SilverMalaysia

Migrated to http://blog.silvermalaysia.net

noreply@blogger.com (SilverMalaysia) — Mon, 05 Mar 2012 06:57:00 +0000

Hi,
I have migrated my blog to http://blog.silvermalaysia.net
You can proceed to there to read the blog.
thank you.

Genneva Gold Sdn Bhd Newspaper Announcement 27th Feb 2012

noreply@blogger.com (SilverMalaysia) — Tue, 28 Feb 2012 03:58:00 +0000

Week 57.1. Genneva Gold Sdn Bhd Newspaper Announcement 27^th Feb 2012

I just get alerted by someone that there is an announcement by Genneva Gold Sdn Bhd in the local newspaper few days back. It’s stated that

Genneva Malaysia Sdn Bhd does not in any manner, directly or indirectly, at present or in future gives an undertaking or guarantee the re-purchase of gold products sold to its purchasers (no buy back guarantee)

I would like to keep this short and nice. I never invested in Genneva Gold because I never believe in such scheme. However for those who already invested please do take note. For those who are interested to know more there is a session court hearing at KL Session Court on 1^st and 2^nd March 2012.

http://www.bnm.gov.my/microsites/fraudalert/0301_status.htm#genneva

There are many info in the web which you can search for it. Happy a nice day.

Fraud: Canada LAND deal

noreply@blogger.com (SilverMalaysia) — Thu, 23 Feb 2012 01:46:00 +0000

Week 56.2 Fraud: Canada LAND deal

Well, if you see the newspaper on 23^rd Feb 2012 URL below, there is a fraud on some LAND deal in Canada.

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10788631&sec=nation#13299546510361&if_height=401

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10789835&sec=nation

http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10787151&sec=nation

I wonder why people want to part away their saving on certain real estate which they cannot see by themselves. Whenever a land deal or oversea property agent approached me I shoe them away. I never buy anything which is not under my control. Property and LAND is complex matter, even local property and land already got some many complex issues let alone oversea one. On top of that, each country will have different law etc. If you are not rich at least above RM5 million and not knowledgeable in particular country, don’t do oversea properties. Let say you work in UK b4, then you can consider buying properties there after 1-2 years staying there and done the homework there. If you stay in Malaysia, 1 2 get rich fast buy property in AUSTRALIA, UK etc where you hardly go there before, don’t buy.

Good properties no need to advertise one. People will queue to buy one. Everybody knows that. For oversea property, what you buy most likely it’s the left over. Think about it why do they advertise in Malaysia for properties from Australia, just advertise in Australia enoughlah.

Note 1: Don’t be greed. Anything return over 15% pa be skeptical. UOB Physical Gold gives a return of 12% pa depending on when you brought it.

Note 2: if you buy something make sure you have some control over it. If it is oversea land deal, property I will forget it.

Note 3: Feedback cycle should be very short. Let said I buy from Kitco (for example) some Precious Metal, if they don’t deliver after receiving my money, I will just email everybody everywhere then they cannot do any business any more. FYI, Kitco always delivered my goods. For properties deal or land deal, they can always drag you with lot of reasons since it so complex. Waiting for authority approval lah, bank loan approval lah etc…. Next thing you know the land is mortgage to bank, company bankrupt.

Note 4: This advice may be helpful to you and applicable on many occasions. If someone tell you something nice (oh! I make/you will make tones of $ buying these) be skeptical, if someone tell you something bad (oh! I / you will lose tones on $ on these) be trustworthy.

In precious metal, it’s very simple. You give me $, I give you the metal. That is. Period. No collateral, debt whatsoever. Deal is done. Nothing beat precious metal in that sense.

Accounting Issue

noreply@blogger.com (SilverMalaysia) — Tue, 21 Feb 2012 01:34:00 +0000

Week 56 Accounting Issue

To be competitive in business sometimes a competitor can be a friend. One way to help out each other is to barter between traders. For example, seller A may buy in bulk item A, seller B item B etc. Then both A and B can exchange their goods among themselves thus each have more variety of goods to sell. Win Win.

Sometimes goods are exchange not on 1 to 1 bases, for example 12 oz of morgan bar with 10 oz of PAMP lady fortune.

Due to time, location constraint, something one seller will help to collect the item on behalf of 3-5 people from the same seller. Many will not meet each other physically, thus it will involve some bank-in bank out transaction.

Since most of us are sole-proprietor, all these actions will raise many accounting question from IRS upon auditing. Thus, it's be best to have it recorded in email in case some question is asked upon you. It will be years before the question is asked and if you act then, for you

Worst come to worst, IRS said it is your sales since there are many cash deposit, $transfer into your bank account but you just helping your friend only. (TOLONG ORANG SAJA.) etc. Please pay the TAX.

Business discipline

noreply@blogger.com (SilverMalaysia) — Fri, 17 Feb 2012 08:27:00 +0000

Week 55.2 Business discipline

To be in business you must actually measure the profit in real terms and not what is displayed on a paper. There are four things you need to consider: Purchases, Sales, Expenses and Stock check.

Purchases

All the purchase you need to properly record it. Normally, the purchase amount is big in volume thus very difficult to get wrong. Frequency of purchase is 10-100x lesser than sales transaction. Thus, an easy filing will be sufficient.

