Precious metals industry: Bullion dealer business models and selling strategies

The precious metals industry operates through a complex supply chain connecting sovereign mints, private refiners, wholesalers, and bullion dealers to individual investors. Dealers manage various operational factors, including direct relationships with manufacturers like the Royal Canadian Mint and the Royal Mint, inventory management, price hedging, secure storage, and insurance.

Investors must distinguish between the live spot price and dealer premiums, which cover these operating costs. When deciding whether to sell assets, owners of generic gold bars, American Eagles, or silver bullion often benefit from selling based on weight and purity relative to the current spot price. However, collectors holding rare, graded, or low-mintage numismatic coins should avoid selling to bullion dealers for melt value, as specialists or auction houses are better equipped to price rarity and historical significance.