Selling Your Jewelry
A Stroll Down Reality Lane
First, let me be clear that what follows includes generalizations and my personal opinions. Without examining your specific item of jewelry and conducting the appropriate research it would be impossible for me or anyone else to provide an accurate value, value range or credible sales advice. Generalizations are intended to give “general” guidance and advice and as always, there are exceptions for which they will not apply. Some examples of those “exceptions” include: “Signed” pieces by famous or collectable designers / jewelers, antique or “period” jewelry that is in excellent or pristine condition or items with “significant” gems or diamonds. For that type of jewelry you should consult a qualified independent appraiser for unbiased advice and a private consultation before you sell.
The purpose of this information isn’t to discourage you or to belittle what may be a legitimate need to convert your tangible assets into cash. My hope is that by introducing some reality into the situation you can approach the sale of your jewelry items with a clearer vision of what constitutes a “fair” offer. Unrealistic expectations can only cause more emotional trauma in what may be an already painful financial situation. I hope you will explore other areas of this website dealing with selling your jewelry, and especially the concepts of “forced liquidation”, “orderly liquidation” and “market value”. As always, you can contact us.
Here’s the short version:
1) Jewelry (gemstones, diamonds, etc) is NOT an investment and unless something unthinkable happens or you hold onto it for decades (long enough for inflation to make a difference) you’re unlikely to recoup your original purchase price.
2) No one in the jewelry trade, at any level, will ever pay you more than a fraction of their wholesale cost for a comparable new item.
3) With few exceptions (pawn shop, second-hand or “estate” jeweler), everyone in the jewelry trade will consider your used jewelry as “scrap” or basically raw materials that they will have to invest time & money into before it can become saleable as new jewelry. As such, they will offer a percentage of their wholesale cost for the materials. It will likely be a reasonable offer, given the reality of their expenses.
4) Used jewelry has limited appeal in the market; especially wedding & engagement rings. Think about it, how many couples in love are in the market for someone else’s rings from a failed relationship? A fair percentage of the retail price of jewelry is based on the “sentimental” value of the buying experience.
5) Unless you’re selling something so amazing and fabulous that the marketplace is eagerly searching for it, you can assume it will take weeks, months or even years to find a private buyer. Most jewelers feel fortunate if they can turn their inventory in a year; and they advertise heavily and have lots of “traffic”. You’re searching for one person looking for the exact style, design, quality and condition of your single item of used inventory and who agrees with your price and has the cash to buy it. (you don’t take VISA, do you?)
6) You didn’t pay wholesale. No one in the jewelry industry is going to sell something to you for less than they could sell it to someone else. It makes absolutely no sense for a legitimate wholesale vendor to take money out of his own pocket and they won’t do it. Any sales pitch to the contrary is likely to be capable of organically fertilizing a large corn field.
Here’s the longer version:
MYTH: Jewelry (gemstones, diamonds, watches, etc) is an investment.
TRUTH: Jewelry is a depreciable asset... much like a car, boat, furniture and clothing.
That means as soon as you purchase a piece of jewelry, it loses a substantial amount of its “value”. It doesn’t matter if you wear an engagement ring for 10 years or 10 days; it is USED jewelry. In general, the longer it is worn, the greater the loss in value; primarily because 2 very important value considerations for used jewelry are “condition” and “style”. In order for any commodity to be considered an “investment” there needs to be reasonable certainty that it will appreciate in value beyond the rate of inflation and there needs to be a readily accessible & active market for buying & selling directly to other “investors”. Jewelry (gemstones, diamonds, etc) meets neither of those criteria. Only the very finest and rarest examples of jewelry (gemstones, diamonds, etc) have the slightest potential to appreciate in value in the long term; commercial grade material is now, has been and will continue to be readily available and cheap. As an antique dealer friend of mine once told me: “If it was cheap piece of junk in 1890, it is now just a very old piece of cheap junk.” It applies especially to jewelry.
MYTH: I have an appraisal for $5000; that means I should be able to sell it for $2500.
TRUTH: Chances are, your appraisal is meaningless (and probably has been from the beginning). If your “appraisal” was provided by the jeweler who sold the item to “help you get insurance” then you need to understand several things. If the “appraised value” isn’t the same as the selling price then it was worthless from the beginning. If the purpose of the “appraisal” was to help you insure the item, then it is a statement of the price to replace the item with a brand new item in that specific store... your USED jewelry is NOT for sale in that store and is NOT new. In exactly the same way that there is no relationship between the MSRP sticker price of a brand new car on the Dealer’s showroom floor and the value of your used car sitting in your driveway. THERE IS NO DIRECT RELATIONSHIP BETWEEN THE PRICE OF NEW JEWELRY AND THE VALUE OF USED JEWELRY. That means, no matter how much we’ve heard “people” say it, the reality is, it is impossible to determine the value of a used piece of jewelry based on an “insurance” appraisal. My job would be so much easier if it was possible to apply some magic formula to arrive at a meaningful value when starting with a grossly inflated “appraisal” by an untrained jewelry salesman... In fact, it is impossible even when starting from a professionally done and accurate insurance appraisal... there’s no direct relationship to the values.
