Today’s question comes from Edwin
Greetings Tek,
Thank you for your informative web site…i already referred someone to it…my question is how much money do you think is needed to start…especially at the party?
Thanks,
Edwin
Well Edwin, that would be a fairly ambiguous number we could come up with answering that question. That fact that there are so many variables when a person decides to enter into the scrap gold buying business, the number could drastically swing many decimal places. I know people who have started with a very limited budget and have done really well. Your imagination and ingenuity can often compensate for limited funds.
There is however a start-up cost of any new business and the gold party business is not immune to those costs. Your question also focused on “gold party buy money” which is a unique aspect of the scrap gold buying business. So I will do my best to try and break it all down.
Scrap Gold Buyers Essential Tools.
Now in our section of building your Gold Party Toolkit, we list some essential items to have on hand for any scrap gold buyer. This suggested kit would include:
- gold testing equipment
- scale
- rare earth magnet
- jewelers loop
- calculator
- storage media
- portable safe
- jewelers tools
Now we still very much hold that this is a minimum amount of tools one should acquire if they are serious about starting their scrap gold buying business. However if you are on a very shoestring budget for start-up costs, then they certainly could be acquired over time.
Now lets see what is absolutely necessary. You will not be able to test gold without gold testing equipment, and you will not be able to have an accurate weight measurement without a jewelers scale. Now we always suggest for you to use a good electronic gold tester. We have even reviewed the popular ones in our gold tester review section. However electronic gold testers are somewhat expensive if we are talking about and absolute rock bottom shoestring budget. So if you noticed our gold tester reviews we included the old standby acid test. You can get a complete acid test kit for $25. We do not recommend using acid tests in front of customers, but you can always buy a good electronic gold tester later. A jewelers scale will cost you $15 for the most inexpensive scale that we can recommend.
Shoestring Budget Total: $40
Marketing and Promotion
Marketing and promotion for your gold party business is a tricky monster. Some people spend thousands of dollars on professionally designed marketing materials and thousands more on professional marketing firms to get them clients and customers. Others get away with using our marketing materials and products spending < $100. It is all relative to how fast you are able, and willing, to scale your gold party business. Some people like to have everything right out of the gate, while others like to ease themselves into expanding their business.
Sticking to our shoestring theme here, lets discuss the cheapest option; using your imagination. This is where your ingenuity really pays off.
Now if you have the talent and right tools for it, designing and printing your own marketing materials is an option. However if you are anything like me, it would turn out like something I did for my 5th grade lemonade stand. That is real cute when I was 10….embarrassing in front of potential customers. Plus heavy grade paper is not cheap, nor is the ink for my printer. These items would cost me hundreds anyways so for most of us, this option is better left for the professionals like Printing for Less.
But we still need to market our business and create a buzz for our gold parties. There are a million different ways you can do this, and not every way will fit every business. You are going to have to find out what works for you, from getting on your social media sites and leveraging their power, to hitting the pavement and shaking hands. Since we are on a shoestring budget here, this one will cost us $0.
Shoestring Budget Total: $40
Gold Party Event Expenses
Now you have the tools, you have a guest list and you are ready to make some money. We could rent out a conference room with a caterer and bar with enough buy money to purchase the entire building. But that cost capital and we are on a shoestring budget. So we will use our kitchen for our first party with chips and dip.
So that leaves us with the buy money. And this is the crutch of Edwin’s question. What is the rule of thumb when having cash on hand for the buy at a gold party? Well I would love to give you a number like $300 per guest, but that is just not the case. Your guests can be unpredictable and you will have no idea the amount of scrap gold one person can lug to your party. And the cardinal rule of buying scrap gold at a specified event time like a gold party is: NEVER RUN OUT OF BUY MONEY!
So we are on a shoestring budget and we do not want to break the gold party cardinal rule. So what do we do?
You plan ahead. You causally ask each party attendee how much scrap jewelry they are planning on bringing. I find the best way to do this is either on an RSVP card, or through email, or on your website if you have one. Have them say how many rings, necklaces, bracelets etc they will be bringing. Obviously don’t ask them for the weight and karat, that is your job. But this will give you an idea of what they will be bringing so you can plan accordingly.
The number of $100-$300 per guest is actually pretty realistic unless you have “stealth inquired” as mentioned above. You will have some, like I mentioned, that come pushing a wheelbarrow full of scrap through your door and then some that pull out a small miss-matched earring. So for a small party of 10 guests $3k should be more then enough, and $1k could scrap you by.
Shoestring Budget Total: $1045
But we are really talking shoestring here. And we want to even start off smaller. Plenty of people have entered into the scrap gold buying business by scheduling one appointment at a time. They will meet at coffee shops to complete their transactions. This is a lot more work then scheduling a gold party, but can be a way to work your business from the absolute ground up.
So your imagination is the key to your start up costs.
