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n/a
deleted
84 Posts |
 Posted - 07/07/2008 : 10:46:35
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Okay folks, I developed this business plan in hopes that I would be able to hook up with a programmer/web-designer as a partner, as I know virtually nothing about setting up a website. Because this has not come to pass, and I lack the knowledge and time to get this idea off the ground, I've decided to "open-source" it: I'm going to publish the business plan here for any takers with the relevant knowledge and/or funds to try to launch it. All I ask in return is that whoever attempts to launch it keeps me updated about the progress, and acknowledges me as the originator of the business idea. Of course I have no way of enforcing this request, but my desire to see this market up and running at this point far exceeds my hopes for making any money through it.
If you do try this, just please let me know! I just want to watch it unfold and take off. I'd be happy to offer free consulting, or, in the spirit of open-source, the whole community here could talk about the idea "out loud" in the forums. Heck, if nobody here has the computing knowledge or knows where to get it, maybe we could even form a joint-stock and all become investors.
So, read the proposal, run with it, talk about it (tell me why it sucks if you think so), improve, etc. It's open-source capitalism. (note: this was written for the uninitiated, so feel free to skip ahead of the basics. Also, some of the tables/ charts did not paste in or got screwed up.
CoinBullionMarket.com
The Online Market for bullion-grade copper, nickel, and silver coins
CoinBullionMarket.com is a web-based, commodity-exchange style marketplace for trading standardized quantities of bullion-grade (“junk”) coins. CoinBullionMarket.com is not a coin or metals dealership; rather it is a market-maker website which links particular buyers with particular sellers, enabling safe and secure transactions between them.
CoinBullionMarket.com facilitates the trading of common, business-strike coins that have been drawn out of circulation due to their “bullion premium”- meaning the value of the coin’s metal content is greater than face value. These coins lack numismatic value-they are accumulated and traded strictly for their bullion premium.
CoinBullionMarket.com offers a quick, convenient, inexpensive and secure way to buy or sell standardized lots of these “commodity coins.” By creating a live, exchange-style, online marketplace, CoinBullionMarket.com establishes one reliable market price for various commodity coins, bringing efficiency and clarity to this niche market, and providing a convenient source of up-to-date information for coin hoarders, dealers, and speculators.
The Market
1. Copper pennies
A little known fact among the general public is that US pennies minted 1982 and earlier are 95% copper, containing about 3 grams of copper per coin. The mint began making pennies of copper-coated zinc (containing just 2.5% copper) late that year due to persistent increases in the price of copper. In mid 2005, the spot price of copper rose above $1.50 per pound, the price at which the old copper pennies would contain exactly one cent worth of copper. Copper has continued to rise, peaking at $4 per pound in April 2008, and hovering near that level still.
At copper prices somewhere above $1.50, it becomes profitable to pull copper pennies out of circulation, to either be melted down for copper or held in speculation of further price increases. At the current (May 21, 2008) spot price of $3.80/lb, a copper penny contains 2.5 cents worth of copper. This significant bullion premium on these older, yet still very common, copper pennies has launched a quiet, yet vigorous, cottage industry of copper penny hoarding, both in the United States and Canada (Canada debased its copper cents in 1996). Hoarders range from serious, highly capitalized operators who make use of specialized sorting machinery and develop relationships with several banks, sorting through thousands of dollars in pennies on a weekly basis and stockpiling copper cents by the ton, to idle amateurs who sort their weekly pocket change and occasionally pick up some penny rolls from the bank to casually “mine for copper.”
How big is this opportunity? Since 1959, when the design of the currently circulating US 1-cent coin was adopted, the US has turned out over 417 billion pennies. Over 158 billion of these were the full-copper cents made through 1982, for a total face value of $1.58 billion, and over 513,000 tons, of pure copper coins . At a spot copper price of $3.75, this represents a copper value of 2.47 cents per coin, for a grand total of over $3.8 billion in copper bullion.
Of course, not all of those 158 billion copper pennies are still in circulation; many have worn out or been hoarded out of circulation already. Moreover, hoarders cannot realize the full bullion premium based on the coin’s weight; scrap metal is bought and sold at somewhat of a discount from the spot price, to account for the costs of smelting.