Sales

For every purchase made there may be 10 – 50x sales transactions as the sales tends to be smaller in nature. Thus, proper recording is much more tougher because most transaction buyer would like to see the product 1^st, then select the required quantity, pay in cash and go. Thus, may be difficult to write up a receipt up front for some deal. Then dealing is done in public places due to security reason. Most deal has to be quickly done to avoid attention. Buyer and seller has to quickly show them the goods, pay the $ or count the cash normally stack of RM50 then quickly move away to avoid attention. One must be very discipline in recording all the transactions.

Expenses

Just paste every damn single receipts U got over the last 3 days at most 1 week into a book. Then you will be able to keep track of it. All expenses payment should be best made electronic such as Touch&Go, credit card to purchase petrol. Have a monthly automatic credit for phone, electricity etc bills into your credit card or bank account. Just keep all your statement best if in electronic form.

Stock Check

This is the most difficult thing to do, once you have properly done all the purchase, sales and expenses recording, it’s now time to do a stock check. To do a good business, you must have variety of product and you cannot be holding some many stocks for each product. It is quite common you have at least 20-50 products in hand for sales. Taking inventory is time consuming. Then, since the product is so valuable you cannot be putting it in single location. It has to be in multiple location, thus stock check is hassle.

Then most of the time, you will have to take out extra stock for sales because customer may want to buy extra in case you just bring just enough stock, you end up losing some sales. In most cases, after you do the stock check, you will guarantee out some stock is missing. Try to do stock check every month then you can keep track of losses and respond more frequently. The problem made worst if you hire someone to do the business. Even worst and who to blame, how do you account for item lost. So, start with yourself 1^st, if you cannot handle yourself, let alone handling others.

Most of the time, item could be lost while U R travelling to do your COD. Collect the item from one place and COD 3-5 places on the same day. Sure something will get loss one.

So after you check the stock losses, then only you can determine your actual profitability and not the feel good profitability. If there is excessive stock loss every year then it’s time to quit and start buying and selling in bulk such as sell by tubes.

Week 55.1 Trading days are gone.

noreply@blogger.com (SilverMalaysia) — Wed, 15 Feb 2012 08:47:00 +0000

Week 55.1 Trading days are gone.

The good old days were gone. Now everybody is knowledgeable about silver and knew where to source for the best price. Hundreds of silver traders flooded the market in forum, website etc. Thus, prices is slashed until some selling at loses. The law of diminishing return is starting to prevail. We no longer can do any trading already. We have to become an investor again. Just keep in mind next time when you sell probably it may be lower than your replacement cost in order to get it sold.

Sometimes the truth can be very disappointing, let move to something else. You think so easy meh, after so much shock (good feel) for 1-2 years in silver trading. Got to start over again, this time the hunting begins but there is no sure luck for any success.

Looking back I could have done much better if I have a mentor and less hesitation.

As for the silver market, now it’s the time to hold on to your silver and go into hibernation. Once the price goes up, when people are buying, it’s time to sell. When is it, maybe in Sept – Dec 2012 according to my experience.

OK so what is the next hunt, how does the animal look like. It’s no longer a simple commodity like silver. It has to be something much more. Some form of web services lah.

Till then CU.

Religious Item

noreply@blogger.com (SilverMalaysia) — Sun, 15 Jan 2012 08:15:00 +0000

Week 51.1 Religious Item

For me I have a policy where I don’t sell or promote to friends in work place or places of workshop such as temple, church, mosque etc. Unless they asked me then it’s another story. Part of the reason is I never able to convince any friends to do the things I want to do even if I subsidize them, let alone selling things to them. Even a simple commitment to do some extra work they just brush off to do their own things. I have done enough in the past, thus selling to others is the best.

In religion it’s a place where we seek the truth depending on who and what we believe. Thus, there is a lot of trust put on you by the people whom trusted you. I believe in law of cause and effect, thus religious place is a place I prayed and go. I have seen and hear some stories on those who stolen some temple fund and what happen to them few years down the road. It’s really very bad. Well, if you do happen to sell some precious metal with religious symbol on it, try to sell it at reasonable price. For religion is something you practice, it’s not right to make a rip-off on your customer on something their belief.

In Precious metal silver is silver, gold is gold. Even if you put any god picture into it, it does not make it more valuable in term of precious metal content. Just don’t get so carry-away when people sell you Kwan Yin silver bar, dragon silver bar, Jesus cross silver bar/coin etc. If you want, just get 1-2 pcs to show your belief and that it. Beyond that is not worth-while.

Running out of money

noreply@blogger.com (SilverMalaysia) — Mon, 09 Jan 2012 09:21:00 +0000

Week 50.1 Running out of money

From my conversation with many of the silver seller, it’s seems that most customer already running out of cash to purchase silver despite the current attractive pricing. There is very little activity among the seller. I guess most silver customer already ran out of cash to buy bullion.

It’s also reinforce my old experience on gold, once a person already converted a fraction of his asset to precious metal, further conversion will be minimal as a major portion of his cash is already spent. With the current pricing which is still lower than year 2010 price, it further reduce the interest among the buyer.

The next sales cycle will be just around the corner when annual bonus is given out to working people. However sales will never return to the great sales in Sept 2011. So, when will be the next great sales, well when silver price rise up again to USD35, USD40/oz then we will see some major activities. I believe most sales will come from those who converting their pro-folio from gold to silver.

FYI since 20-Dec 2011 (can’t recall the exact date), UOB main branch already run out of stock for gold. Well, I wonder when will all these cash rich gold-buyers diversify into silver. We are right here waiting for you.

At the same time, I begin to run out of ideas on what to write on precious metal after more than 50 articles. Till then CU around.

