The Truths and Nonsense Continued

Many people are unhappy when selling their valuables. Years later, many find out they paid too much for their items.   An educated seller is our best customer. If you do your homework, you will find that our offers are fair and close to market value.  

Many customers have had their appraisals for many years. They believe that their items are worth a reasonable percentage less than what is stated, or at times the full amount.

When customers realize that the actual value is far less, most are disappointed and, at times, very upset. Many cannot believe that the jeweler over graded their diamond by at least one grade. This can be huge when the grade goes from an SI to an I1 clarity. This is VERY common. We see it every day. In fact, about 75% of appraisals are inaccurate.

Yes, this is hard to fathom, but true.  To confirm a grade, we ask many customers if we can remove the center diamond and send it to GIA free of charge. This shows our sellers the actual grade of their diamond.

We can only make money if we purchase items every day. We pay based on demand and desirability.  

A diamond band with the SAME diamond weight as a ring with an amethyst that is surrounded by diamonds can be worth double. Why? There are 100 times more ladies who want a diamond band rather than an amethyst and diamond ring. Also, amethysts, regardless of what you were told, are worth very little.

Can you get more? Sure, but unlikely. You can try eBay, Facebook Marketplace, or other places to sell to end users. With jewelry, this is much more difficult than it seems. It is easier with preowned handbags, some watches, and many signed items. Even so, after the fees, it is not usually worth the trouble and your time.

Our store is on the corner of Jewelers’ Row.  Many customers see us first when they come to sell their valuables.   It is usually a disadvantage for us when we make the first offer.  Let’s say we offer $5,000. The customer believes we are low and decides to shop around. They go to another store and receive an offer of $4,700. Again, they leave. The third store offers them $4,800. They decline but now realize that their item is worth around the $5,000 we offered to pay.    The jeweler asks what is the most you have been offered? The customer states our offer of $5,000.  The jeweler says I will give you $5,100.  The customer is not going to walk back to us, so they sell the item. We would have paid the $5,100, but because we were first, there was no chance of us buying the item. The customer thought it was worth more at that time. 

Are jewelers over grading diamonds? A resounding yes. We have purchased thousands of diamonds with appraisals and non-GIA certificates. We have found the MAJORITY to be overstated by at least one or two grades, impacting their value.  Many are appraised in a ring which is somewhat like guessing.  Expert advice: Trust GIA-certified diamonds for accuracy and value.

Appraisal values are usually meaningless and inflated, misleading customers. A $11,500 appraisal may have a wholesale value of $3,500 if that.  Shoppers are urged to understand that an item’s worth is what someone will pay for it, not what’s written on the appraisal. Appraisals values are given to make a customer feel good.  Ignore them.

Many times, it is better for the customer to tell us what price they are looking for before they mail us their item.  We can let the customer know in advance if the amount they are expecting is realistic.   The amount on an appraisal is meaningless.  There is no reason to waste time if a customer has not done their research and is expecting an unrealistic value.

Insurance companies may opt to replace lost diamonds instead of paying inflated appraisal values. Consumers are advised to read policies carefully and consider the true value of their jewelry.

Black, blue, coffee, and other colored diamonds are often a marketing ploy. These stones are typically low-quality white diamonds treated to appear unique, reducing the retail price but offering poor resale value.

Lab-grown diamonds have surged in popularity lately, flooding the market with options. But why the sudden craze? One major draw is the remarkable profit margins they offer—skyrocketing beyond traditional mined diamonds. For consumers, the appeal lies in their significantly lower price tags compared to natural diamonds. However, this seeming bargain often masks a less-than-ideal deal, as many jewelers capitalize on the knowledge gap, taking advantage of customers' lack of understanding of diamond pricing dynamics.

Moissanite’s resale value is negligible. Buyers should be aware of the value of moissanite is near zero. Buy natural diamonds.

