Gold rush prompts Birmingham bullion dealer to relocate to support growth
BIRMINGHAM-based online bullion dealer, BullionByPost, is relocating to a city centre base to support its ongoing expansion.
The Jewellery Quarter company, which sells gold and silver bars and coins to private investors, has recorded an annual turnover of almost £100m due to investors looking to insulate themselves from the difficult economic climate by accumulating private bullion reserves.
The business, founded in 2008 by entrepreneur Rob Halliday-Stein with just £10,000, saw sales hit £87m in 2012-13 – a rise of 58% on the previous year. It is forecasting turnover in excess of £120m next year.
The downturn in the UK economy, fears about the continuing economic instability across the Eurozone – exacerbated by the Cyprus bailout – and a growing concern about the safety of banks, has turned many investors towards the bullion markets.
The sharp fall in the gold price in April also benefited the firm as buyers created an unprecedented demand for the precious metal. Weekly sales hit a record £4.7m during the gold rush.
“We have had an amazing year driven by the uncertain economic outlook, increased fears of future inflation resulting from the quantitative easing and growing distrust of banks,” said Halliday-Stein.
“We have also increased our market share as our passion for great customer service has driven record repeat orders and recommendations.”
As a result of the increased demand, the company needs additional capacity and is therefore switching its base to the city centre.
The new premises in Hill Street are more than twice the size of the firm’s existing premises and Halliday-Stein plans to recruit a further 10 employees over the next year to keep up with the company’s rapid growth.
“We had outgrown our existing premises and the move to brand new purpose-built premises in the heart of Birmingham gives us the space to significantly expand the team so that we can take advantage of many exciting opportunities,” he said.
Halliday-Stein launched the pioneering new business model after spotting a gap in the market when he was left some money following the death of his mother in 2008, and wanted to invest it safely. He found that established bullion dealers were often difficult to approach for the small investor, as they preferred to deal only with larger trade customers, and charged high margins.
He also realised that his interest was reflective of a growing demand from the public to invest in gold and silver as part of a long term financial plan – a move which is common in other countries such as Germany and Austria.
The added attraction for investors is that there is no VAT on investment gold, and British coins are exempt from capital gains tax as they are classed as legal tender. Due to a large increase in demand from customers, Halliday Stein has also been working with The Royal Mint, which supplies brand new Sovereign and Britannia coins.
Nick Bowkett, Bullion Manager at The Royal Mint said: “Selling through respected distributors, such as BullionByPost, has helped us in our aim to drive our global bullion sales.”
In the last three years BullionByPost has handled more than 57,000 orders, which are sent via the Royal Mail’s special delivery service to be signed for by the recipient, and are insured by Lloyds of London up to the value of £50,000 per delivery.
The firm is also a fully authorised distributor of Umicore, Metalor and Heraeus gold and silver bullion bars.