Posted on January 06, 2022
When investing in precious metals bullion, you can choose to buy small increments from grams and fractions of an ounce to large boxes with dozens of ounces or even kilograms of bullion. Some people buy gold in tiny portions, while others prefer to purchase bullion in bulk.
And there can be quite a difference in price between smaller and bulk bullion purchases. Let’s discuss the issue and point out the advantages and disadvantages of buying larger quantities.
Bulk bullion refers to large quantities of physical bullion rather than individual pieces or small lots. There isn’t an exact quantity of bullion that qualifies as bulk, but this usually entails a consumer or business purchasing hundreds (or even thousands) of bars or coins in a single transaction.
People using the phrase are typically discussing a quantity of sufficient size to qualify for some sort of price discount.
The primary benefit of buying in bulk is the cost savings. Like wholesale purchases, buying bullion in bulk almost always means lower prices per unit. That translates to the lowest possible premium over the spot price of gold, silver, platinum, or palladium.
Another, sometimes-overlooked benefit is simply that a bulk bullion purchase means a large number of similar (or identical) items. Say you wanted to hand out special gifts to friends and family to celebrate a newborn – you might choose to place a bulk order for 100 2021 American eagle coins with the expectation of receiving 100 identical items. A bulk purchase seldom means “5 of everything you sell.”
Bulk bullion is cheaper, thanks to the forces behind economies of scale. In economics, this phenomenon is seen when output increases and production costs per unit decrease. Businesses have certain fixed minimum costs or fees associated with the production of each individual unit.
This means that for a smaller business with lower output, the cost per unit is higher, while a larger business doing more volume can spread its costs across a greater number of units. When those fixed costs are spread out, the price per individual unit starts to decrease.
In more everyday terms, think about it this way: Here at BullionMax, it takes us the same amount of time and attention to review, authorize, pack and ship an order for a single 10 oz silver bar as it does for an order of 100 10 oz silver bars. Our overhead, the amount of labor required to get your order to you, is fixed. (True, shipping does cost more, and we’ll need to use a more heavy-duty box.) Regardless, our cost to get your order into your hands is about the same whether you order a 1 gram gold bar or 200 Krugerrands.
We pass those savings onto you in the form of a discount. You pay a lower price per unit on nearly every item we sell when you order larger quantities.
Wholesale prices for bullion products are special prices given to customers who purchase larger volumes of bullion. Thanks to economies of scale, wholesale prices will be lower than typical retail prices. Remember, though, even wholesale prices are still higher than spot precious metals prices. Simply because spot prices don’t consider expenses like minting, shipping, storage, and insurance.
Wholesale prices sound great, but you can’t usually place a wholesale order online from the mint.
The U.S. Mint, for example, doesn’t even sell its bullion coins online. They’re only distributed through an official program (Authorized Bulk Purchase Program) available to licensed businesses involved in the numismatic coin industry, like coin dealers, banks, retailers, and credit unions.
To qualify, these businesses have to maintain continued compliance with the program, average a minimum of $500,000 in annual revenue over the last two years, and make two qualifying purchases per year totaling $20,000 or more. Furthermore, the U.S. Mint frequently places per-household limits on coin purchases (which is more or less the opposite of a bulk discount).
Similarly, Australia’s Perth Mint doesn’t sell its entire assortment of coins online.
This might not make much sense unless you remember that a mint’s primary purpose is to make coins. Their core competence is crafting exceptionally beautiful coinage. That’s a totally different sort of business than retailing! This is a big reason why many world mints are happy to rely on authorized distributors to handle logistics and customer service and focus on next year’s mintages.
The amount of money you save when buying in bulk varies by the particular product and quantity you order; in general, the more you buy, the more you’ll save. Buying bulk from the U.S. Mint’s Authorized Purchaser Program saves members anywhere from 3-5%. For individuals, a single 1 oz American eagle gold coin on BullionMax costs $1,932, whereas a purchase of 100+ coins would bring the price down to $1,917 each, a savings of $15 per coin (at the time of writing; prices subject to change).
The bulk discounts we’re able to offer vary based on many factors, including product availability, popularity, our current supply, and so on. While they do change, they’re always the best prices we can offer and still pay our bills.
Bullion products available for bulk purchase include gold, silver, platinum, and palladium coins (like the American eagle and buffalo, the Canadian maple leaf, and more), as well as various bars of different sizes. Usually, we offer bulk discounts on the most popular products in stock.
In most cases, bulk coins come in 1 oz (gold, platinum, and palladium) and 1 or 5 oz (silver) weights because those are the most popular. When we can, we offer bulk discount pricing on gold bars all the way from 1 g to 1 kg and silver bars 1-10 oz. Suppose you don’t see a volume discount available for a specific product you’re considering. In that case, that might mean we’re low on stock or simply that we’re already showing you our lowest-reasonable price.
Besides discounts, buying bullion in bulk has the added benefits of free or lower-cost shipping and the possibility of acquiring mint coins that are conveniently packaged in direct-from-the-mint monster boxes.
Monster boxes are special shoebox-sized containers used by several government mints specifically designed to transport and store bullion. Monster boxes also come sealed (or “mint-strapped”) with certificates of authenticity from the issuing mint, making them easier to recognize and sell. Many bullion buyers never even open the boxes, so they’re often bought and sold intact.
Monster boxes are, by nature, bulk purchases since they contain 50-500 coins each (depending on the specific mint and coin or bar). Furthermore, they are only available to authorized bullion dealers. Individual investors can purchase a monster box from a dealer like BullionMax.
In addition to the savings applied to bulk purchases, BullionMax offers free shipping on all orders over $199. We also provide shipments in sealed monster boxes for orders of 50, 100, or 500 units, depending on the bullion product.
This really depends on the specific product. One example of a bulk order would be ten or more Britannia gold coins, where the buyer would save $5 on each coin and receive free shipping for their purchase.
An order of just three 10 oz Valcambi gold bars currently qualifies for a $50-per-bar discount.
Remember, we keep BullionMax pricing updated in real-time, so the best way to see the requirements for bulk price discounts is to start shopping.