Colored Gemstone pricing can be misleading and inflated. Customers are often unaware of the true value so jewelers can take advantage. Seek stones with reputable grading certificates from institutions like GIA or AGL for high-value gemstones. Smaller, low quality-colored stones are usually not worth much. There is a huge mark up.Beware.

Colored Gemstones, especially expensive ones, are frequently treated with heat or oil to enhance their appearance. Buyers are urged to request GIA/AGL certificates to disclose any enhancements and understand the stone’s true value. Many diamonds are filled, lasered or treated in other ways to hide imperfections.

Financing, sales, and trade-up policies increase the price customers pay. Stores that avoid these practices offer a fairer shopping experience.  The customer is paying hefty fees and interest for this. Who wants to buy jewelry for say $2,000 and then see the item on sale at 30% off? No one.

Sadly, yes, 100%!  We have purchased thousands of diamonds and other items with appraisals and certificates from NON-GIA grading services. Eight out of ten, misstate the color and clarity of the diamond by one or two grades. Insist on a GIA certificate for most stones over .50 carats. 

This happens all the time, mostly with better watches. Our competitors quote a price that is usually higher than what they can really pay. They base the offer on whether the item is near perfect, with a box, papers, etc. When the item is received, they find reasons to offer less money than their original quote. Watches are very competitive. If we offer 10K for a Rolex, a competitor might offer $10,750. They receive the watch and proceed to offer the same 10k as us, once they see that it is not new. They find a reason to knock something about it to decrease their offer. Since they already have the item, the customer usually sells it when, in fact, our offer was about the same. We could do this, but we make fair offers based on market value.

Sky high prices. Many times, lower carat, and quality. You are paying their rent, marketing, and employee costs

The high mark-up or profit margin on jewelry can often be puzzling. Why is this the case? There are a variety of reasons to consider.

One factor is the difficulty consumers face in comparing prices and items, leaving them somewhat vulnerable to the pricing strategies of jewelers.

Another significant reason is that many jewelers are unable to afford to pay for their inventory upfront, which limits their ability to negotiate favorable deals with suppliers. Instead, they often opt for extended payment terms, spanning from 90 to 360 days, which diminishes their bargaining power.

So, how can consumers ensure they’re not overpaying? One effective strategy is to purchase pre-owned items. Unlike cars or furniture, jewelry typically doesn’t experience wear and tear, making pre-owned pieces a viable and often more affordable option. After all, people are already accustomed to buying pre-owned watches and handbags.

Most are unrealistic. They ask so much more for diamonds than they would pay. 

If you sell or trade your Genesis in to say a Cadillac dealer, they probably do not want it, and therefore will have to offer you less to be able to wholesale it right away.

The same applies to us. We have been in business, having a retail store on Jewelers’ Row in Philadelphia for 35 years. We have customers for many different valuables and therefore can pay more for many items, because as mentioned above, we keep them for stock. However, there are many items that we and most buyers cannot easily sell. You, the owner, paid good money for them, but they are not too salable. These include most 10KT, cluster rings, dated or old-fashioned items, miracle top rings, lower quality colored stone rings, and more.

Most people have no idea what jewelry or diamonds are worth. They need a gift for someone, are in the moment, and feel extravagant.

Unlike Amazon, Car dealers, supermarkets, and other places, it is very hard to compare jewelry prices to know what a fair price is.

If you paid $3,000 for a ring and can get $750 that could be good. 

The high mark-up or profit margin on jewelry can often be puzzling. Why is this the case? There are a variety of reasons to consider.

One factor is the difficulty consumers face in comparing prices and items, leaving them somewhat vulnerable to the pricing strategies of jewelers.

Another significant reason is that many jewelers are unable to afford to pay for their inventory upfront, which limits their ability to negotiate favorable deals with suppliers. Instead, they often opt for extended payment terms, spanning from 90 to 360 days, which diminishes their bargaining power.

