New U.S. Mint Buffalo Coins' Packaging a Nightmare
When the U.S. Mint announced it was including a. 9999 gold bullion coin to its line of gold coins, it looked like a "golden opportunity" for the Mint to capture a huge piece of 24-karat gold coin market. When legislation was passed mandating that the brand-new coin bear James Earle Fraser's styles that enhanced the legendary Buffalo/Indian Head nickels from 1913 through 1938, the new coin's future looked even brighter.
Nevertheless, on release of the brand-new Buffalo gold coin, the Mint's golden opportunity has actually become a headache at the retail get more info level. While the coin itself is rather striking, having a matte surface and completely recording the Fraser designs, the packaging makes the coins a problem.
Although the bulk of the blame can be laid on Congress for trying to "micro-manage" production and circulation of the coins, the Mint ought to accept its share of the blame for the choice of product packaging, having actually not considered, the retail elements of the product packaging.
Congress mandated that the coins be individually encapsulated to safeguard them from damage, apparently to prevent issues that have risen with 1-oz Canadian Maple Leafs. Even more, Congress mandated that the Mint have the coins ready for circulation by the end of June. To meet the due date, the Mint needed to pick a method of packaging that was easily offered and that would accommodate expected big volume sales.
The Mint selected a semi-rigid Mylar product packaging, five coins horizontally with four coins down, making twenty coins to a sheet. With broad spacing in between the coins, a "sheet of Buffalos" measures twelve inches by sixteen inches. The product packaging causes numerous issues.
Since of the rigidness of the Mylar, a sheet can not be folded into a tall package. Orders for less than twenty coins need to eliminate of the sheets for the coins to be loaded compactly, which is preferred-- and expected-- for gold bullion coins.
Undoubtedly, the semi-rigid packaging for the Buffalos was indicated to provide long lasting defense. Nevertheless, the Mylar is so rigid that an original sheet of twenty Buffaloes can not be easily stored. A sheet of twenty can be rolled like a magazine and after that rubber-banded, but then storage would take a great deal of area. Whereas the tiniest of safe deposit boxes will hold hundreds of 1-oz Gold Eagles since they come in compact tubes, possibly only sixty or so Gold Buffalos would fill a small safe deposit box.
Another problem that has emerged: The coins readily come out of their protective sheets when dealt with. This implies the coins then need to be moved to a tube or to individual plastic sleeves, which are utilized so often for single coin purchases. Or, the Mylar can be fixed with Scotch tape, barely an attractive solution.
Since of the issues that have actually developed with the product packaging, Buffalos will not interest numerous big bullion buyers but to collectors, who might desire just a couple of coins. Investors who ordered Buffalos without knowledge of the product packaging have actually been dissatisfied. With the present product packaging, it is unlikely the Mint will catch much of the.9999 great bullion coin market.
While the Mint may point to early robust sales, new coins nearly always enjoy strong early sales. And, with the popular Buffalo/Indian Head design, certainly Buffalos will remain favorites of collectors and individuals looking for gifts. Nevertheless, the Buffalos were presented to pursue the.9999 fine gold bullion coin market, where financiers make repeated orders. So, the test for the Buffalos will be available in the months ahead when we find out if financiers make second and 3rd orders for Buffalos.
It is the opinion of this 32-year veteran of the gold bullion coin market that if the U.S. Mint does not make modifications in Buffalo product packaging, sales will erode gradually, and the Mint will miss a golden opportunity to catch a huge piece of the pure gold coin market, which is now dominated by the Royal Canadian Mint's Gold Maple Leafs.
The option to the problem is for the Mint to alter the packaging as soon as possible, considering how big investors are likely to store the coins-- in safe deposit boxes. For financiers who do not keep in safe deposit boxes, compactness ends up being even more essential, as the coins must be simple to conceal. The Mint appears to have actually completely neglected this aspect of the market.
Furthermore, the Mint requires to keep in mind that the coins have to be handled by bullion coin dealers who ship the coins to the final financiers. Today packaging causes twenty-coin or bigger orders to be shipped in big boxes, contributing to shipping expenses. The big boxes may also need more journeys to the Post Office. It likewise increases the cost of handling for orders less than twenty coins, as they need to be cut out of the sheets.
Given that Congress mandated that the coins be separately encapsulated, the Mint needs to opt for hard plastic capsules such as those utilized by The Perth Mint. Then the capsulated coins need to be put 10 to a tube, offering density for ease of storage. That would also help with handling by coin dealers.
To remedy the issue-- and truly go after the.9999 bullion coin market-- the Mint ought to encapsulate the coins individually and put them in tubes of ten. Then 10 tubes must be put in small, sealed, and durable boxes. And, finally, 5 little boxes of 100 coins ought to be put in a larger box of 500, which is how the Mint ships its best-selling Gold Eagles. Boxes of 500 are popular with large investors, and the boxes of 100 would be appealing to medium-size financiers.
Packaging the brand-new Buffalos by doing this would facilitate storage and managing both for financiers and for retail dealers. The Mint requires to think retail with its product packaging, to consider how financiers store, and to think of the bullion dealerships who manage the new Gold Buffalos in providing them to pure bullion coin investors.