MYTH: I showed it to a jeweler who said it was worth about $5000; so I should be able to sell it for $2500.
TRUTH: Such “off the cuff” valuations are worth less than you paid the jeweler... oh, that’s right, it cost you nothing! And that’s pretty much what you got; or less. Without actually evaluating the item (cut, color, clarity, carat weight of stones, metal quality, quality of workmanship, maker’s mark, etc) and then conducting actual market research (is the style currently desirable in the market, is the maker sought after, what market is appropriate, how long you’re going to spend trying to sell it, who is your target buyer, current gold, silver, platinum markets, auction activity, prices offered by resale retailers, prices paid by resale retailers, etc) IT IS IMPOSSIBLE TO PUT A MEANINGFUL VALUE on used jewelry. Chances are, the jeweler was tossing out a vague opinion of the “retail price of a similar new item” based on zero facts that would make that opinion worth believing. He was probably hoping to make you feel good about him by stroking your ego (or at least not insult you with an actual offer to buy) so you might come back sometime to purchase from him.
MYTH: I want to sell my jewelry, I have to have an appraisal.
TRUTH: Maybe. In most cases, you really need “offers to buy” more than you need an appraisal. We offer a variety of services besides appraisals that can be much more useful for the seller of used jewelry and not as costly. My usual rule of thumb is if the item is very old, very valuable or very unique you may need an appraisal and the authentication / quality analysis and detail that goes with it. If you plan to sell the item to a private party and it is sufficiently valuable to be able to add the cost of the appraisal back into the price, an appraisal may add enough perceived “value” to close the sale. In most other cases, there are other services that work better.
MYTH: I bought it on the internet (or cable TV) for $2500 wholesale; I should be able to sell it for $5000.
TRUTH: You paid retail. Maybe it was a lower retail than in a brick & mortar jewelry store, maybe not; either way, it was still a retail transaction. Ask yourself this question: Could my “customer” buy it from the same place and at the same price that I bought it? Yes, they can. So, why would someone pay you more than they need to? They wouldn’t. No matter how convincingly you were lied to, the fact remains that it was a lie designed to separate you from your money. Chances are anyone in the jewelry trade could buy the same item for less than you paid and have 30 – 90 days to pay for it... they aren’t likely to be interested in buying yours; especially for more than they would pay elsewhere.
MYTH: Jewelers mark-up everything 100% to 300%; if I ask half-price, the jeweler should be willing to pay me that much.
TRUTH: There is no “standard” markup in the jewelry industry. Most of the time, the more something cost a jeweler, the lower his percentage markup (and many don’t even price based on a straight percentage markup). In every market area, the level of competition, the training and services offered by the jewelry store, its status in the community, its overhead and other costs of doing business will determine the amount of gross profit necessary for that specific store to stay in business. You will probably never know the actual markup that any specific jeweler adds to his cost; you can, however, be absolutely positive of the following: No jeweler will ever pay you the same amount for your used jewelry that he can pay for a new one from his wholesale supplier. He can order only what he needs, when he actually needs it, pay only if it sells and get 90 day payment terms; so why would a jeweler want to own it, why buy it from you, for cash, without a known customer? He doesn’t unless there’s a financial incentive to do so... namely a price that is a fraction of wholesale for the materials.
So what can you do?
First, take it to a jeweler and have him tighten stones, clean & polish it to “like new” condition; no matter how you sell, first appearances are important for getting you the best offer. Obviously, if you have an antique or collectable item, only deal with jewelers who know their stuff; and they may advise you that polishing away the patina will lower the value... even if they don’t advise you of that fact, it may be true so use caution.
Second, take a deep breath and try to remove any emotional attachments from what is a purely business transaction. Most of us feel a sentimental attachment to the jewelry we or a loved one has owned; the buyer of your jewelry has absolutely no such feeling and is thinking only in dollars and cents. It is important that you adopt the same attitude and try to see things from their perspective while trying to further your own financial interests. Try not to be insulted by an initial offer to buy; make a counter offer and try to come to an agreement that you and the buyer can live with; remember, it’s strictly business and not personal.
Third, forget about your old insurance appraisals or sales receipts; they are meaningless in this situation. On the other hand, if you have any third party diamond grading reports (GIA, EGL, IGI, etc) that describe the center diamond bring them with you. An impartial quality assessment of the most valuable part of the jewelry will increase the comfort level of the buyer and help you get the most money for your jewelry. In fact, a Grading Report is one of those non-appraisal “services” that we offer and recommend to people wanting to sell their jewelry.
Finally, when your emotions have settled down, don’t be put-off about buying or owning jewelry in the future. Of all of the depreciable assets you might own (furniture, clothing, boats, automobiles, etc), jewelry still retains more of its original price than any other. The intrinsic value of precious metals and gems endures; the difference in monetary worth is largely a matter of markets. The item was probably purchased in the market with the highest price and at the end of the manufacturing & marketing chain but when liquidated it is most often sold in the market for used raw materials... but at least those raw materials still retain some value through time and across international borders.