APMEX Statement On Current Market Conditions:
February 26, 2021 Update
Thanks to the significant efforts of the APMEX team, we have continued to make significant progress in getting caught up on orders. To give you an idea of the magnitude, with not operating full shifts due to weather for much of last week - we worked the entire weekend. Even more impressive is we had more than 30 volunteers from other parts of the company come in on their weekend to help get orders out. This type of commitment and teamwork makes me proud to be a part of this company.
We are lowering our delay to three to five days as of today. The plan was to lower the delay even further, and we were targeting being current by the middle of next week, but yesterday was one of the top five volume days for us in 2021 so far, and today is off to a blazing start. The great news is we have hired more than 20 individuals in the last three weeks for Operations, so we are better prepared for this type of surge.
As we look at product availability, there are still many challenges. Below are a few updates:
- Production Silver: This has been our top-selling area for several weeks now. As some of you may know, we run our own mint and have taken steps to increase capacity. Additionally, two of our mint partners are now producing two times the average volume for APMEX on a weekly basis. All of this allows us to have live products or minimize delays. Some of our competitors claim to have live products, but they take more than two weeks to fill orders. That is not the case at APMEX.
- Gold Bars: These continue to be a struggle to the source. A couple of our partners are now limiting production to a couple of sizes to catch up with demand. Popular products like the Credit Suisse Gold bar are not currently available for sourcing. We believe Gold bars will continue to be challenging to source for at least a few weeks.
- Gold Coins (Eagles, Maples, others): We have been trending in the right direction here by branching out to various sovereign mint offerings. Currently, several are on pre-sale as we have been able to source and are awaiting products to arrive. Our primary concern here is the demand. Yesterday, for example, we saw Gold coin sales ramp more than 300% as the equity markets struggled. If this kind of demand sustains, we could have some struggles maintaining in-stock product.
Finally, for those customers who have an order shipped or packages en route to APMEX, we are seeing delays with the carriers, and, in some cases, their scanning data is not being updated. We have been told the scanning piece will be addressed by tomorrow.
I can assure you that we are not holding onto any packages, nor are we behind in receiving, as we have made that area a priority since we need much of that product for any pre-sale orders.
Our customer service team has sent out various communications in the last week to keep everyone informed, and we will continue to do so. Our only ask is for some patience with the carriers. Now that the weather is behind us, they are catching up quickly and should be back to normal within the next week.
February 15, 2021
In the last seven days, we have seen volumes begin to slow down from the historical highs, as we expected. With that said, we are still 30% heavier than an average week and have been able to keep up. We were trending toward having no delays by the end of this week.
Additionally, our inventory levels are significantly improving. Our manufacturing partners have exceeded our expectations on production volumes, and we have north of $75 million in inventory in route. The main issue experienced last week was delays in shipping due to the weather in the Northeast.
Unfortunately, mother nature has thrown us a curveball with the weather in Oklahoma City, with extremely low temperatures, negative-degree wind chills and high snow levels. We are also expecting a second wave of snow on Tuesday. As a result, our staffing levels are low, and we will not be able to keep up with demand. Although we are working hard, we have made the difficult decision to extend our shipping delays from three to five days to five to seven days. This is mainly because we do not expect to be back at full staff until Thursday at the earliest. We also do not expect our carriers will be running for a few days.
We apologize for the delays. Trust that our team is doing everything we can to get orders out while still keeping everyone safe. For your specific revised estimated ship date, you can check your order status here.
February 8, 2021
APMEX has continued to see above-average activity since the surge in demand from last weekend. Our demand from Tuesday through Sunday is still more than two times our average demand. Silver demand continues to be strong while Gold is still selling above average. When Gold dipped below $1,800, many of our customers took advantage of the buying opportunity.
At this time, we are estimating a three to five day delay in processing times. This is a conservative estimate, as we do not want to over promise and under deliver. Our Ops team is working six days a week, and we have added significant resources. The team is working on orders with estimated ship dates three to four days ahead. Depending on this week's volumes, we feel we could be off delay as early as next week. This level of service is unique in our industry and something we take great pride in.
From an inventory standpoint, we are seeing mixed results in our efforts to procure inventory. The excellent news for our customers is that we only sell products when we have confirmation that the product is live. Additionally, as stated above regarding not over committing, our pre-sale dates tend to have five to seven days of cushion to protect against any unforeseen circumstances. Below are some product-specific updates:
- U.S. Mint Eagles: There are significant concerns around product availability. We have been given our allocations from the Mint through July, which is when the new design is currently planned to launch. We have been able to source some inventory at tremendously high premiums. Even then, unless the Mint changes their approach, we expect Eagle demand will dramatically exceed supply, and little will be available in the markets by the April or May time frame.
- Production Silver: Our suppliers are at maximum capacity. Premiums are up more than two times from just two weeks ago, although we are having success getting back in stock. It is also helpful that we have our own Mint that produces various poured Silver bars. Based on the number of pre-sales, we are approximately two weeks from having live inventory.
- Gold Bars: These have become very difficult to find. We have bought out any bars available from wholesalers and have tapped various Mints from around the world. The good news is that we have a significant amount of ounces in transit. Our primary concern at this stage is our partners are unable to commit further into the future.
Thank you again for your patience during these unprecedented times. Rest assured, we are doing all we can to get the product out and source additional metal. We encourage customers to login into their accounts to see where we stand on your orders. For any orders that are past the estimated ship date, which are minimum, you will have already been contacted by our customer service team.
January 31, 2021
In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.
Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend but clearly could not have predicted the volumes that were seen. We have partnerships around the world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history.
As we evaluate the markets, it is difficult to know where Silver's price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.
We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.
Since opening our doors in 2000, APMEX remains one of the largest sources in the Precious Metals industry. Over the last two decades, we have sold more than $12 billion in Gold, Silver, and other Precious Metals in more than 60 countries around the world, serving over 1M customers in the process. We pride ourselves on providing the best overall experience including an intuitive website, information-rich app, fast shipping, and exceptional customer service. For additional information, visit APMEX.com or call (800) 375-9006.