So, how can consumers ensure they're not overpaying? One effective strategy is to purchase Pre-Owned items. Unlike cars or furniture, jewelry typically doesn't experience wear and tear, making Pre-Owned pieces a viable and often more affordable option. After all, people are already accustomed to buying Pre-Owned watches and handbags.

                  A.  The mark up of jewelry is usually sky high so even a “deal” is not a deal. 

                  B. It is very hard to determine what to pay.  With cars, motorcycles, graded sports cards, many antiques, graded coins, some handbags, and other items, you can research previous sale prices.  You cannot easily do this with jewelry.  There are too many variables.  Diamonds are getting somewhat easier with sites like Blue Nile, Rare Carat, and others. 

Let’s say an item costs you $10,000.  The manufacturer sells it to the distributor for $4,000.  The distributor sells it to the wholesaler for $5,000.  The wholesaler gives terms to the store, maybe 90-120 days to pay for it at $7,000.  The store sells it to you for $11,000.    It’s liquid at about 3000-3500.

Sad. 

For the most part this is nonsense.   Most honest, well-financed, and reputable companies will pay about the same price for your valuables. If you were selling a decent used car and took it to three reputable dealers, the offer prices should be within 5% of each other. If one is much lower, you are being taken advantage of. Could one dealer pay more at times? Yes. If you have a Genesis in good condition with normal miles, a Genesis dealer may offer you more than other dealers. Why? Because they will keep this car for their inventory rather than sell it to a wholesaler or at an auction.

If you sell or trade your Genesis in to say a Cadillac dealer, they probably do not want it, and therefore will have to offer you less to be able to wholesale it right away.

The same applies to us. We have been in business, having a retail store on Jewelers’ Row in Philadelphia for 35 years. We have customers for all types of different valuables and therefore can pay more for many items, because as mentioned above, we keep them for stock. However, there are certain items that we and most buyers cannot easily sell. You, the owner, paid good money for them, but they are not too salable. These include most 10KT, cluster rings, dated or old-fashioned items, miracle top rings, lower quality colored stone rings, and more.

More nonsense.  The store that advertises this is making very good money on the new item you are buying, so they state this nonsense. When a car dealer advertises “We will pay you $4,000 for any used car, running or not, tow it in”, this is the same nonsense.  They are charging you more for the car you are buying. 

More nonsense.  No chance.   Jewelry will deprecate and will usually be worth substantially less than what you paid.  However, it will be worth something. If you buy a suit, a dress, furniture, a lawn mower, most electronics and so much more, these items will be worth little to nothing as the years go on.   The jewelry will be worth a certain percentage of what you paid.  How could jewelry appreciate?  A diamond you paid $5,000 for twenty years ago, with inflation and time, probably would cost you $15,000 today.  So, if you don’t get robbed and pay a fair price, in time you might do ok.  However, this does not apply to many items. Many items become dated and not too desirable and, therefore are worth only the scrap value of the precious metal.  If you bought gold twenty years ago you probably would do ok.  If you paid $3,000 for a nice suit, what is its worth years later?  Usually not much. If you paid $3,000 for a ring and can get $750 that would be acceptable.

Half nonsense.  They might get you a somewhat better deal but that’s it.  Why?  Two reasons:

A.  The mark up of jewelry is usually sky high so even a “deal” is not a deal. 

B. It is very hard to determine what to pay.  With cars, motorcycles, graded sports cards, many antiques, graded coins, some handbags, and other items, you can research previous sale prices.  You cannot easily do this with jewelry.  There are too many variables.  Diamonds are getting somewhat easier with sites like Blue Nile, Rare Carat, and others. 

Let’s say an item costs you $10,000.  The manufacturer sells it to the distributor for $4,000.  The distributor sells it to the wholesaler for $5,000.  The wholesaler gives terms to the store, maybe 90-120 days to pay for it at $7,000.  The store sells it to you for $11,000.    It’s liquid at about $3,000-$3,500. Sad.

Nonsense.  Sure, at one point a diamond had to come from the earth. However, most diamonds were sold to someone else before you purchased them.