Common estimates place the number of pennies in circulation at around 150 billion. Empirical reports compiled from the copper penny hoarding web-forum, realcent.com, indicate that around 25% of circulating pennies are 1982 and earlier coppers. This means there are around 37.5 billion copper cents still in circulation, waiting to be snatched up by the hoarders. The price floor for copper pennies, whether sold on eBay or online forums, is steady at 1.5 cents per copper penny, with prices approaching 2 cents each not unheard of. Conservatively speaking, the yet-to-be-realized bullion value from US copper pennies alone amounts to $562.5 million dollars.
The market for copper pennies will not end when the last copper cent is pulled from pocket change and hoarded away, however. The US government in late 2006 enacted a ban on melting and exporting US coins. All copper pennies that are currently being pulled out of circulation are either being directly stockpiled by the hoarders, or sold to other hoarders who speculate further increases in the copper price. Surely many, if not most, of these coins will be ultimately sold for scrap and melted down, if and when the melt ban is lifted. Yet this will not all happen at once; many speculators will withhold their copper pennies from the scrapping market in anticipation of future price increases. Moreover, since US copper pennies are uniform, consistent pieces of a known weight of copper, many speculators believe that a large portion of the coins will never be melted down, but will be used in informal markets as secondary media of exchange, or will continue in existence as speculative hedges against future inflation, much as “junk” silver does now, despite massive bullion premiums.
The market for copper pennies is large and as yet has hardly been tapped. It may diminish when the hoarding-out process has finally run its course, but there is likely to be a continuing need for a market-maker as hoarders and speculators decide to liquidate their hoards, and as new players make their own speculative bids.
2. Nickels
The story is the same for 5-cent coins, which we know as “nickels” because they consist of 25% nickel and 75% copper. US nickels currently carry a melt value—strictly the spot price of the metals multiplied by the weight of each in the coin—of 6 cents. This bullion premium is not yet substantial enough to elicit hoarding on the scale of copper pennies, but it has begun amongst those speculators who are more bullish on nickel. Nickels have the advantage over pennies of not requiring sorting- they have been made of the same cupro-nickel alloy since their introduction in 1866. A notable exception to this composition did occur during World War Two, when the nickel component was replaced with silver and manganese. There were about 884 million of these “war nickels” made, and their melt value is currently at $1 each. War nickels have effectively been hoarded out of circulation, although they are still occasionally found.
The nickel story gets really interesting, however, in Canada. Canadian nickels were pure nickel (100% Ni) from 1955 to 1981. These pure coins have a melt value (in US dollars) of over 10 cents each. There were xxxx billion? of these coins made, and they are actively traded at prices ranging from xxx to xxx. Canadian nickels made from 1982 to 1999 are similar to US nickels; while not vigorously hoarded as of yet, the market for them is likely to develop if metals prices continue their upward trends/ the US dollar continues its steady decline.
3. “Junk Silver”
The term “junk silver” refers to coins- in the US, dimes, quarters, halves and dollars minted prior to 1965- that have no numismatic, or collector’s, value, but are traded at a premium due to their metal content. They have been, essentially, completely hoarded out of circulation for many years, although circulating examples do pop up now and again. Many tons of these coins were reportedly melted, especially in the dramatic run-up of gold and silver prices in 1980. Yet not all, perhaps not even most, of these coins met the furnace’s fate, and they continue to be actively traded for their silver bullion value. There are highly active markets for junk silver- coin shops, online dealers, eBay, coin shows, etc. Prices are variable- a small discount or premium from current spot price, depending on the particular buyer and seller. There is as of yet no centralized, commodity-style marketplace, offering a convenient trading nexus and a spot-market price, for these or any commodity coins.
The Competition
As mentioned, there are active, and inactive yet potential, markets for buying and selling large lots of copper pennies and other commodity coins:
1. Scrap/Recycling –currently out of action due to the melt ban. If and when the melt ban is lifted, copper cents will be able to be sold to scrap dealers at the scrap price, …
2. Ebay
Ebay is currently the most active marketplace for copper pennies and hosts a massive junk silver trade as well (see below). On any given day there are likely to be 10 to15 active auctions for bullion-grade copper pennies, which are generally sold in lots of 5,000, or $50 face value. In the two-week period from May 12 to May 26, 2008, there were 26 successful auction sales of 5,000-coin lots of bullion-grade copper pennies.