3F. Family, Friend and Fools: Moving Forward….

noreply@blogger.com (SilverMalaysia) — Wed, 04 Jan 2012 08:30:00 +0000

Week 49.2 3F. Family, Friend and Fools: Moving Forward….

In some of the entrepreneur talk, the concept of 3F was introduced. One of the popular questions asked is from whom do we get our customer or funding? The answer is 3F, family, friends and fools.

However, something very peculiar in Precious Metal is that most of the investors are unable to convince their family and friends to agree on buying physical precious metal. The only want they able to convince is someone who they don’t know. According to my sales statistic: 0% family/relative, 1% friends and 99% someone who I don’t know.

It’s also good to reduce 3F to 1F as one can maintain their friendliness relationship among their friends and relative.

How do one move forward from here?

Studies had shown that people will only come if there is a system in place.

Example 1: Let date and then have baby. Thus, nobody will come.

Let date, then get MARRIED, then have baby. Lot of people will come.

How will the system in place for Precious Metal in the future look like? I ‘m not sure but it must be cheap, reliable and flexible for general public to participate. Certainly it will require a lot of effort from various parties. I guess being profited from the sales of precious metal, seller should start some form of initiatives.

Cheap: Must not be limited to those who have physical store for buy and sell. Hopefully, every investor can sell.

Reliable: Some mechanism need to be in-place to prevent fraud and most importantly prevent Buyer/Seller backing off from their agreed deal.

Flexible: Certainly there will be liquidity problem when everybody tried to sell and some inadequate stock problem when everybody wants to buy. Some form of efficient pricing like stock market should be in-placed to allow easy disposal of precious metal at a fair price.

2011 in review

noreply@blogger.com (SilverMalaysia) — Mon, 02 Jan 2012 04:02:00 +0000

Week 49.1 2011 in review

Prior to May 2011 I believe that silver price will go up non-stop then the price slashed down from USD48/oz to USD32/oz. For the first time I got caught up with it. Soon it recovers back to USD40/- then 2nd heart attack price dropped to USD26/oz. Then just before the year 2011 ended, the 3^rd heart attack dropped to USD26/oz again. Wow! so tough in this business.

1^st silver heart attack I was heavily loaded but managed to recover a bit when the price back to USD40 by selling below cost. 2^nd silver heart attack, again I was caught but I managed to roll over quickly to cut my losses. Just in time for me to recover from the 2^nd silver heart attack. It is just enough to profit a bit even though the sales volume is high. Prior to the 3^rd heart attack, I settled most of my debt and not as heavily loaded as previously two attacked. At the same time, new player came in Oct/Nov 2011 with slashing prices here and there since Oct 2011. In the 3^rd heart attack, I’m not as heavily loaded as previously, thus I was not affected that much. Now it’s extremely difficult to do business in silver already. It’s difficult to compete with their pricing on certain products for various reasons.

As the year 2011 ending, I managed to get some good sales during Christmas 2011. It’s small compared to what I used to get but now it’s considered reasonable lah. Well, it’s a consolation prize for me-lah.

At the same, I realized all my 2011 predictions went wrong. So, it’s not wise to do long term prediction. Week or bi-weekly prediction is much better and accurate. As things slowed down, I got to move on to other things nevertheless I will certainly be back when the sales recovered. However, the profitability will be much much less than previously.

Malaysia 2012 new notes

noreply@blogger.com (SilverMalaysia) — Mon, 26 Dec 2011 12:42:00 +0000

Week 48.1 Bank Negara New Currency Notes

It was a long queue for the new Bank Negara Malaysia 2012 notes. Never before in our history new Malaysian Bank notes is sold in complete set format with same series number. This is the first time. With a limited 50,000 sets at RM300/- per set for RM1, RM5, RM10, RM20, RM50 and RM100, it was a mad grab among all the collectors. Each person is only allowed to buy 1 set at one time with no repeat queue. Well, some of them manage to repeat queue without begin detected by the authorities. Some employed Child Labour. Whole family came and queue. Malaysia Boleh, Macam2 ada.

You can see the queue in facebook.

http://www.facebook.com/#!/bnm.official

Some of my customer managed to buy 6 sets, wow! How did he get it? He said he sold it for RM600/- around 5 sets. Wow! RM300/- profit per set better than selling silver ler. It will be a long time again, before we can have such memorable notes to collect, such a profitable product to sell, own, trade etc.

I went on the first day afternoon 22^nd Dec 2011, it was raining heavily before than so the queue is not that long. Thank god. Despite that, I waited 1 hour to get my notes. So managed to get myself one set but the number is not good AA00014XXX. Never mind better than nothing.

What was the previous statistic? Well, in 2007 the RM50/= new notes gold line on the side was sold at RM60 per set limited to 20,000 sets. The notes were numbered from A0000001 to A0020000. Each person can only buy 1 set. Last transacted sold price in ebay 2011 is at least RM400. So for the complete set of currency, I think easily RM1000/- per set in the next few year if no economy collapse lah.

Till then good luck.

Changing Competition Landscape

noreply@blogger.com (SilverMalaysia) — Sun, 18 Dec 2011 20:45:00 +0000

Week 47.1 Changing Competition Landscape

Long time ago, people sell silver as numismatic product in ebay, I came in and starting selling it as bullion market and cornered the market. My market is primarily started from ebay and it has growth to other website such as lelong.com, mudah.my and some local forum in Internet etc.

Initially most of the customers are coming from ebay. After ebaying a while, since they are reselling their product to others in their own social networking, they will deal direct with me. After that some sellers pop up mostly in XXX.lot.my and also mudah.my. I have tried some forum in the past but the sales are not that good because the number of users has not reached the critical masses for a reasonable sale to be materialize. Things started to change in late 2010.

