Should I Buy Gold from an Online Dealer or Local Dealer?

Posted - September 7, 2022
Should I Buy Gold from an Online Dealer or Local Dealer?

The world of buying and selling bullion can be difficult to navigate. This is especially true for first-time investors; there are thousands of bullion dealers, and figuring out which seller is right for your investment goals can seem like a monumental task. Luckily, Hero Bullion regularly publishes content to make buying bullion easier and simpler for the new investor. Today, we’ll be discussing the difference between buying gold from an online dealer or a local distributor. While it may seem like both options are functionally the same, the differences between them can be very important, particularly for someone who is new to the bullion business. 

In fact, one of the most common questions we receive is: “should I buy gold from an online dealer?” Many customers tend to believe that online bullion deals are shadier than in-person purchases. While this might be true for some smaller online distributors, most major bullion dealers operating online have long established their transparency and reputation. 

Hero Bullion is an online distributor. While we do have a local office and showroom, our business is primarily conducted online, and almost all of our sales come from the Hero Bullion website. It should be clear that we have a bit of a bias. Still, we’ll try to remain as objective as possible as we explain the advantages – and the disadvantages – of doing business with the two main types of bullion distributors. 

The main distinction between online and local dealers should be pretty easy to figure out, but things get a little muddy when we talk about companies that do business both online and locally. For the purposes of this article, we plan to classify companies based on how they primarily do business. Like Hero Bullion, many online distributors operate locally as well. And many of your local bullion retailers also have websites where they do substantial business. But if a company is primarily a local distributor, we’ll consider them local. A company that does most of its business online is considered an online dealer. 

If you’re struggling to decide whether an online dealer or local distributor is the right choice for your first (or thousandth) bullion purchase, then you’ve come to the right place!

Buying Gold Online

It’s no secret that this writer has a small bias toward online bullion distributors. There are actually quite a few reasons why so many investors prefer doing business with online bullion dealers, even if local distributors might feel more convenient and easy depending on your general shopping preferences. Once you get past the initial trouble of understanding a company’s return policies, quality assurances, and customer service, you’ll find that buying gold online can be a rewarding and profitable experience. 

Still, online dealers can come with their own downsides. For the most part, dissatisfied online bullion buyers complain about unfair customer service, shipping mishaps, and quality qualms. We don’t want to gloss over some of the legitimate concerns that investors sometimes have with buying gold, silver, or platinum online. 

In the next two sections, we’ll cover both the pros and cons of doing business with an online gold distributor to help you decide between buying from an online gold dealer vs. local gold dealer (or any bullion for that matter).

Pros of Buying Gold Online

Buying gold online comes with a few major advantages. Because online distributors are typically larger companies than physical local retailers, making the call to buy gold online can save you both money and stress. New gold consumers have quite a bit to contend with; it can be tough to verify the authenticity of a gold coin or navigate technical terms like “spot price” and “price action.” When consumers purchase their first gold coin, bar, or round online, their goal is simple; they want their gold purchase to be pure, affordable, and hassle free. 

In this respect, consider some of the main upsides to making your first gold purchase using an online retailer: 

  • Wide Selection. For obvious reasons, local retailers can only provide a limited stock of items. While some larger local distributors might make a special order for return or big-ticket customers, there’s only so much gold that can be feasibly or safely stored in a physical commercial location. Online retailers do not have this problem; most retailers secure partnerships with major mints in order to offer the widest variety of precious metal products they possibly can. In fact, this is one way that online gold dealers secure a larger share of the competitive market. Whether you’re looking for a particularly rare coin or a common gold bar, online retailers will always have what you need. 
  • Affordability. One common misconception is that online gold distributors charge higher prices than local shops. This might sometimes be the case, especially if you choose to do business with a brand-new online dealer. However, even small online operations generally do more business than your local gold dealer or pawn shop. This means that larger online gold dealers can afford to cut costs on the consumer end. When you buy gold online, you may pay extra fees, including shipping. But even with these fees included, you’re still likely to pay closer to spot than you would when buying from a local gold dealer. 
  • Transparency. If you’ve ever stepped into a shady local gold dealer’s shop, you should already know that online dealers blow local operations out of the water when it comes to transparency. Hero Bullion’s site automatically lists the spot price for gold, and our checkout page displays all relevant taxes, fees, and shipping costs before you complete your order. Also, online gold dealers require no haggling for shoppers wanting to avoid that interaction. Online bullion distributors are more transparent than most local gold dealers. 
  • Convenience. Buying gold online is extremely convenient. By purchasing your next gold coin or bar online, you can save money by comparing prices, communicate directly with distributors, and have your gold shipped directly to your door. While walking into a shop and picking up a gold coin might seem easier, the hassle of going from physical shop to physical shop to compare prices hardly makes it the more time efficient choice. 

Cons of Buying Gold Online

While we believe that many of the complaints about online gold dealers are based on misconceptions, there are certainly at least a couple downsides to consider if you decide to buy gold online. Because online dealers don’t usually allow you to conduct transactions face-to-face, online gold buyers are forced to rely heavily on the customer service and transparency of an online bullion dealer. Additionally, some bullion companies are notorious for lazy shipping practices, which can lead to scuffed or damaged coins arriving in your mailbox. 

