Silver Premiums of the 7 Most Produced Coins Compared
Premiums are frustrating for most of us but are also a necessary evil. Many of the coin shops or online retailers we frequent have to make a profit in order to pay the bills. The question we all think from time to time is how much is too much...
In order to answer that question, we need to calculate some simple math. What I have done, is taken one of the biggest online retailers and calculated the cost per coin and breakdown of premiums so that you get an understanding of cost analysis per coin. I also took the liberty of comparing cost with other retailers and there was only a margin of a dollar or two for each of these coins showing that this trend is pretty much industry standard. I think you will be surprised at some of the things I have uncovered.
Here is how I got my formula. I took a common denominator in order to solidify purchases evenly. That number is what is offered in a monster box. 500 - one ounce silver coins. In doing that, I broke down the cost per coin by tabulating price points based on sold quantities and then subtracted the spot price during these tabulations of $22.19 per ounce. This leaves us with the premium breakdowns based on sold amounts. The results, as I said earlier, are very interesting.
Let’s start with many of your favorite, the American Silver Eagle. We have seen in premiums soar higher than eagles in recent days and our calculations mirror that. When Spot for an ounce of silver is at $22.16, this bird flies for sale at $36.15 if we were to purchase 500 ounces. When we subtract spot price, we are left with a premium of $13.99. That is very high. What is more interesting is that normally we are rewarded for buying in bulk by having more of a discount but we see this is not the case.
If I were to buy 500 ounces but do it in tubes of 20, I would be paying $36.65 per coin and have a premium of $14.99. If I were to purchase a monster box of 500 ounces, I would pay $39.41 per coin with a premium being $17.25. As you can see, The price goes up when you buy tubes or a monster box. This being said, If you are in the market to make a large purchase of Silver Eagles, It may be better to buy individual coins in quantity rather than tubes or a Monster box.
Do you think the neighbors to the North did any better? Let’s see what I found. If you wanted to buy 500 individual ounces of Silver Maples, you would spend $31.16 per coin. With spot remaining at $22.16, that leaves us with a premium of $9.00. This is far under the silver eagle but does the trend of bulk costing more prevail here as well? If I were to purchase 500 ounces by buying tubes of 25, I would be charged $32.15 an ounce, increasing my premium to $9.99 a coin. This is more of an increase than the eagle by almost 50 cents.
This retailer also sells Maples in boxes of 100 which will land you a whopping $36.15 a coin which is the same as the American Eagles with premiums at $13.99. There is one saving grace however. The monster box of 500 ounces would cost $30.65 a coin and the premium would be $8.49 which is the lowest form of purchasing maples in this quantity.
Australia has a mass produces coin that I often thing is undervalued and overlooked when it comes to world bullion coins. The Kangaroo has much less demand but is made of .9999 silver and honestly is great looking. This lack of demand seems to effect the premium which I find interesting. If you were to purchase 500 single ounce Kangaroos it would cost you $27.65 at our standard spot rate.
This is a premium of just $5.49 per coin and is miles better than the silver eagle. You can also purchase these in tubes of 25 which will come in at $29.75 a coin or a $7.56 premium when purchased in quantities of 500. This is a value steal compared many of the mass minted coins.
How about the might of Britain. Do they offer a better price on their Britannias? Single coins purchased in a quantity of 500 would cost us $29.75 which would be a premium of $7.56 a coin if spots were $22.19. If I were to make the same purchase quantity but did it in 25 coin tubes, I would pay $32.15 per coin with a premium of $9.96 a coin.
Now we move to the most ridiculous finding. The Libertad is often considered one of the most beautiful and desirable coins so I looked it up as well… If I purchases 500 single coins with spot at $22.19 I would pay $67.16 an ounce… That is a premium if 44.97 and is just stupid. If I bought the 500 using tubes of 25, I would pay 64.16 which is surprising.
The premium dropped three dollars when purchasing them in tubes. This is odd because it goes against the trend and the fact that they can sell Libertads for that much over spot makes my face hurt.
The Krugerrand brings us back to a more realistic option. 500 single coins would cost $29.95 a coin which is a premium of $7.76 per coin. We see a 10 cent hike in premium with purchasing in tubes of 25 but see a drop in premium if you get the monster box which is $6.86 a coin. This means the monster box is the best option if you are dropping loads of money on Krugerrands.
Our last option is one that surprised me. I would have thought the demand for Philharmonics would have been that of Britannias but either it isn’t or this dealer is offloading these coins.
We have the Philharmonic coming in a $27.65 a coin if I purchased 500 individually which is a premium of $5.46 and the tube option of 20 would be $28.65 a coin which is a premium of $6.46.
This means, if price is the number one indicator of your purchasing, the Kangaroos and Philharmonics are the best option for you. If you think that American Silver Eagles are the only way to go, you are going to pay a lot because others apparently think so too.
This is all interesting information but leads me to believe that market demands for particular coins is more valuable than the silver its self at times seeing that some premiums are more or almost more than spot price.
So how much is too much premium? That is a good question. My research indicates that the company I selected for this project was formed in the early 2000’s and now has an estimated valuation of 2-5 billion dollars. They have an estimated 500 employees and if I were to say an average salary is $65,000 a year, that means that it would take thirty MILLION dollars just to cover payroll.
This being said, premiums are needed to improve the means in which we purchase coins. It is my hope that in time, these companies will be transparent and honest about their premiums so that we, the consumer can understand and support those who we value to trade with.
