Malaysia 2012 new notes

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

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

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

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

a)     

 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

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.