Here are some of the main disadvantages of buying gold online: 

  • No Human Interaction. This is very important to some bullion consumers. While companies like Hero Bullion provide consistent online customer support, not all organizations are responsive to the questions and needs of their customers. If you’re an old-school consumer, you might prefer the personal touch of doing business at a physical location. This is obviously something that online bullion dealers usually can’t provide. 
  • Shipping Issues. When you buy a gold coin or bar from a pawn shop or physical dealer, keeping your product safe is as easy as driving carefully on the way home. The same cannot be said for online gold purchases. When you buy gold online, it’s tough to be sure that your coin will be packaged and handled properly. We’ve heard horror stories of consumers receiving damaged coins after months of anticipation. Hero Bullion carefully packages its coins to minimize the risk of damage and offers a full replacement policy for any damaged coin. 

There might be a few more downsides to buying gold online, but we find that most issues with online purchase have more to do with the source company than the institution of online gold sellers itself. 

Buying from a Local Gold Dealer

Don’t get us wrong; we strongly believe that online dealers offer the greatest degree of transparency and affordability for gold buyers. However, it would be dishonest to argue that local coin dealers don’t offer their own major advantages. For consumers who enjoy doing business using classic human interaction, online gold dealers cannot compete with local gold dealers. When we compare the online gold dealer vs. local gold dealer, the decision that’s right for you is likely to come down to personal preferences. 

The following sections will cover both the advantages and disadvantages of buying gold locally instead of doing business with an online gold dealer. 

Pros of Buying Gold from a Local Gold Dealer

For some buyers, there’s nothing like doing business face-to-face. This represents one of the main appeals of buying from a local gold dealer. Many consumers in the gold sector are already naturally distrustful of big institutions, including banks and the stock market. It can be hard for some first-time buyers to put all of their trust in a person that they can never have a genuine conversation with. 

Additionally, buying gold from a local retailer means that you’ll have the gold immediately. While shipping can be a quick process if you pay the right price, no online retailer can deliver your gold faster than you could pick up a gold bar from a local pawn shop. 

Here are two of the main advantages of buying gold from a local gold dealer: 

  • Face-to-Face Interaction. Like we noted above, this is a huge reason why so many first-time buyers prefer to do their business with a physical, local gold shop. It’s tough to beat the feeling of buying something while doing business directly with an individual. For experienced consumers, this aspect of local gold purchases might provide an added peace of mind. 
  • Immediate Access. When you buy gold locally, there are no shipping costs, and there is no wait time for your product to be mailed to you. As soon as you walk out of the shop, you can admire your locally purchased gold bullion products. We tend to think that a little extra wait time is well worth it for the many advantages offered by online purchases. However, the human in us loves instant gratification; and it feels great to hold your new gold piece as soon as you put your money on the table. 

Cons of Buying Gold Locally

We should preface this section by saying that at least some of the problems associated with local gold purchases can be avoided if consumers carefully research their dealers before doing business with them. Some local dealers might be shady. But if this is the case, then a quick internet search of reviews should give you a better idea of whether you want to do business with these shops. 

Still, there are a few objective downsides to buying gold from a local gold dealer. Some of the main issues with this approach include: 

  • Poor Returns Policies. Many local gold dealers might have little or no refund policies. This can make it difficult – if not impossible – for consumers to get their money back if their coin turns out to be damaged, impure, or otherwise faulty. To avoid this issue, carefully consider the returns policy of any local dealer. Online dealers, including Hero Bullion, offer comprehensive return policies.
  • Higher Prices. Some local dealers might be able to offer gold bars or gold coins at a fair price, but most local shops are going to mark their products up significantly in order to sustain profits and remain competitive. Online dealers are able to cut costs by maximizing partnerships with mints and catering to a much larger base of customers. While comparing online prices with local shops is always a good idea, the edge almost always goes to online dealers. 
  • Little Transparency. Local dealers often fail to display the spot price of gold in their shops, and many dealers might not even include a breakdown of costs when you buy gold from them. This is especially true with shadier retailers. It might also be hard to get a clear picture of the purity of your coin if you choose to buy gold locally. 

Final Thoughts: Online Gold Dealer Vs. Local Gold Dealer

Even if we put our bias aside for a moment, we have to give the edge to the online gold dealer. While there’s a human desire to do business face-to-face and receive your gold products immediately, these advantages hardly compare to the lower costs, higher transparency, and wide selection, and convenience of buying gold online. 

We’re always happy to answer any additional questions you might have about buying gold from an online dealer. Buying gold doesn’t need to be complicated – and Hero Bullion is happy to help make it a pain-free experience. 

About The Author

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Hero Bullion provides an environment that is informative and safe for those looking to own physical gold and silver bullion as an investment. We love helping folks at all stages throughout their bullion journey making progress towards acheiving their financial goals. Whether you are a seasoned bullion investor or brand new to the game of gold and silver bullion ownership, we're here to help and serve you in any way we can.