Buying Jewelry Scrap

Refining can be an important part of any jewelry store’s business.
If systems are set up properly, refining can help bring in business and improve cash flow. 

Use Refining To Bring In Business

Everyone has an old high school ring, a broken chain or an outdated piece of jewelry. Advertise that your store will give great trade-in values for jewelry that is turned in. It works successfully for many other businesses that take trade-ins of old cars, old bikes and sports equipment. When you’re in-between seasons and business is slow promote the fact that your customers can trade-in their old jewelry for cash to purchase new jewelry.

Use Refining To Improve Your Cash Flow

Don’t hoard your scrap gold, platinum, palladium and silver. Your goal should be to turn your scrap like the rest of your inventory, at least twice a year. Remember that scrap gold does nothing for you unless you trade it in and turn it into usable material or cash.

Find A Good Refiner

Hoover & Strong is the only refiner that challenges jewelers to split their scrap and test us against anyone else in the industry. Make sure the scrap is mixed as evenly as possible. If you only have one 10K ring and cannot snip it in half, pull the piece out. We have acquired many loyal customers through the split lot test because of our proven higher returns.

How Much To Pay Your Customer

The tables below are designed to give you a quick and easy estimation of what you can pay your customer when purchasing scrap. The tables equate to 75% of the actual metal value for gold, platinum and palladium giving you a 25% profit margin. The table for silver equates to 60% of the actual metal value giving you a 40% profit margin.

Using The Estimator Chart

If you do not want to go to the trouble of calculating the scrap value for a specific gold market, you can use the estimator and choose the gold market quoted nearest the actual market price. Example: If the gold market is $897/oz, choose the $900/oz column for convenience Remember, karats must be calculated separately when using the estimator.

THE CHART BELOW SHOWS SAMPLE PRICING ONLY - NOT LIVE PRICING!!

Formula:

Go to the column with the nearest gold market, go down the column to the karat row you need and this is the price per gram you should pay for the scrap. Multiply this number by the weight of scrap in grams and this is the price you should pay your customer.

Example: You wish to purchase 5.6 grams of 14k scrap ($/gram price) x (weight in grams) = payment to your customer. $12.60 x 5.6g = $70.56. You pay your customer $70.56 for the scrap, making you a 25% profit on the total value you have just purchased.

How to calculate payment based on actual gold market.

If the gold market is too far away from the prices quoted in the estimator, this is how you can calculate the payment, again based on 25% profit to you. Take the gold market in ounces and multiply this by 0.032151 to get the gold market in grams. E.G. if the gold market is $874/oz this is $874 x 0.032151 = $28.10/gram. Now take the weight of scrap in grams, multiply it by the karat factor in the “75% of purity” column, then multiply this number by the gold market in grams.

Example:

You wish to purchase 6.7 grams of 10k gold at a market of $874/oz (weight in grams) x (75% purity factor) x (market price in grams) = payment to your customer. 6.7g x 0.312 x$28.10 = $58.74. You pay your customer $58.74 for the scrap, making you a 25% profit on the total value you have just purchased.