Does Anyone Know Why Amazon Has Terrible Prices On Precious Metals?

[james.hendrickson]

Hi All,

So on Monday I bought something like 35 grams of silver on Amazon.com. Why? I had some Amazon credit that was burning a hole in my pocket. I ended up paying something like $100 bucks for silver that was worth maybe $25 or $30.

At the end of the transaction I was "wait..what the heck did I just do?" I wasted like $70 worth of value.

So I'm scratching my head and asking myself..why the heck are the prices for precious metals so bad on Amazon? The only thing I can think of is that Amazon is charging its sellers crazy fees to pad their margins and in return, the vendors need to pass the fees onto their customers.

Anyone sold on Amazon or have any ideas why this might be the case?

[disneysteve]

I don’t know about precious metals but I stopped selling on Amazon years ago because the fees were nuts. I sold books and sometimes the fee was more than I had gotten for the book so I actually lost money selling it there. People complain about eBay where the fee is 12.9%. Clearly they’ve never sold on Amazon where the fee can exceed 100%.

Sorry you had an expensive lesson. Buyer beware.

[ua_guy]

I'm surprised/not-surprised that Amazon sells precious metals. LOL. That seems like a very odd purchase. Hey, can I get a bar of gold delivered, Prime, 2-day?

[james.hendrickson]

I'm surprised/not-surprised that Amazon sells precious metals. LOL. That seems like a very odd purchase. Hey, can I get a bar of gold delivered, Prime, 2-day?

Actually...they seem quite happy to charge you massively high prices for precious metal coins...like these ones are going for more than 100k.

I just want to add a quick comment here...you can still get a house in some parts of the country for 100k. While collectibles have a place in people's portfolio, these prices are seem excessive to me.

[bjl584]

I can't speak to precious metals specifically, but Amazon has terrible prices on a lot of items.
A lot of the things I buy are the same or cheaper at a brick and mortar store.
Motor oil comes to mind

[LivingAlmostLarge]

wowowow. I had no idea they sold such things and I would think it fake.

[myrdale]

Right now silver is $19 an ounce. It looks like most of the silver on Amazon is going for around $35. You're paying for convenience.

If you're interested in buying metals, I'd suggest finding a local coin dealer. I don't know the going rates, spot + 5% maybe?

[james.hendrickson]

Right now silver is $19 an ounce. It looks like most of the silver on Amazon is going for around $35. You're paying for convenience.

If you're interested in buying metals, I'd suggest finding a local coin dealer. I don't know the going rates, spot + 5% maybe?

Myrdale. Right. That's a total no-brainer. The thing is I had amazon credit and wanted to spend it something that would still be valuable in say 20 or 30 years.

[disneysteve]

Myrdale. Right. That's a total no-brainer. The thing is I had amazon credit and wanted to spend it something that would still be valuable in say 20 or 30 years.

That doesn't really make sense financially, though. You could have used the credit to buy some everyday stuff and used the cash you freed up to buy silver at a decent price. If you paid $100 for $30 worth of silver, in 30 years you might still be in the hole.

[myrdale]

That doesn't really make sense financially, though. You could have used the credit to buy some everyday stuff and used the cash you freed up to buy silver at a decent price. If you paid $100 for $30 worth of silver, in 30 years you might still be in the hole.

I think this is considered the found money fallacy. Spending "free" money on something you normally wouldn't, especially if it doesn't make sense financially. I'd be willing to bet most people would be less prone to take $100 out of their pocket and buy a $30 coin.

Personally I would have held onto the credit until there was something I wanted to order from Amazon.

As is, silver will have to triple in price before you can get your money back. That said, I don't know that I would call $100 in silver an investment either way. I don't think I would even classify this as a luxury purchase, its more just a novelty or "stuff" purchase. There's nothing wrong with that, we all do it every day.