Ebay copper penny 5,000 lot sales
2-week period from 5-12 to 5-26
date price shipping total
5/12/2008 81 10 91
5/12/2008 73 12 85
5/12/2008 74.99 11 85.99
5/12/2008 73 10 83
5/13/2008 72.01 9.95 81.96
5/14/2008 69.35 11 80.35
5/15/2008 112.5 10 122.5
5/17/2008 77 10.95 87.95
5/17/2008 76 9.99 85.99
5/18/2008 84.99 11.99 96.98
5/19/2008 66.59 11.95 78.54
5/19/2008 68.59 11.95 80.54
5/19/2008 68.59 11.95 80.54
5/19/2008 83.02 10 93.02
5/20/2008 76.97 10 86.97
5/22/2008 67.88 10 77.88
5/23/2008 87.91 9.8 97.71
5/24/2008 71 9.99 80.99
5/25/2008 72 9.99 81.99
5/26/2008 76 12 88
5/26/2008 77 12 89
5/26/2008 76 12 88
5/26/2008 71 9.95 80.95
5/26/2008 112.58 10 122.58
5/26/2008 70.99 11 81.99
5/26/2008 70.01 12 82.01
Mean $77.31 $10.83 $88.13
Stats (price only)
Mean 77.31
Variance 135.85
Std. Deviation 11.66
Median 74.00
Mode 76.00
Ebay offers a broad and fluid marketplace, but two major drawbacks make it a relatively poor place to trade commodity coins.
Ebay’s faults
1. Auction Format
Most coin auctions on Ebay run for one week. While the auction format means that diligent and patient buyers can occasionally get good deals, it also creates a great deal of uncertainty for buyers and sellers. While the lot size of 5,000 copper pennies has come to be the standard, nothing else about these sales is standardized: Prices and shipping fees vary steeply from day to day and even hour to hour, and method of payment, shipping time, and packaging vary by seller.
2. Fees
Ebay, and it’s online payment subsidiary, Paypal, fees take a severe bite out of all transactions. A seller of a 5,000 coin-lot of copper pennies will face an Ebay listing fee of typically $1, and then a “final value fee” of 8.75% of the initial $25.00 ($2.19), plus 3.50% of the remaining closing value balance ($25.01 to $1,000.00). If the winning bidder chooses to pay via Paypal (a payment option required by Ebay on all listings), he sacrifices a further 2.9% of the total payment (winning bid plus shipping charge), and a 30¢ surcharge, to the Paypal/Ebay conglomerate.
So, if a 5,000 copper penny auction sells for $75 with a $10 shipping charge, and the buyer pays through Paypal, the seller ends up paying a whopping $7.71 in combined Ebay and Paypal fees! This amounts to almost 31% of the sellers gross profit of $25. At these exorbitant rates, it is amazing that the commodity coin market is as vibrant as it is on Ebay.
Tyler Watts’ Copper Penny sales
Sale Date Copper Penny count High Bid
Cents per penny Total price Gross Profit Ebay fees Paypal Fees Total fees Net Profit Fee % of Total Price Fee % of Gross Profit
11/22/2007 2500 $36.00 1.44 $44.95 $11.00 $2.75 $1.60 $4.35 $6.65 9.68% 39.55%
1/17/2008 2500 $35.75 1.43 $44.70 $10.75 $2.61 $1.60 $4.21 $6.54 9.42% 39.16%
3/7/2008 5000 $103.05 2.061 $112.00 $53.05 $6.17 $3.55 $9.72 $43.33 8.68% 18.32%
3/15/2008 5000 $92.00 1.84 $100.95 $42.00 $4.93 $3.23 $8.16 $33.84 8.08% 19.43%
3/22/2008 5000 $95.00 1.9 $103.95 $45.00 $5.89 $3.31 $9.20 $35.80 8.85% 20.44%
4/20/2008 5000 $78.05 1.56 $87.00 $28.05 $5.29 $2.82 $8.11 $19.94 9.32% 28.91%
5/2/2008(off-Ebay) 5000 $75.44 1.5 $90.00 $25.44 na $2.91 $2.91 $25.44 3.23% 11.44%
Due to it’s auction format and extremely high fee structure, Ebay is far from the ideal marketplace for commodity coins.
