How does a bullion dealer or coin shop make money?

People often picture one business when they hear “gold dealer”, but a storefront may run three or four. Each has its own customers, its own risks and its own way of earning. If you are looking at one to buy, or trying to explain yours to a buyer, start by separating the lines before talking about the total.

Bullion trading on the spread

A dealer buys bars and rounds from customers at one level and sells them at a slightly higher one. The gap between the two is the dealer’s earning. It depends on volume, on how fast stock turns and on how the metal market moves while the dealer holds it. Ask how the dealer manages stock that is bought before it is resold.

Collector coins and stamps

Numismatic and stamp sales work differently. Collectors look at condition, scarcity and history, not only metal content. That makes grading, knowledge and reputation central. Ask who does the grading, how slow-moving pieces are handled and whether regular collectors would stay with a new owner.

Scrap gold and other services

A “we buy gold” counter takes in jewellery and scrap from the public and sells it on to a refiner. Many shops also earn from appraisals, consignments and show tables. Ask which refiners the shop deals with, how settlements work and whether those arrangements are in the business’s name. A seller can walk you through each line with the records behind it.

A shop with loans as well follows a different model, which our page on how a pawn shop makes money explains.