The spread is not automatically profit
A dealer's displayed buy price and sell price create a quoted spread, but realized gross profit depends on what happens between the two transactions. Testing, payment, market movement, theft risk, insurance, storage, shipping, refining, taxes and inventory age can consume that spread.
For scrap, the exit may be a refiner rather than another retail customer. For recognized bullion, the exit may be a retail sale or wholesale counterparty. The cost and timing differ.
Margins should be product-specific
A recognized one-ounce coin with a deep market should not automatically carry the same purchase margin as mixed, stone-set jewellery requiring assay and refining. The rules engine needs lanes for bullion, coins, scrap jewellery, wearable resale, estates and exception items.
Within each lane, a margin floor should cover direct cost, risk and a target return on inventory capital. Exceptions should require approval and leave an audit trail.
Measure turns as well as percentage margin
A smaller margin earned repeatedly on fast-moving bullion can outperform a larger percentage margin on inventory that sits for months. Meridian's operating scorecard will track realized spread, inventory days, capital employed, settlement time and loss or reconciliation exceptions together.
The business should not count a rising gold market as operating skill. Exposure limits and disposition plans are required so profitability comes from verified transactions and service, not an unplanned directional bet.
Meridian's public promise
Customers should see the reference value, the verified item classification and the final price as separate layers. Meridian will publish its methodology before it publishes claims about being the best price in Vancouver.
The first local pilot will establish real testing cost, conversion, inventory turns and settlement performance before automated margin bands are activated.
Sources & further reading.
Meridian guides are educational. They are not legal, tax or investment advice, and they do not create an offer to buy or sell gold or silver.