3. Coin Dealers Coin dealers do buy and sell silver, and some may be starting to buy copper, although it is neither their ken nor their specialty, as they consider themselves numismatists, not scrap dealers. Their commissions/discounts vary according to individual business practices, leading to price variability within a certain range of spot bullion prices. The biggest limitations, though, is that they are dispersed across the country- not every town has a conveniently located dealer; they aren’t of uniform quality or reliability-how do I know my local dealer will deal squarely with me, especially given the spate of fly-by-night precious metals dealers?; and they have limited hours of operation, making them less than perfectly accessible.
CoinBullionMarket.com has advantages over all of these marketplaces. CoinBullionMarket.com is always open, charges very low fees for its services, and offers a single, centralized, true exchange-market setting for anyone wishing to buy or sell commodity coins.
Commodity coins are just that- commodities. They are homogenous, meaning any unit is readily substitutable for any other unit; if I’m looking to stockpile copper cents, I don’t care if my supply comes from Maine or San Francisco. This also means that the prices of identical lots should not vary at a given instant: a buyer should be able to come to the exchange and place an order for a standardized lot at the currently prevailing market price. A seller should be able to sell a standardized lot at the current price. Both parties ought to be able to place market, stop, and limit orders of varying duration, and have the machinery of the exchange automatically fulfill their trading plans.
There is no reason that commodity coins, being commodities and being actively traded for bullion speculation, should not be traded efficiently on a commodity exchange. Such a commodity exchange ought to be easy to use, safe and secure, reliable, and affordable-charging low and consistent commissions (proposed 2%). All of these aspects of the exchange, when properly executed, will make it, over time, into the premier trading market for commodity coins.
How CoinBullionMarket.com works
CoinBullionMarket.com (henceforward the “market”) is simple and efficient. Buyers and sellers register on the market’s website, giving credit card information as verification of identity and means of payment. Buyers and sellers will establish an account with the market, much like Ebay/Paypal. Registering will require buyers and sellers to read and agree to the terms of use and view the market’s rules and guidelines. Registration will cost a small fee, (perhaps $5), designed to recoup the initial costs of setting up the market. Buyers and sellers will enter the respective sections of the site: Buyers will be able to enter bids with the following options:
Order size: (number of 5,000-coin lots [copper; may be adjusted depending on market conditions])
Duration: (expiration date of order; options may include GTday [1-day only], GT30 [30 days], GT90, etc.)
Bid Type:
1. Market (buy at outstanding offer at or nearest to current market price)
2. Stop (becomes market order once market price rises to specified level)
3. Market if Touched (becomes market order once market price falls to specified level)
4. Stop-limit (specifies price range at which the trade will be executed)
5. etc.
Similarly, sellers will be able to enter their offers, in the same style format and with the order options corresponding to those available to buyers.
The computerized trading system will match bids and offers, much like any automated stock or commodity trading market.
Once a trade has been “closed” by the system, the buyer and seller will be notified via email, with a requirement, stated in the terms of use, that they will confirm the transaction by replying to the “sale closed” email. The market will then debit the buyer’s account for the total amount of the sale: closing price x lot size plus shipping charge, which will be set and agreed to per a pre-arranged schedule. The market will, essentially, hold these funds in escrow, pending completion of the transaction. The seller will agree to deliver the coins within a specified time frame (probably 10-14 days. Once the buyer confirms good delivery, the market will release the funds into the seller’s account. The market will collect a commission (proposed) of 2%- 1% from the buyer and 1% from the seller, on the total price of the transaction.
Currently, the shipping guidelines for copper pennies will require seller to ship the 5,000 coin lots via USPS priority mail flat-rate box, with its fixed domestic price of $9.80. Delivery confirmation will be required, and the seller will be required to post the confirmation number to the market, in order to adjudicate claims of non-delivery.
