What does the premium actually pay for?
Fabrication is the first layer: a minted coin costs more to produce than a cast bar, and small denominations cost more per ounce than large ones. Then come shipping, insurance, and the dealer's operating margin.
Because every legitimate seller faces similar underlying costs, unusually low premiums deserve as much scrutiny as unusually high ones. The premium is where the economics of a deal actually live.
Why do premiums differ so much between products?
A one-ounce government bullion coin might carry a mid-single-digit percentage premium in normal markets, while a proof or 'exclusive' collectible coin can carry multiples of that. The metal content may be identical; the pricing structure is not.
Premiums also expand across the board when physical demand surges and supply tightens. A premium that was typical two years ago may not be typical today, which is why ranges, not fixed numbers, are the honest way to talk about them.
How does the premium show up in practice?
On a written quote, the premium appears as a dollar amount or percentage over a stated spot reference. If your quote shows only a total, ask for the premium per item in writing, a transparent dealer will provide it without hesitation.