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Pricing Guide
Understanding "Spot" vs Physical Pricing
If you've ever looked up the price of silver and noticed our product prices are higher, you're not alone — this is one of the most common questions new buyers have. The answer is straightforward once you understand how physical silver is priced.
What Is the Spot Price?
The spot price is the real-time market price for one troy ounce of silver for immediate delivery on commodity exchanges like the COMEX. It fluctuates throughout the trading day based on global supply and demand, currency movements, and investor sentiment.
Think of the spot price as the raw material cost — the baseline value of the silver itself.
Why Does Physical Silver Cost More Than Spot?
When you buy a physical silver bar, you're not just buying raw silver. You're paying for:
- Minting and fabrication — The cost to refine, cast, and stamp the silver into a bar or coin.
- Distribution and logistics — Shipping, insurance, and storage costs along the supply chain.
- Dealer premium — A small margin that allows dealers like McFarland Metals to operate and serve customers.
- Handling fee — McFarland Metals adds a 2% handling fee to all orders to cover secure packaging and processing.
The difference between the spot price and what you pay is called the premium over spot.
A Simple Example
Sample Calculation — 1 oz Silver Bar
Silver spot price
$30.00
Premium over spot
+ $3.00
2% handling fee
+ $0.66
Your price
$33.66
This is completely normal and consistent across the precious metals industry.
Is Buying Above Spot Worth It?
Yes — for most investors, the premium is a small price to pay for the security of holding a tangible, physical asset. Unlike paper silver (ETFs or futures contracts), physical silver bars give you direct ownership of the metal with no counterparty risk.
Alabama Tax Exemption
Good News for Alabama Buyers
Precious metals are tax-exempt in Alabama through 2028, which means you won't pay sales tax on your McFarland Metals order. That's a meaningful saving, especially on larger purchases.
Questions?
If you have questions about pricing or want to understand the cost breakdown on a specific product, contact us — we're happy to walk you through it.