Prior to 2011, most of them do not have a big capital. By 2011, many of them are from government department took a competitive personal loan from Bank rakyat, Bank Islam and start to become dealer like me. It’s really hit me hard. Come and teach me back a good lesson. “Ajar sama itu silvermalaysia”. Everybody starts slashing price like no tomorrow, all my agents just died like that. I have to do extra work by selling direct. Aiyah, how to sell lah some customer only want to buy few oz only.

To profit in the market now is like gambling, if you pick the right time to buy then it is easier to sell for a profit. If you pick the wrong time, you are stuck with it until the price rise again. To profit you must be able to replace your product at a lower cost than the price you sold. However, the sales volume may not be there. Let said for small time dealer, you need to buy 100 oz each time but your sales till date is just 40oz. You need to buy extra 60 oz (that is a risk). If you wait the spot price may go up and you risk losing your silver without any replacement. If you buy now, you risk holding extra stock 60oz without any buyer for a substantial period of time.

Some sellers want quick profit, if the spot price goes up like mad, normally they will just sell below their replacement cost. All that matters is the fiat currency they earned. So it’s also not easy to sell in rising market.

Well, what is the next thing? With properties prices at the peak, stock market performance so so only, business every-where is getting slowed down. There are millionaires with plenty of cash who will come into the market and become a dealer. It’s much better than putting $ in safe deposit. On top of that, some big investor is trying to become a small time dealer because when the time comes they must have an exit strategy to sell to everybody. How to fight a tank with a knife? Sure loss one. I wonder what will happen to those dealers who took a big personal loan. They have to keep selling no matter how low is the profit as there is interest to be paid. Angry BIRD. Well in long run, I’m sure they will make some $ but maybe a lot lesser than what they initially dreamed.

For me I have no choice but to slow down lah. Look for the next big thing.! What is it? Can’t tell you yet!

Customer is my Best Friend in Need

noreply@blogger.com (SilverMalaysia) — Tue, 13 Dec 2011 07:40:00 +0000

Week 46.2 Customer is my Best Friend in Need.

Well, whenever you need expert advice on certain area be it in economy, post office, JPJ, web hosting, medicine etc you will think of someone to ask. Who do you ask?

For me those people whom I professionally know off will not entertain me that much. For example, even though I visit the doctor from my panel clinic many times yet there are many things that they will not shared with us due to our business relationship. Similarly with those post office staff who you always send off your important packages. A different thing will be shared.

Yet, many of my customers from various field of expertise do share some of their experience with me on their field. It’s a complete 180 degree turn. It’s always an interesting and refreshing discussing. Off course, I’m not their customer thus there is no conflict of interest and greater room for sharing. Certain times, when I ‘m in need of certain advice, I do call up some of my customer and ask for more information. They are helpful most of the time.

Unfortunately they seldom asked question other than precious metal. Nevertheless, I always make a point to answer all email and calls.

Economy in Stable State

noreply@blogger.com (SilverMalaysia) — Mon, 12 Dec 2011 13:57:00 +0000

Week 46.1 Economy in Stable State

In a competitive environment, price war is unavoidable. Thus, let said one person state off with RM100,000 capital.

RM100,000 capital at RM5000/oz of gold he can get 20 oz of gold.

Cost Safe deposit box + insurance = RM500.

Price increase in gold 10.5% (for ease of calculation)

He easily earn RM10,000 doing nothing. 10% nett.

Now he decided to buy and sell silver with RM100,000 capital. How much he should earn given the time spend. RM100,000/- let said RM100/oz for simple calculation. 1000 oz of silver.

Consider one month he can sell 2000 oz each at RM3 nett profit (after all travelling etc).

2000 x 3 = RM6000/-.

Assume an average order size of 50 oz per customer, he need to do COD 40x in one month or everyday 2-3 COD on average with some day off. That will consume approximately 3 hours of his time per day. (running to banks, packaging, storing etc)

In one year he will earn RM72000/- for 1095 hour of labour or approximately, RM65/hour of labour. Assume, there is a price war and the labour cost will go down to RM30/hr. is it still worth your effort? Think about it. Well, then comes few factors

Do you have big capital to play with?

b) does it worth your time think about it.? If you earning more than RM65/hr than not worth that risk. E.g People with their own business to take care.

c) DO you have the spare time? Well, there always insufficient $ all the time, people just want a little bit more. Thus for those with spare time you can consider it.

Scaling beyond this will require hiring trustworthy people. They can just steal your goods when you ask them to deliver. Just like in Jason Hommel case.

For me, I think the price war may go down until the labour cost is around RM20/hour, after that the price will be roughly the same, selling will be localized to reduce travelling time and cost. Lastly, price will be very much dependent on what price the seller manages to buy and replace. In rising market quick profiteer will sell at below replacement cost for a quick profit.

Lucky Day

noreply@blogger.com (SilverMalaysia) — Mon, 05 Dec 2011 03:22:00 +0000

Week 45.1 Lucky day

Well last week, one buyer insist me to send via pos laju, so I send out the package on 1^st Dec 2011, then when I tracked the package it was stated the package was dispatched out from PPL Kajang. Then 2^nd Dec 2011, Kajang was flooded and the pos office is just nearby there. I guess I was lucky by 1 day, if I decided to pos 1 day later, there may be a chances that my package now in Sg Chua. Hihi.