CoinBullionMarket.com Prospects
CoinBullionMarket.com will necessarily start small, and will take some time to establish itself and become a significant income-earning asset. But the need exists, and the market is extensive. Once the coin-hoarding and speculating segments become aware of, and then become clients of, CoinBullionMarket.com, the market will be set to become the place to buy and sell all commodity coins, from junk copper to junk nickel to junk silver, and anything else that crops up in the commodity coin world.
Marketing CoinBullionMarket.com
Marketing will begin with a simple announcement to the 560 hoarding-attuned members of the realcent web forums. Next will be an ad and/ or news story (via press release) at You must be logged in to see this link. the premier web site for tracking values of commodity coins. Ads may also be placed in certain numismatic publications, wesites, etc. as desired.
Word of mouth, via the various internet forums, will be essential for the growth of CoinBullionMarket.com, and its establishment as the premier marketplace for trading in commodity coins. CoinBullionMarket.com’s founders will be sure to “boost” the site vigorously at the various online forums.
Projections
Ebay averages 2 5,000-lot copper penny sales per day. There are 560 members of the realcent online forum, which includes a fairly active buy/sell/trade section. A conservative estimate, based on this and other web-site transactions, would add another 5,000-lot sale every other day. This would put the current daily market at 2.5 sales, 5,000-coin lots. If CoinBullionMarket.com could capture all of these sales, at an average final price of $88, the market would yield $5.28 per day ($88 x 3 x .02), or $1,927.2 per year. Combined with the initial year’s registration fees ($500 if 100 people register), the first year revenues might come close to covering the costs of launching the website.
Of course, the potential for serious income requires market growth. Market growth can be accomplished by tapping into the Canadian markets (copper and nickel), and the highly valued junk-silver markets.
At this time, the size of the Canadian copper and nickel markets is largely unknown due to a lack of data. It is probably safe to assume that, combined, they are at least as large as the US copper penny market.
The junk silver market, however, is where the vast bulk of the junk/commodity coin value is.
Recent Ebay sales of “junk” silver. Note: all results are based on searches for the terms “silver” and “roll,” within the respective categories, excluding terms which would indicate coins above the “junk” grade (e.g. “BU”, “choice”). Results are for the two week period, 5-12-08 through 5-26-08. Average price is a “visual” estimate (i.e. based on scrolling through the entire list) of the lower bound of the price range. Auctions with more than one roll are only counted as one roll, thus more than sufficiently offsetting the handful of single-coin auctions that these searches inevitably bring up.
Nickels (35% silver “war nickels;” excluded terms: BU, AU, choice, gem)
• 48 sales, 3.4 sales per day
• Lower bound price: $30 per roll/ $.75 per coin
• CoinBullionMarket.com potential: $30 x 3.4 x .02 = $2.04 per day; $744.60 per year
Dimes (Mercury, Roosevelt; excluded terms: BU, AU, choice, gem)
• 308 sales, 22 sales per day
• Lower bound price: $60 per roll/ $1.20 per coin
• CoinBullionMarket.com potential: $60 x 22 x .02 = $26.4 per day; $9,636 per year
Quarters (Washington only; excluded terms: BU, AU, choice, gem)
• 279 sales, ~20 sales per day
• Lower bound price: $120 per roll/ $3 per coin
• CoinBullionMarket.com potential: $120 x 20 x .02 = $48 per day; $17,520 per year
Half Dollars (Liberty, Franklin, Kennedy 90%; excluded terms: BU, AU, choice, gem, 40%)
• 387 sales, 27.6 sales per day
• Lower bound price: $120 per roll/ $6 per coin
• CoinBullionMarket.com potential: $120 x 27.6 x .02 = $66.24 per day; $24,177.60 per year
Dollars (Morgan/Peace, excluding: uncirculated, BU, AU, choice, gem, 40% Ike dollars and 1 oz bullion coins)
• 175 sales, 12.5 sales per day
• Lower bound price: $300 per roll/ $15 per coin
• CoinBullionMarket.com potential: $300 x 12.5 x .02 = $75 per day; $27,375 per year
Total yearly potential from Ebay US junk silver market at 2% commission: $79,453.20
Total yearly potential from Ebay US junk silver market at 3% commission: $119,179.80
Total yearly potential from Ebay US junk silver market at 4% commission: $158,906.4
This assumes silver prices stay in the $17-$18 range and the volume of silver sales stays constant. There is clearly large potential in the “commodity” or “junk” coins markets. There is a tremendous opportunity for a specialty trading website to move in and undercut Ebay’s exorbitant 8-9% fees, and create the one and only marketplace for trading junk copper, nickel and silver coins.
