns or questions, please do not hesitate to make contact with us; 0835612375 or sales@silver-sphere.co.za