Another development, I was supposed to meet up some person for a business plan on 2^nd Dec 2012. I decided on Metro Kajang and he decided on Damansara. So it was done at Damansara, the meeting lasted from 12:45 till 4:00 pm. I was lucky again, have I or he agreed on Kajang, there is a high probability that his RM200K car is as good as gone in Sg Chua. For me, it still OK, incentives to change new car.

For more video, just go to the URL below.

http://www.youtube.com/watch?v=P0eDqoyrmXs

http://www.youtube.com/watch?v=5gXCN6w9hTc

Have a good weekend.

Barriers in opening a shop

noreply@blogger.com (SilverMalaysia) — Tue, 29 Nov 2011 05:30:00 +0000

Week 44.1 Barrier in opening a shop

Security issues:

Very few people are selling silver retail, if you are you may become an easy identification and target. Gold industry has been around for many years but silver is just starting, a lot of security issues already been addressed by people in gold smith industry. We still lack of experience in dealing with security.

Economy Issues:

There is a high sunken cost in having a retail shop.

Renovation + Setup:- RM100,000/-

Rental + Monthly expenses: RM5,000 x 12 = RM60,000/-

Salary Loss (quit Job to do business) : RM100,000/= (for easy calculation)

Total start-up cost for 1^st year :- RM260,000/- wow!

This does not include the inventory yet.

OKlah, before I begin when I do the calculation, already closed shop already.

At the moment better buy RM260,000/- of silver sell at 1-2% profit margin also much better than open shop lah.

Nevertheless, if you can get a monthly net profit of RM10,000 to RM15,000 per month from the shop, then can considerlah. But to have RM10,000 nett profit, your monthly sales has to be around RM1,000,000 per month or RM50,000/- per day if you open 20 days. That about 400 – 500 oz per day. Must have a working capital of RM600K but preferably RM1 millionlah.

That just a rough calculation, I personally don’t 1 2 be tied down inside a shop lah. Boring lah. Furthermore, where got so much $$$ to spend. I shall leave it to others to explore. The first few who made it will be driving Mercedes or BMW (Bring me women) in few year down the road.

Why Numismatic is important? Essences of Numismatic

noreply@blogger.com (SilverMalaysia) — Fri, 18 Nov 2011 02:59:00 +0000

Week 43.1 Why Numismatic is important? Essences of Numismatic

Do your parents, grand parents or great grand parents left you something for you to remember as a token. An old coin will do. Queen Victoria Straits Settlement 50 cents will do. hihi.

Throughout your life time did you keep any money. What is the proof? Where is it?

Thus, it is important to keep some at least for your own shown that you have some $$$ for yourself and your future kid.

For each year you have live, you owned the money and you still have some of it. Nice omen. When you died, it is left to your kid as saving, evidence that you have left something for them. No need to be expensive. Maybe a 10cent or RM1 note of each year will do. It is affordable for most of you.

Best known bank notes are the first bank note for Malaysia printed in 1967 was given away by Bank Negara Ismail Mohd Ali to the Agong. It was sold at $115,000 pound in 2008 auction.

Aiyah! Ismail Mohd Ali should have make 1000 presentation album. A/1 000001 to A/1 001000. Just like the RM50 50^th Aniversary gold line was selling like a hot cake. Price is easily RM400/pc now.

I don’t know how these notes end up in auction house in SG. Maybe someone can share. This is Malaysia property mah, should not be sold at any price. The first money you have and yet you given away to somebody. Not a good sign or omen. I don’t wanna to raise any more sensitive issue causes I don’t have time+power+network to handle difficult issue.

Well, for Precious Metal I will talk more on numismatic aspect in my future blog article.

>>>

http://www.coinpeople.com/index.php?/topic/28024-the-worlds-most-expensive-asian-banknote-sold-at-spink-action/

http://dniewcollectors.blogspot.com/2011/05/malaysia-numismatic-newsthe-worlds-most.html

Today Spink’s World Banknotes auction featured numerous rarities which realized unbelievable prices. Without a shadow of a doubt, the highlight of the sale was a collection of the first ever Malaysian banknotes. The lot was purchased for an amazing £115,100, four times the original estimate, which broke Spink’s previously held record for the most expensive Asian Banknotes sold ever at auction.

The banknotes were a gift presented by Ismail Mohd Ali, on behalf of the Board of Governors of Bank Negara Malaysia, to the (fourth) King of Malaysia, Tuanku Ismail Nasiruddin Shah. They are preserved in a blue leather presentation album with the title Bank Negara Malaysia and arms in gold on the front cover. The folder contains the following: 1 ringgit, blue and multicoloured, 5 ringgit, green and multicoloured, 10 ringgit, blue and multicoloured, 50 ringgit, blue and multicoloured and 100 ringgit, purple and multicoloured, all ND (1967), serial number A/1 000001, all with portrait of Yang Di- Pertuan Agong, TuAnku Abdul Rahman, first King of Malaysia, at right, all are signed by Ismail Mohd Ali, value at centre and at each corner, all notes are mounted in card with gold border (Tan M 27, 28, 29, 30, 31). There is also a second presentation album containing 1000 ringgit, ND (1968), serial number A/1 000001, purple and multicoloured, portrait of Yang Di- Pertuan Agong, TuAnku Abdul Rahman, first king of Malaysia at right, signed by Ismail Mohd- Ali, value at centre and each corner, mounted in card with gold trim (Tan M 32).