Advertising Revenue
CoinBullionMarket.com will be able to host adds that appeal to hoarders and commodity coin speculators, from coin dealers, financial analysts, political/news sites, etc.
[I currently lack a means of estimating potential advertising revenue]
Conclusion: Need + Niche = CoinBullionMarket.com
As the US dollar weakens, commodity prices stay high, or continue to rise. Rising copper prices will only speed up the pace of copper penny hoarding, inevitably expanding the junk copper penny market. Likewise with Nickel and silver- who knows how high they might go in terms of a falling dollar? If the dollar falls low enough, the zinc penny might well achieve a bullion premium and become a target of hoarding itself. Ebay and Paypal currently have the market for these coins cornered; attempts by individual hoarders to circumvent the exorbitant fees of this market behemoth suffer from a lack of vision and scale; they usually amount to one-off sales involving high levels of uncertainty and low efficiency. There is a niche waiting to be filled. The time is ripe for CoinBullionMarket.com.
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"Truth is treason in the empire of lies." -Ron Paul, from _The Revolution: A Manifesto_ |
Edited by - n/a on 07/07/2008 10:50:11 |
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Gr33nday43
New Member
Uzbekistan
10 Posts |
Posted - 07/07/2008 : 11:13:24
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Sounds very interesting, I have some computing skills. An idea would to not be to charge fees for registering. Also, a cool idea would to be incharge of charging the seller, you could charge the buyer 1%, and the seller 1% as well. At first I think we should start out with a free site, kind of like how forumco is right now. Donations would be accepted and this would help finance the new site. We could set it up as where no body can post, except us, except in a few forums. They would PM us with what they want to sell, and we would copy and paste it onto the appropriate forum, without their username(so no one can beat the 1% fees). A buyer would PM us, pay us the 1%, and we would give them the username of the seller. They would then finish out the deal. Cheating would be strictly prohibited, and since we can read PM's, it would be easily caught and whoever did it would be banned. PM me and we can discuss this more, it sounds really interesting and a good way to get away from all those ebay fees.
EDIT: The stock idea is horrible. Much, much, too complicated.
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Edited by - Gr33nday43 on 07/07/2008 11:16:10 |
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fb101
Administrator
USA
2856 Posts |
Posted - 07/07/2008 : 12:00:38
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| I also have computing skills. I second the motion of stock being a bad idea. I'm interested in hearing more. |
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Gr33nday43
New Member
Uzbekistan
10 Posts |
Posted - 07/07/2008 : 14:22:41
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fb101, what are you good at in computiong?
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 07/07/2008 : 15:58:14
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I can compute that a "Nickel" Nickel is worth a dime... but that is the extent of my computing.
Very well written analysis. I want to expand on the rational for the current pricing of bullion coins.
I think the real reason that the price of pennies does not approximate the actual bullion value is that there is too much easy supply => any American can go to any bank and get pennies to sort. There is a premium over face because copper pennies require some sorting work to find - so they are a little scarce, but not very. If/when there are no more copper pennies at the bank they would approximate bullion value more closely = like silver quarters do today.
This is why there is no premium for US CuNi nickels yet - they are plentiful, available at face from every bank and no sorting required yet.
Canadian Nickels are another good comparision. They are rarer in Canada (15% of circulation) the Cu pennies are in the US. They are not available at all in the US market from any US bank, and only a handful of dealers stock them. Therefore pure nickels sell for minimum bullion value and often a premium to bullion value. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
Edited by - jadedragon on 07/07/2008 19:10:42 |
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n/a
deleted
32 Posts |
Posted - 07/07/2008 : 18:58:08
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quote:
Originally posted by Economist
Okay folks, I developed this business plan...
Good job! Well considered and carefully constructed.
