Alan Demby, founder of the world’s only gold coin retail chain.

We believe that 15% of every investment portfolio should comprise gold coins

Bullet Bio

• Born: Manchester, England in 1955
• Served as lieutenant in the South African army
• Owner of The South African Gold Coin Exchange since 1992
• Founder of Scoin Shop, the world’s only gold coin retail chain
• Finalist of the World Entrepreneur awards competition, organised by Ernst & Young in 2008

In 1980 Alan rented his first offices and started coin dealing on a full time basis under the company name of Gold Club. Since then his business has been on the up. In 1992, he bought The South African Gold Coin Exchange and went on to open the first Scoin Shop seven years later. To date, there are 25 Scoin Shops throughout the UK and South Africa that turnover approximately £60m per year.

How did you first get involved with dealing in gold coins?

I was called up to the army for two years and during my service a friend suggested that we deal in Kruger Rands. I’d never seen one before but nevertheless we put an advertisement in a newspaper, did a deal and bought a few coins. At the time (1977) I was based in Pretoria and the instruction came from my friend to go to the gold exchange and sell the coins we had bought. It all started from there.

How has your business evolved over the years?

In the army I learnt about buying and selling coins and met some coin dealers. So when I finished training I decided to go into it full time. I dealt via the newspapers and two years later started the Gold Club. It was just a little one man show but it slowly built up and then in 1989 I bought a company called the Gold Investment Corporation from SAGE Holdings. This company was involved with selling Krugerrands on a credit system, so it was a logical move for us as we had already made our coin sets available to purchase on clients’ credit cards. In 1992 we went on to buy The South African Gold Coin Exchange which is the brand used today.

You went on to set up Scoin Shops – tell us more.

In 1999 we relocated from the centre of Johannesburg to Sandton. Here there is a huge shopping centre called Sandton City where we opened our first Scoin Shop to try and attract the tourist market. This was successful and gradually more locals also became interested. Today we have around 50 stores throughout the country selling bullion and collectable coins.

What has led to the success of the Scoin Shops?

I think Scoin Shops have been successful because we democratise gold buying for the man on the street and pick themed coins that attract customers. Our Mandela medallions for example have sold very well.

You now have Scoin Shops in the UK. Why did you choose to come here and what challenges have you faced?

The conventional wisdom for South African companies wanting to expand is to come to the UK. The time difference isn’t an issue, it’s a simple flight away and of course there is no language barrier. We have three stores so far and plan to develop further. It’s tough to get established here because starting costs are much higher. However we have done some good deals with the British Royal Mint, we’ve got the rights to promote and market the Manchester United medallions which have been very successful and were involved with the Kate and William coins.

How did you come to be affiliated with the Nelson Mandela foundation?

From travelling to many different coin shows around the world I discovered that the mint of Norway had assembled a Nobel Peace Prize Laureate program. They approached the institute around 10 years ago and arranged to make a medallion of each winner of the Nobel peace prize. Royalties from the sale of these coins go to the Nobel Institute and to the winner’s foundation. Through our involvement with the mint of Norway millions of rands have gone to the Nelson Mandela Foundation, which is a fantastic cause.

Source: www.thesouthafrican.com
By Fred Quick on 23 January, 2012

2011 has seen a post-recession gold rush topping record prices. Many investors have moved away from property, shares, bonds and other commodities to get their foot in the door with gold. Everyone wants a piece of the action!

And the gold Bull Run continues: gold smashed through the $1800 per ounce resistance point earlier this year, and then through $1900 in August.  As the 11-year Bull Run continues, it is not unreasonable to expect gold to reach levels of $2000 and beyond, sooner than anyone expected.  Gold coins, medallions and bullion sales have consequently ballooned in 2011.

The reasons behind the continued Bull Run of gold are:

• Post-recession uncertainty in the market
• Economic turmoil in the Eurozone and emerging markets
• The unclear economic policies of the USA on quantative easing
• Riskier investments such as shares and emerging markets avoided
• Gold remains the safe haven or hedge against inflation

From Investor to Collector

While most buyers venture into the gold market with profit in mind, many become connoisseurs of gold coins and gold medallions. Bullion is subject to periodic profit taking when gold prices are high, but collectable coins tend to show a greater return on investment over the long term. Thus investors become collectors, knowing that over the longer term they can build a collection of a series of coins, and gain more from an entire set than from single coins or medallions.

When to Buy and When to Sell

With the current gold price at record high levels, any correction (or dip) in gold prices will signal the buyer to action in building a gold portfolio. Buying gold bullion coins, numismatic coins and collectable medallions is a tangible and exciting way to own gold. It is also a market which is easy to understand, easy to get into and easy to make a profit in.

• Collectable gold coins and medallions should always be bought when their price is lowest, or nearest to their release date. To financially benefit from collectable gold coins, they should be sold when their price is at its peak, normally four to seven years from the release date.
• Bullion coins should be bought when the gold price is low, and the Rand is strong. Conversely, bullion coins should be sold when the gold price is high and the Rand is weak to make the most profit. Bullion is viewed as a long term investment since the gold price in day-to-day trading can be volatile, yet an upward trend is visible over the longer term. South Africa’s bullion coins are the Krugerrand coins.
• A combination of collectable coins and Krugerrand bullion coins is preferable, to spread the risk of your portfolio and to give you the best opportunities of both. Bullion coins are not subject to VAT, but both bullion and collectable coins are subject to capital gains tax on reselling.  Speak to your tax advisor or local SARS branch for more details

Where To Buy Your Gold

As with any investment, it is advisable to do your homework before making any purchase. Deal only with reputable companies and be careful when buying coins from the public. Many new players have recently entered the market, so it is wise to compare the product offering and pricing, keeping in mind the terms and conditions. Prices may vary if larger amounts of coins are purchased. Hidden costs may be in the delivery and storage terms, and brokerage fees.  With all that said, there will never be a better time to start your gold portfolio than now!