4P. Product, Price Promotion and Place

noreply@blogger.com (SilverMalaysia) — Tue, 15 Nov 2011 00:42:00 +0000

Week 42.1. 4P. Product, Price Promotion and Place

Here is the definition of 4P in Wikipedia.

http://en.wikipedia.org/wiki/Marketing_mix

Let see how 4P affects our precious metal market.

Product : Whether you buy from me or someone else it is the same product 1 oz silver bar. However, you may need to inspect the goods condition whether got any scratches etc.

Sol: Offer some other product which nobody can offer. If it’ s the same product complete on price, place and promotion.

Price : Well, there are many avenue for one to view the current prices offered by others. Your price must be among the lowest at least in your region. Those with big capital will win-lah.

Promotion : Whenever there is a product for sales, how many people know about you or your product? How quickly they know about it? Must do multi-channel marketing, blog, email, facebook, ebay etc to get the coverage.

Place : Since postal services may be unreliable depending on your lucky. On top of that, you may want to COD since the item you buy is somewhat expensive and you would like to see the real stuff before handling over the $ to them. Thus, location is important. If U R at KL CC, KL SENTRAL etc SENTRAL fatt fatt fatt. 228 lah. if U R at Ulu Ulu place, then 224 lah.

As you all know most sellers are doing it part-time, so far as of now who is the winner in this game. Well, those who have price, promotion and places are winning market share now.

Since the margin is so low, agent distribution model is failing now and will stop very quickly. In no time, the seller will have no choice but direct selling. Direct fight or else you can never win. At the mean time, customer is enjoying the show.

You can also view the 4P definition below taken from wikipedia

Elements of the marketing mix are often referred to as the "Four 'P's", a phrase used since the 1960's

Product - It is a tangible good or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Packaging also needs to be taken into consideration. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the product approaches market saturation. To retain its competitiveness in the market, product differentiation is required and is one of the strategies to differentiate a product from its competitors.

Price – The price is the amount a customer pays for the product. The business may increase or decrease the price of product if other stores have the same product.
Promotion represents all of the communications that a marketeer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet adverts through print media and billboards. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations (see Product above).
Place – A way of getting the product to the consumer and/or how easily accessible it is to consumers.

Any organization, before introducing its products or services into the market, conducts a market survey. The sequence of all 'P's as above is very much important in every stage of product life cycle Introduction, Growth, Maturity and Decline.

Back Off

noreply@blogger.com (SilverMalaysia) — Thu, 10 Nov 2011 09:01:00 +0000

Week 41.2 Back Off

Recently, I drove all the way to northern KL for delivery only to cancel the deal myself. Rugi petrol, masa. Waste time and $$ but still got to uphold my principles.

Why?

Well, when I reach the place his relatives face look familiar with someone I deal before but not him. Later on I discover that it is someone related to a person whom back off from my earlier deal before.

Here is the story goes.

Back in Sept 2011, Mr A brought some item from me a few times. Relationship was smooth and good. Then, he placed an order for X oz (reasonable big) thus I hedge additional X oz with my supplier. Within a few days, the spot price drop from USD40 to USD26, he then back off from the COD twice. He said someone died. Etc. I experience a market lost of approximately RM20/oz and hold X oz for few months not moving at all.

All these while he told me was he is jobless, buying on behalf of his father who stays in northern region. Since he back off, just don’t come back-lah. Then I received an ebay sales from someone Mr A dad, I don’t know is Mr A dad. After sorting out the logistic, it was decided to deliver to his relative at Northern KL to inspect the goods. Upon verification, Mr A dad will bank in the $ into my account.

Having known that it is Mr A dad who back off from earlier deal, I decided to cancel the deal.

Mr A Dad said it not good for my reputation. So I decided to write this blog and let you all decidelah. Have I done the right thing?

Then he told me his son uses his $ to do business and now he is buying for himself. The fault is in his son. I also don’t know who to believe, best is earn less, not to deal with them anymore. Well, he can also buy from someone else at a slightly higher price I guess.

Nevertheless, if you are desperate for sales let me know I can pass you their contact. Thank god there is no major price correction and movement when the dispute occurred, we have considered the case is closed and let move on to other things.

BuyBack commitment is not sustainable

noreply@blogger.com (SilverMalaysia) — Tue, 08 Nov 2011 07:39:00 +0000

Week 41.1 BuyBack commitment is not sustainable

One of the common questions people asked is “Is there any buy back guarantee?”

Some vendor do offer buy back policy. For me, I stick with my rule. No buyback. Sometimes, I will offer to buy back but it’s on case to case basis.

Let do some basic arithmetic to determine the scalability of such buy back scheme. This is not me, but I wish it is me. I’m not so kaya/rich lah. Nevertheless it is for you to think about it.

Premise 1: Precious Metal margin is very low, for simplicity of calculation let use the figure 2% nett profit margin.

In order to earn RM10,000/- per month at 2% nett profit margin, the vendor need to sell RM10,000/ 2% = RM500,000/- per month or RM6 million a year.

Premise 2: Amount of cash capital he had maybe RM250,000 with rolling of 2x a month. That make up, the sales of RM500,000/- per month.

Premise 3: Assume there is a big profit taking process RSI-14 > 70, many customer want to sell back to you. Very few are buying. Let said 12% of his annual customer sell back to him within 2 weeks period and only 2% of his customer is buying. He need to fork out a cash of 10% of annual sales which is RM600,000/- but his capital is only RM250,000.

Thus, in good times, buy back is not an issue. In fact it is encouraged as seller will and wanted to make more profit. In stress time (big profit taking, market cut-loss), he will not be able to buy back from you if he unable to sell back to his supplier. Suppose he able to sell back to his supplier, the pricing must included the freight charges, lower buy back price most likely at spot price.

