For any silver investor, the primary goal is to buy silver products for a price that is as close to the actual value of the silver in the bar. In most cases buying a bar at or under the spot value of the silver in the bar is near impossible. In fact, the price over spot value that you are paying may not even be as it seems because shipping and handling fees can bump up the bottom line you pay.
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To that end, buying silver bars in bulk quantities can help you avoid shipping and handling costs altogether. Every dealer’s shipping, handling, and insurance policies are different so it is important to know how things work on the site you are buying from before you actually make a purchase; don’t assume anything.
Adding to the Spot Value
When purchasing small quantities of silver bars the shipping that your precious metals dealer charges you matters a lot because many dealers try to increase the shipping price just to get a few more dollars out of you. This is a truly unfortunate circumstance because some of these dealers are so sneaky that the person making a silver bar purchase does not even realize the overstated shipping cost until it is too late. Also, when making a purchase you should always take into consideration the shipping costs because many people have no idea how much it actually costs to ship their products.
A simple example can illustrate just how shipping prices can increase the amount of money you pay over spot value per ounce by half or more. For example, let us say that the spot value of an ounce of silver is $30, and the cost of one ounce on Silver Selling Site X is $32, meaning you are paying $2 over the spot value per ounce.
If you purchase ten ounces of silver at $32 and shipping costs are $10, you are actually paying $3 over the $30 the silver is worth per ounce (basically $1 in shipping fees added to each ounce you buy). This extra dollar per ounce may not seem like a lot for this example, but as the quantities get larger the amount of money you are forced to pay in addition to the value over spot you are already paying can sometimes evolve into quite the inconvenient fee.
Bulk Orders and Free Shipping
After reading the previous section it may dawn on you that purchasing small quantities of silver may not be the best way to make the most of your investment money. Instead, you can take the route that many other investors take and purchase bulk quantities of silver in order to not only save money on each ounce of silver you buy, but to also potentially avoid shipping, handling, and insurance fees.
Many online silver and gold dealers are willing to reward customers who buy hundreds and thousands of ounces of silver bars or a certain dollar amount by covering shipping and insurance costs for that customer. This is not only to benefit loyal and serious customers, it is also for the purpose of urging investors to purchase larger quantities of a given precious metal.
Highly reputable online silver dealer JM Bullion, for example, does away with shipping costs if your order exceeds $2,500. Now this may seem like an large amount of money to spend on a silver investment, but in reality it makes much more sense to buy hundreds of ounces of silver than it does to buy just one or two single ounces.