One of the most cost effective methods to purchase silver is purchasing from online sellers. Precious metal online sellers could range from a company that has a physical setup (office), to someone who someone who sells silver as a part time job – running it at the comfort at his bedroom.
If you recently started buying silver online, you might have a question in mind. Should you pay the seller first? Or the seller should send you the product (silver) first?
Either way there are risk to both parties.
If buyer pays first, buyer is putting his money at risk. What if the seller disappears after collecting the money?
If seller sends first, the seller is putting his silver at risk. What if the buyer disappears after collecting the silver?
It is really a chicken and egg situation.
If the seller has a website (eCommerce) that can receive order, the transaction becomes easy and clear cut. When a visitor visits a website, he sees a products that he would like to buy, he clicks on the “Buy” button, enter his details and confirm the order. He can perform the payment online within the website. The payment gateway would typically be direct debit (such as Maybank2U, CIMB Clicks, etc), iPay88, PayPal and offline bank deposit.
In this case, as long as the payment is not received, the seller would not ship out the silver. In fact, if the buyer has selected offline bank deposit as the payment method and did not pay within certain period of time, the order will be voided. This period of time varied for different sellers. The period could be anything in between 2 hours till the next few days.
There is another type of seller that do NOT have an eCommerce website to facilitate the transaction.
This type of sellers are usually individuals. They usually place their margin a little lower, to attract buyers who look for lowest selling price.
If you are buying from individual sellers, there are rooms for negotiation – especially when you are buying large amount of silver. The communication is often done through private message, SMS, email or even phone call. This is where things started to get interesting.
Some buyers would demand seller to ship out the product before depositing the full amount. A minority of sellers would agree to this practice while most would not.
The standard transaction process is always the buyer pays for the silver he wishes to purchase. Then seller would ship out the silver. There is no such rule as “Send first, pay later”. Online transaction is always “Pay first, send later”.
There might be an exception if both the buyer and seller has established a trusting relationship and the seller is willing to bear the risk.
Personally I have done it a few times with seller whom I have been buying from for a long time. I needed the stock urgently. The seller offered to send the stock before receiving the full amount. In return, I offered to maxed out my online transfer limit as deposit and then paid the remaining with cheque on the next working day.
This example is an exception case. Most of the silver transactions I had is still “Pay first, send later”.
The standard policy for silver transaction is “Pay first, send later”. This happens in both eCommerce platforms and individual sellers. If this is the first time you are buying silver and wondering whether the seller should send first, or you should pay first, the answer is “Pay first, send later”.
However, if you feel “Pay first, send later” is a risky move, you can consider the following:
- Only buy from reputable online sellers
- Only buy small quantity to “try” out a seller
- Request seller for COD (Cash on Delivery) instead of online payment and postage.
I will discuss more on COD (Cash on Delivery) on next week post.
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