A Birmingham-based bullion company has seen a massive gold rush – and is celebrating sales of £87 million just five years after a modest £10,000 launch.
BullionByPost, which has mushroomed to become the UK’s largest online bullion dealer selling gold and silver bars and coins to private investors, has cashed in on increasing demand for tangible assets in the fragile economic climate.
The Birmingham company, founded in 2008 by entrepreneur Rob Halliday-Stein with just £10,000 investment, saw sales hit £87 million in 2012-13 – a rise of 58 per cent on the previous year.
The firm made a profit of around £2 million last year and is forecasting turnover exceeding £120 million next year.
BullionByPost has been so successful it is moving from its base in the Jewellery Quarter to new city centre premises in Hill Street, and is creating 10 new jobs.
The economic downturn, fears over the Eurozone and growing concern over the safety of banks has made many investors consider buying gold and silver bars and coins to protect the value of their money.
Meanwhile, the sharp fall in price of gold in April led to a significant rush in demand, with weekly sales hitting a record £4.7 million.
Mr Halliday-Stein said: “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.
“We have also increased our market share as our passion for great customer service has driven record repeat orders and recommendations.”
Mr Halliday-Stein said he planned 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 new purpose-built premises in the heart of Birmingham gives us the space to significantly expand the team.”
Mr Halliday-Stein launched the 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.
An added attraction for investors is the lack of VAT on investment gold, while British coins are exempt from capital gains tax as they are classed as legal tender.
Due to demand from customers, Mr Halliday-Stein has been working with The Royal Mint, which supplies brand new Sovereign and Britannia coins.
Nick Bowkett, Bullion Manager at The Royal Mint, said: “Thanks to our proud heritage and expert craftsmanship, The Royal Mint’s Sovereign and Britannia coins are recognised the world over.
“Since the dip in the price of gold, The Royal Mint has seen a steep increase in demand for its gold coins which has continued over recent months.
“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, and are insured by Lloyds of London up to the value of £50,000 per delivery.