In summary, there are only few institutions which can guarantee buyback

a) Bullion vendor with hedging and buyback mechanism with the wholesale bullion vendors.

b) Banks

c) People with lot of cash

Permanent Price War

noreply@blogger.com (SilverMalaysia) — Sat, 29 Oct 2011 01:57:00 +0000

WEEK 40.1 PERMANENT Price War

Recently precious metal price war in SLS facebook is very fierce and killed off many of the reseller. Now, it remains a question whether it will be a permanent thing or just a one time kill.

Well, let do some computation to justify this claim. Assume someone managed to get a loan of RM100K to do this precious metal business. Normally GLC and government staffs are entitled to get a lower interest personal loan. The effective interest rate for such loan is around 10% per annum.

For the ease of calculation, let assume the following

Loan amount : RM100,000/=

Interest rate: 10% or RM10,000/- per year.

Silver price :- RM100/oz

Nett Profit margin before interest cost : 3.33% (dump prices)

Assume, price is stable around USD29 – 32/oz

So at RM100,000/= he will be able to source 1000 oz for sales. So, he needs to sell 3000 oz per year just to recover his interest margin. Can the market absorb 3000 oz per year?

Let assume there are 10 persons following his footstep, the total loan amount is RM1 million and 30,000 oz of silver per year sales is required to cover the interest cost. Thus, a 3-10x increase in existing customer base is required to support this business expansion.

Thus, be prepared for permanent price war. It’s just the beginning. Nevertheless, it’s an opportunity for everyone to make $$ and losses some as well.

Price War

noreply@blogger.com (SilverMalaysia) — Sat, 22 Oct 2011 09:58:00 +0000

Week 39.2 Price War

Throughout my selling experience, I think this is the first time where the price war has become so fierce that some even can afford to sell at extremely low price. Wow! I think at the moment I surrenderlah. I also cannot beat their price. Now have to wait and see lah. Just hang on to my stock.

Most of the sellers and buyers are advertising at Facebook SLS website. Wow! Tonnes of traffic there. Last time my phone used to be “Telefon berbunyi ring2”. I used to say “Sorrylah brother I don’t have stock lah. You wait for the next round lah”.

Now no more, in fact got to call some customer asking them

“Just to get it all out, what's in my head
And I, I am feeling a little peculiar
And so I wake in the morning and I step outside

And I take A deep breath and I get real high
And I scream from the top of my lungs,
What's goin' on

And I say hey.... hey....
I said hey, what's goin' on
And I say hey.... hey....
I said hey, what's goin' on”

Hi:- I tak boleh buat business lah, orang jual bayar murah. Saya punya petrol, SMS pun tak cukup. Buang masa saja lah. Simpan saja lah.

I cannot do business lah, people selling so cheap. Not enough for my petrol and sms. A waste of time only, now just keep lah.

For buyer, now the sale is on. You should grab some coins and bar from those seller as they are all selling cheap now, once if there is a rapid price up movement, seller will get caught for selling too cheap. Then it may not be that cheap anymore.

Location Location (2)

noreply@blogger.com (SilverMalaysia) — Sat, 22 Oct 2011 09:42:00 +0000

Week 39.1 Location Location (2)

Well, it’s known that Precious Metal trading is best done via COD. Postal is a problem. You will bump to it later on. CityLink who lost my shipment 20oz silver, last week just got a letter stating that they only pay me RM200/- for the losses. Let move on from here. The location of your workplace must be good. If you work in good location area town center Masjid Jamek, KL Sentral, Mid-Valley etc. You can meet up with lot of people in a very short time.

If your location is good you can sell at higher prices lah. Think about it, you only see Tesco, Giant, Ecosave in sub-urbans area. You don’t see Tesco in KLCC correct. 1 meal in KLCC cost RM10/person, similar meal cost only RM5 in Cheras.

If you are in high density area and have the time to COD, don’t do wholesale deal lah sell few hundred oz in one goal after that nothing to sell at higher price. Sound very stupid for you to do wholesale deal. Do lot and lot of small deals lah each 5oz or 20oz each. Each will earn you RM3-5/oz extra, think about it. Sometimes, wholesale can give you quick bulk for little work, after that you will run out of stock, now what? How long for you to restock? At the meantime, no business can be done.

I work in far-far away places thus I have to do wholesale. No choice.

Nobody knows about the future. When will be your next sales and how big will it be, nevertheless you should put this in your mind ok. Things can happen very odd.

You decided not to sell 100 oz @RM100/oz sales to Mr A, but sells 40oz @RM103/oz to Mr B and hope to sell to the remaining 60oz other customers at @RM104/oz. Nobody turn up to buy the 60oz you are stuck with 60oz.

You sold 100oz @RM100/oz to Mr A, the Mr B&C&D call you and said they willing to buy at RM105/oz but you have nothing to sell.

Which one will happen first, you won’t know. Make the best guess ok.

What is my conclusion from this?

Dealer will get 100-1000 oz from main dealer each time, then they will go and sell back to their client in their own area at small quantity. Then you will have SilverKlang, SilverShahAlam, SilverPJ, SilverSubang, SilverBangsar, SilverKL, etc. Crossing border/district will be unsustainable unless the order is very big. Cost per km for car is around RM.30-RM.40 (all in maintenance, petrol, toll etc) + telephone charges etc. The most expensive part is the time spent on making the CoD.

