Entrepreneur Q&A: Rob Halliday-Stein, Bullion By Post

Meet the man who's shaking up the staid gold bullion industry with a user-friendly, online shop. Rob Halliday-Stein, founder of Bullion By Post, on the recession, the problem with diamonds, and The Italian Job.

by Rebecca Burn-Callander

Gold is all the rage these days. Seen as a safe investment, the precious metal has spawned a raft of businesses of the pawnbroking ilk.: ‘We pay cash for gold!’ scream advertisements. But there is another industry quietly making a mint off the back of the new gold rush: bullion traders. MT caught up with Rob Halliday-Stein, founder of Bullion By Post to find out whether all that glisters really can make you pots of gold…

MT: What does Bullion By Post do, in a nutshell?

RH-S: We sell gold and silver bars and coins to individuals over the web. We buy the gold from the big, European refineries – Umicore and Metalor are two of the largest – and most of our coins from the Royal Mint, pay wholesale prices, and sell it on. It’s a straightforward mark-up business.

And when you say, ‘By Post’, does Old Postie have to go out there, spluttering and sweating, carrying these bars of gold?

They aren’t as heavy as you would think. We supply small bars, which weigh anything from 1g to 1kg – the latter would set you back around £35,000. These are different from the bank-size bars you see in The Italian Job – those come in at 12.5kg. We send the bars out using Royal Mail Special Delivery. It’s discreet – you don’t see a massive Securicor van pulling up outside your house – and reliable. We’ve sent 35,000 packages and never lost one. To be on the safe side, we are covered by Lloyds of London for £50,000 a package.

How much gold does your average customer buy?

The average order is worth around £3,500 – roughly 100g of gold or 4kg of silver. But people spend as little as £30 on a commemorative gold sovereign and as much as £0.5m on the bullion. We don’t send that through Royal Mail obviously. They tend to collect, or we dispatch using a company like Loomis.  

Why are people buying all this gold?

The common thread that unites all of our customers is that they’ve lost confidence in the banks and government’s ability to look after the economy. They turn to gold and silver as a way to protect their money with something tangible. After all, inflation could wipe out the value of your savings overnight.

And is gold big business over here? How many people go to bed at night with a few ingots shoved inside their mattress?

It’s still pretty unusual for people in the UK to buy gold. Over in Germany, it’s commonplace. You can go to the bank and buy a gold bar; the same in India. But then, in 2008, there was the banking crisis and we were moments away from cashpoints not working, so gold suddenly became a viable option.

Is that when you decided to launch Bullion By Post. What’s your story?

I used to be in the fashion business, believe it or not, as head of online for George at Asda. While I was there, I lost my mum suddenly and inherited a little money. I wanted to put it into gold and silver but couldn’t find anyone offering clear pricing and decent customer service. Most of the dealers I spoke to were completely disinterested – rude, even – and expensive. I decided there was a gap in the market, learned all I could, and started the business.

You make it sound easy…

I got lucky. I made contact with someone who runs the UK office of one of the large refineries. He sold me some of the gold and silver I wanted at a good price and that’s when I saw the opportunity. I agreed a drop ship arrangement with him - I would take orders and then he would dispatch the gold. Bullion By Post developed from there. After three years, I now have 12 staff and I turned over £55m last year.

Has the ongoing eurozone crisis and UK recession been good for business?

In a way. This has certainly been a good week for us. The ECB announced that they’d fixed everything one day and then, bang! It turned out they hadn’t fixed anything. Whenever the price of gold goes up, that means people are losing confidence and want to protect their money. And there are plenty of people who aren’t feeling too comfortable right now.

And what about expanding into other precious metals, or other commodities like diamonds?

The problem with diamonds is that they’re always a better grade when you’re buying them than when you’re selling them. With gold, it’s almost like dealing in currency. A bar of gold is a bar of gold. People understand what they’re paying for. I might get into other precious metals like platinum and palladium. But the great thing about gold is that under the UK tax system, it is VAT free, which is a huge bonus for us. So, unless something changes in taxation rules, we will be focused on gold.

Find out more about Bullion By Post

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