Is it a Good Idea to Sell Krugerrands to a Dealer?

1/2 oz gold krugerrandCollecting gold bullion coins can be a rewarding and potentially profitable hobby. Coins have been a store of value for thousands of years, and gold has been at the forefront of that stability. With the world commerce we have today, collecting foreign coins is a simple matter. It’s not uncommon for a collector to have Chinese Gold Pandas, American Eagles and even a Canadian Maple Leaf or two in a safety deposit box. But what about when it’s time to sell? Should you sell Krugerrands to a dealer?

The short answer is… it depends upon a number of factors. To begin with, are you knowledgeable about the value of the Krugerrands? Do you have ready access to a dealer? Know the postal regulations of shipping if you’re going to send your gold bullion coins through the mail?

The first, and most important factor, is to know the value of the Krugerrand. If you don’t know what your coin is worth, you’re MUCH more likely to be taken advantage of. Fortunately finding Krugerrand value is not difficult, particularly if you have access to the internet. In a pinch, you can even make an educated guess by using a newspaper and getting the spot price of gold. The majority of the value from a typical gold bullion coin comes from its underlying gold content. The rest of the price is made up of a premium, to cover mintage, shipping, and of course profit. Knowing the gold price will give you a good baseline of what the coin is worth. Note that special coins will fetch a premium, for example a proof coin will bring a much higher price due to its limited mintage, and special handing during the mintage process (polishing the blanks and dies, stamping multiple times, etc). It’s important to know if your coin is one of these special cases- they are usually encased in plastic and graded by a coin certification service, or in the case of proofs come in a special display case with a Certificate of Authenticity.

Finding a dealer is less of a problem. If you can find one locally, you have an advantage, as you can visit them directly with your coin, and get an on the spot price estimate. This should serve to confirm your own research on the value of the coin, and give you an idea of what the profit margin the dealer is looking to make. Please understand that this is a business, and you’re not going to get 100% of the coin value from the dealer, remember they’re looking to make a profit too. That being said, if you receive an offer that’s half the value of the coin, feel free to vote with your feet. A business transaction should be mutually beneficial, and when you sell Krugerrands both parties should benefit.

Here’s an important tip. Do not sell your Krugerrand to the first dealer! This may be tempting to take your profit and go, but try to talk to at least three dealers. If you don’t have three dealers in the area, pick up the phone and call some out of the city, or even out of state. This ensures you get an accurate representation of the value from several different sources.

Finally a good knowledge of postal regulations is important, if you ship your coin. Did you know if you send it priority mail, insured, the most reimbursement you’ll get back if it’s lost is $15!! According the the USPS Publication 122, “For negotiable items, currency, or bullion, the maximum indemnity is $15” What that means is you absolutely, positively want to send it registered mail, signature required.

So should you sell Krugerrands to a dealer? The are a number of reputable and knowledgeable dealers out there, with a little research and planning on your part, there’s no problem selling to a dealer. However, we have had a great deal of success selling on eBay, and that’s something you may want to consider as well. The ideal situation is to do your research, check online and locally, and then choose the best option to maximize your profit.

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