Hedging

noreply@blogger.com (SilverMalaysia) — Mon, 17 Oct 2011 00:39:00 +0000

Week 38.1 Hedging

When I sell 1 oz, I will try to buy back 1 oz from my supplier almost immediately. Most of the time, I will not try to speculate as I tried a few times before and most of the time the end result is not so nice. It is better to have some fixed income rather than gambling all the time. If you are gambling all the time, over time you will be finished (Customer quote).

However hedging is only possible if you are buying in bulk of few hundred oz. It is impossible to get few hundred oz sales in one shot all the time, most of the time it may take up to 1-2 week to accumulate few hundred oz. Thus, as the seller he will have to make up the losses with a higher sales premium. There is no other way out. Hedging is only possible for big sellers where they can buy and sell in big volume. There is no such thing as exact hedging. One can only do estimated hedging.

How does a middle size seller deal? Well, it based on fine-tuning of their sales based on expected previous week sales. Let said last week sales is 200 oz, so this week you order 220oz so that you have enough for next week sales. If sales are good, order extra the following week. Vice-versa.

How does a small size seller deal? Well, the simplest will be buy at RM100 and sell at RM110. For those who are more experience, they will ask their supplier the replacement cost first before they sell. Once they have a confirm sales of 50 oz, they will lock the price from their supplier for 50oz. They will use their own stockpile for trading.

For minter, normally they will sell their orders in 1000 oz because 1000 oz silver bar is widely available. For example, you order 1000 x 1 oz of sunshine 1 oz bar from sunshine mint, the moment the order is placed, sunshine mint will place a replacement order of 1000oz silver bar from their supplier. They will make the differences in minting charges.

E.g. transaction.

Supplier : Well, the minimum order is 200 oz.

You: If I buy from you, will you accept return for any left-over sales let said 60oz.

Supplier : Orh! The moment you order 200 oz, I placed a replacement order of 200 oz from someone else. You will return me the 60oz I will have to pay you back this will put me in cash tight position. So, the answer is no few years back. But now it’s yes as I can still accept return because I will order 60oz less on my next replacement order from another customer.

Internet Marketing

noreply@blogger.com (SilverMalaysia) — Sat, 08 Oct 2011 05:24:00 +0000

Week 37.1 Internet Marketing

How do you reach your customer in the quickest possible time?

Here is the order of speed from fastest to slowest.

Phone call, SMS, email, forum, popular website (mudah.my, ebay.com,lelong.com) and lastly own website.

Once you have your stock arrived, send sms to a list of your potential customer. If the price is attractive, they will respond and the deal is on.

It‘s also depend on your customer set whether it is new customer or repeating customer.

OK you got stock and you want to dispose it depending on your disposal objective. Make the highest profit, make the least effort, make the quick sale and easy job. You won’t get all of them.

The first 3 approaches are mainly for sellers who you already has a customer databases of more than 100 customer.

Description	Suitable	Not Suitable
Phone Call	Only for attractive deal with people you deal with for quite sometimes. Normally after 2-3 SMS, just call that fellow and sort out the deal. Normally, e.g. spot price went down to USD26/oz, you call your good friend whether he want to share your order or not. Within 2 hours, spot may be USd28/oz. So get it done quick.	May be offensive to others. Difficult for them to said no.
SMS	It’s the quickest form of email. Can send to lot more customers. Once you have something to offer, just sms to 10- 20 close/recent customers of yours. After a few sms reply, call them up and get the deal done.
Email	People will read their email everyday, so it will reach them latest 2-3 days because some of them don’t read their email during the week ends.	Too many email, may cause your email id to be listed as a spammer.

If you have some stock for sales but not enough to cover the whole market, then just start off with SMS first with your close and most recent customers. First come first serve. They should get back to you within 2-4 hours. If there is still some left-over stock within 4 hours, then it is time to do some masses emailing. Masses emailing you should expect respond within 1 day.

If there are still some left over stock, it is now open to all new customers. You have fulfilled your responsibility to existing customer. Then now, you can go and make the announcement in online forum and facebook and see whether there is any respond. If there are still got left-over stock then list them in ebay or mudah and wait for the customer respond.

Description	Suitable	Not Suitable
Forum	Depending on which type of forum, some active forum you can get a lot of sales. But the problem is your price must be among the lowest.	Inactive forum is useless. Choose your forum properly. Activation period may be 2-3 days, after that it gone as advertisement is too deep inside the forum. People cannot see.
Facebook	Lot of traffic.	Your advertisement may only valid for 1 hour, after that it is gone for good. All your friends now know U sell something, you may not want them to know at the first place. Your competitor can get hold of your customer as well.
Popular website	For getting new customer. The problem is timing, it can be 1-2 days, it can takes weeks, you really won’t know	Your price must be the lowest in that website
Own Website	Mainly for own customer and some new customer who suddenly bump to your website	Very low traffic

Today, people are also smart enough to search on facebook, forum, ebay, mudah, lelong etc. So if your prices are compatible then you can get some sales lah. In the end it’s all about price as silver is just a product with little variation, if you get from Mr A or Mr B, it is almost guarantee it is the same thing.

Unless you have plenty of stock, you don’t fire all at one shot, sms, email, forum, facebook, popular website, own website. You will end up disappointing lot of people. You also cannot fire too many times otherwise people will immune to it. Different variation of firing will enable you to understand your customer better.

Customer A is in forum XXX, email everyday, which website.

Customer B only see ebay.com. Etc.

Malays customer mainly from mudah.my

It is best to try different thing at different time and after some time you know what is the best way to advertise.

Good Luck.