I've been thinking, for the past few weeks, about how difficult a project like this might be, and what might be the potential. I think it would be at least moderately difficult, perhaps slow to build to the point of providing significant ROI, but likely quite useful and profitable in the long run.
I don't know of any off-the-shelf software that would serve adequately, but some big pieces are available in the open-source world. I'll try to track down specifics when I have a chance, but those of you who are familiar with the process of application development might want to search the projects at freshmeat.net. I think the best keywords are "investment," "finance," "trading," "stock exchange," etc.
If I recall correctly, there are some libraries (written in C and Python, I think), that might provide much of the necessary functionality for an automatic exchange system. Of course, building a final product would still be non-trivial.
Fascinating idea. I'll be watching closely. |
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TXTim
Penny Hoarding Member
629 Posts |
Posted - 07/07/2008 : 21:16:43
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| The idea has merit with copper pennies but the junk silver market has quite a bit of competition that is not mentioned like several online bullion dealers and here in Houston a precious metal dealer who pays 5-10% under spot for any quantity. |
Beer is my currency. |
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Gr33nday43
New Member
Uzbekistan
10 Posts |
Posted - 07/07/2008 : 21:40:21
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Website is currently being worked on, but I will not publicly give out the address, as it is not near finished. Anyone participating in this activity, PM me for the url.
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n/a
deleted
84 Posts |
Posted - 07/07/2008 : 23:17:21
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TXTim,
Yeah, I know there's a whole bunch of dealers in the junk silver business, but there's still a huge junk silver trade on ebay. This business plan seeks to compete with ebay, at least initially. If it does become established as the place to trade bullion coins, then it might eventually take a slice out of that dealer market.
Gr33nday43- is your website a realtime exchange market?
-Tyler |
"Truth is treason in the empire of lies." -Ron Paul, from _The Revolution: A Manifesto_ |
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Gr33nday43
New Member
Uzbekistan
10 Posts |
Posted - 07/07/2008 : 23:43:54
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| Realtime exchange? Please PM me with details as to what you specifically mean. |
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daviscfad
1000+ Penny Miser Member
USA
1664 Posts |
Posted - 07/08/2008 : 09:16:05
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| I agree with trying to get someway to do away with the ebay fees. i sold some peace dollars the other week on ebay. and the final ending price was like 280 some dollars. by the time i paid my 2.9 to paypal, the shipping that i charged was gone. Brought me down below ending price by like 8 or 9 dollars. Then i get an invoice from ebay. you owe 27 something that was 10 percent of what i made so instead of sell my unc peace dollars for 17 a piece i averaged around 15.43. dont seem like much but still hurts |
Inquiring minds want to know |
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SANITARIUM_INMATE
Penny Pincher Member
211 Posts |
Posted - 07/08/2008 : 17:17:57
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"I think the real reason that the price of pennies does not approximate the actual bullion value is that there is too much easy supply => any American can go to any bank and get pennies to sort."
I agree with legacypac, once they copper pennies are hard to find for the public then the price in which they pay will eventually rise to that of current melt at the time. This is a great idea and I really hope it goes off without a hitch but fact of the matter is is that these commodity copper pennies are too easy for people to get right now. But we are trying to fix that everytime we go to the bank now aren't we? |
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fb101
Administrator
USA
2856 Posts |
Posted - 07/08/2008 : 20:43:59
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Have professionally done VB (many), C#, Java, JSP, PHP, ASP, Some ASP.NET, Sql Server, Some oracle, Sybase..more...
