Mistakes Novice Gold Buyers Make When Purchasing Gold to Resell

If you know a little about gold value and have a buyer who will hand you cash for your gold, you can actually make a fair amount of money just acting as a middle man. Buying gold pieces to resell is fairly simple in concept, but it is also easy to lose money if you don't have a lot of experience. Before you start buying gold at estate sales, from individuals, or otherwise for the purpose of reselling and making a profit, there are a few tidbits of knowledge you should remember. Check out these common mistakes novice gold buyers tend to make when purchasing gold to resell for a profit.  

Mistake: Not fully understanding the different forms of gold. 

In general, gold that is used in coils, jewelry, and otherwise is not actually pure gold because pure gold is too soft to maintain a density that would be desirable for most jewelry. Because of this, gold is mixed with different materials and alloys to give it its more durable state. The amount of pure gold used in a piece is reflected by its karat rating, and higher karat ratings mean higher levels of gold. This naturally means that higher karat rating usually is worth more. 

Mistake: Assuming gold is real because it is stamped or marked. 

It is true that most actual gold is marked or stamped with a karat rating or other marking so buyers know the piece is authentic. However, not every gold-appearing piece with a stamp is reliable and still should be tested for authenticity. By buying a gold piece because it is stamped without knowing for certain it is gold, you could spend a lot of money investing in a piece that no buyer will want. Likewise, not every unmarked piece is alternative material. Some older jewelry pieces, for example, do not have stamps or markings. 

Mistake: Not offering enough for gold pieces. 

The key to making money by buying and reselling gold pieces is to offer just enough money to an individual for their items so you can make a profit when you sell. However, it is not a good idea to offer extremely lowball prices in an attempt to make a fortune. Most people are fully aware that they can sell gold at a local pawn shop or jewelry store, so if you are offering a rate that is far below what they can get elsewhere, they may not sell to you at all.