To answer this question, we asked a staff member to become a “secret shopper”. Their mission was to call two other companies to find out what they would charge and how they explained their pricing models to purchase one-ounce American Gold Eagle coins. Getting the answers turned out to be much more difficult than we expected.
We Try to Do a Price Comparison
His first call was to a recently formed competitive company (Competitor #1) that is advertising heavily.
When we called them, we were told that any prices we would be quoted could only be approximate, because they didn’t know exactly what spot would be when our order was processed. Before they would confirm an order for us, an account would have to be opened and funded.
Once that was done and we were ready to place an order, we were told that Competitor #1 would add a 5.9% premium to the available price of gold for American Gold Eagles. We would also need to tell them whether we wanted our coins shipped to us or stored by them. Either way, there would be a small additional cost for the service.
Our next call was to a precious-metals company on the East Coast (Competitor #2). It wasn’t easy to get a quote, but we were finally told that Gold Eagles would be 6.25% over available price. On a second call, that number was lowered to 6.0%. Our secret shopper later reported, “It took me 30 minutes of prying to get some actual numbers. And I suspect that they aren’t completely accurate. I was told they acted as a broker and could not quote prices because they had to ‘shop around’ first.”
Frankly, we don’t think it should be this difficult to get a quote for your precious-metals purchases. Our goal when you call EverBank World Markets is to provide a level of detail you need to make a decision with the transparency you should expect.
Three Questions You Should Always Ask
Before purchasing gold coins from any company, including EverBank, there are three questions we strongly recommend you ask. Knowing the answers ahead of time will go a long way toward helping you make a wise decision.
1. Know the total cost. Be sure to find out the total cost of your new coin purchase – including Available metal price, fabrication fee, and their commission or fee. And if you decide to have them delivered to you, make sure you get the exact cost for shipping and insurance broken out separately. It can be surprisingly difficult to get the information you need to do an apples-to-apples comparison.
2. Get it in writing. Will they back up their quote by putting it in writing? If they plead that they’re “too busy” to get you a final price now or they need to shop around and let you know what your price is after you’ve already committed to buying the coins, you should probably take your business elsewhere.
3. Ask if they will buy the coins back from you. When the day comes when you want to sell some or all of your gold coins, will this vendor buy them back from you? On what terms? Can you be confident they will still be in business? Get this in writing as well.
And finally, let me add one simple warning: Beware of anyone who tries to use “bait and switch” tactics on you. If someone tries to talk you out of buying bullion coins, but instead pressures you into buying “rare” coins, be very leery. Commissioned salesmen love such products, because the premiums are often many times higher than for bullion coins. But if your goal is to get the most ounces of gold for your money, stick with bullion coins such as American Eagles.
Buying Non-FDIC Insured Eagles from EverBank World MarketsFrom a transparency perspective, we believe the following method should be used to ensure apples to apples comparisons:
Shipping could also be included if you choose to have them delivered to your home. Shipping should be relatively comparable. We couldn’t get the other companies to quote shipping to us but our current shipping costs are 1.5% for gold and 2.5% for silver delivery.
With this equation in mind, here is how you should ask your coin supplier to quote your coin request. I’ve included our breakout at the time of this secret shopping experience:
Note, each company will charge a fabrication or dealer fee since they buy the coin from the U.S. Mint or another dealer. We like to quote it separately so you can see how low our own commission actually is. Adding them both together (which both competitors do), you can see that the 4.25% premium estimated by EverBank is the lowest in the bunch.
We’ll be happy to give you a quotation in writing. And to promise that we will always be ready to buy your gold coins back from you on very reasonable terms.
So, when you are ready to take the leap into buying gold or silver bullion coins, demand to get your basic 3 questions answered. And if you find that the answers aren’t quite what you are looking for, feel free to give us a call and we’d be happy to outline our pricing, put it in writing and buy them back if you’d like.