Serious question to consider: With this business plan doesn't this qualify as an exchange and come under SEC? |
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jpf231
Penny Collector Member
USA
340 Posts |
Posted - 07/08/2008 : 21:59:18
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| hmmm ... good point fb101 - this "exchange" could be subject to federal regulation. |
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n/a
deleted
84 Posts |
Posted - 07/08/2008 : 22:53:46
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| Yes, the idea is for an exchange market, so it may be subject to the SEC. My initial thought was that it would be a major sign of success if the thing ever got big enough to catch the SEC's attention. I would start off by just ignoring them and wait for them to come to me with some regulations. Never give a bureaucrat a chance to say no. |
"Truth is treason in the empire of lies." -Ron Paul, from _The Revolution: A Manifesto_ |
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CoinHunter53562
1000+ Penny Miser Member
USA
1805 Posts |
Posted - 07/08/2008 : 23:37:18
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quote:
I agree with trying to get someway to do away with the ebay fees. i sold some peace dollars the other week on ebay. and the final ending price was like 280 some dollars. by the time i paid my 2.9 to paypal, the shipping that i charged was gone. Brought me down below ending price by like 8 or 9 dollars. Then i get an invoice from ebay. you owe 27 something that was 10 percent of what i made so instead of sell my unc peace dollars for 17 a piece i averaged around 15.43. dont seem like much but still hurts
It's for these reasons that I dont sell on EBay anymore. They recently raised their fee structure and also barred sellers from leaving anything but positive feedback. When you throw in their listing fees, final value fees, and paypal fees in a market with slim margins like silver bullion trading, then it becomes basically a waste of time. Some sellers on Ebay, like wellston, will not take Paypal so that they arent taking a hit on the fees.
I would be interested in a new site for trading bullion if the fees were substantially less than EBay AND if there was a feedback system in place where you could reward good buying/selling behaviors and punish bad buying/selling behaviors. |
My hobby: collecting real money 1 copper cent or nickel at a time.
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n/a
deleted
32 Posts |
Posted - 07/08/2008 : 23:56:39
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quote:
Originally posted by Economist
Yes, the idea is for an exchange market, so it may be subject to the SEC.
Probably not the SEC. You wouldn't be trading in securities of any kind.
Since you wouldn't be dealing in futures or options, I don't think the CFTC would have jurisdiction, either.
There may be some federal agency with oversight authority, but I wouldn't worry about it up front. Just assume you can do what eBay is doing, in a slightly different format. |
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longhorn
Penny Sorter Member
80 Posts |
Posted - 07/11/2008 : 20:04:49
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Great plan! If you or someone can launch without to much outlay should work. I do wonder what potential $ revenue could be.
You said common estimates of circulating pennies are around 150 billion out of 400+ billion minted since 59. Any ideas of where 250 billion could be? I know there are a lot in the landfills but 5/8 of mintage seems high, particuarly when around 25% of circulating pennies are 82 and earlier.
There is a website called bulliondirect.com which trades 90% junk silver as well as other silver and gold for a 1% fee to both buyer and seller, plus freight. If you are not familiar with them you might check them out. All shipments are shipped into them and verified before shipping back out to the buyer. I think they maintain an inventory to facilitate this. |
Obey Gresham's Law |
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Saul Mine
Penny Collector Member
USA
343 Posts |
Posted - 07/13/2008 : 00:37:32
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quote:
I would be interested in a new site for trading bullion if the fees were substantially less than EBay AND if there was a feedback system in place where you could reward good buying/selling behaviors and punish bad buying/selling behaviors.
Negative! The only appropriate feedback for a buyer is "Payment received." And for a seller, "Delivered as described." Nix on the reward/punishment idea! |
A penny sorted is a penny earned!
Please use tinyurl.com to post links. Long links make posts hard to read. |
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CoinHunter53562
1000+ Penny Miser Member
USA
1805 Posts |
Posted - 07/13/2008 : 11:10:53
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quote:
Negative! The only appropriate feedback for a buyer is "Payment received." And for a seller, "Delivered as described." Nix on the reward/punishment idea!
Ok I see what you're saying but if you have a seller that doesnt deliver as promised or is slow or whatever, then how are the rest of the buying members going to know about this? Same for the flipside. This is the exact reason why so many sellers have jumped ship from EBay - they cannot leave negatives or even neutrals for those bad buyers out there.
From your point of view, I agree to an extent but some parameters would have to be put in place and I am not sure what those are. For example, if a seller's terms state "Items ship within 2 business days of receiving payment" and it's proven that the seller shipped two weeks after receiving payment, then leaving no feedback doesnt reflect this and leaving a negative may be too harsh as well. That's why there has to be some sort of feedback that reflects both the bad and the good as we all well know that it happens both ways. |
My hobby: collecting real money 1 copper cent or nickel at a time.
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Open-Source Business plan to undo Ebay's dominance
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