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Monday, September 19, 2011

On Selling Your Jewelry (Again)

As I said yesterday, this entry is a rehash of a number of articles I have written about selling your jewelry.  Not a day goes by anymore that I don't get at least one person, and often as many as five or six, into my store trying to sell something.  This isn't just because the economy has been a little soft and some people need some money but also because the high gold prices have led to a larger than usual knowledge about how selling your scrap gold can generate money.  Now obviously I am a jeweler and my storefront clearly identifies me as such.  And today, many people think that as a jeweler, I must not only sell jewelry, but also buy it.  Unfortunately in my case, that simply isn't what I do. I have never had scrap, or jewelry, buying as a part of my business plan. I am a jewelry designer, and SELLER, and that is what I do.  This doesn't mean that there aren't a ton of "jewelers" who buy jewelry, just that I don't do it. 

The one thing I am happy to do for my customers is give them a scrap credit for old jewelry towards something new I am creating for them (or that is in the case).  I don't have a problem with this as it is simply another form of payment. And with today's somewhat high gold prices often a commercial chain purchased 10 years ago can lead to a credit well over what was originally paid for the piece at retail.  But I am not in the business of buying and scrapping gold, nor am I in the business of buying old jewelry and reselling it. 

So let's talk about this business of selling your jewelry once again. There are, as I see it, three separate issues to be dealt with in selling your jewelry.  The first is a straight gold (or platinum) issue.  Gold has been at all time highs recently and it is possible to actually sell some commercial jewelry for more than what was paid for it at retail. This is truly a first in terms of this business.  Unless you bought something years ago when gold was fixed at $35/ounce there was almost never a case where you could sell something you bought at retail to someone for scrap and get more out of it than you paid for it. The reason for this is because everyone in the chain has to make money on what they sell.  So a gold refiner has to make money on refining and producing gold for someone like a gold chain manufacturer who has to make money on their processes and machines when they sell the chain to a middle man who then sells it (at a profitable markup) to a retailer who than must resell it again at a profitable markup.  This routinely meant that if you tried to scrap a chain shortly after you bought it, you would get nowhere near the price you paid for it.  However, because of the extreme heights that gold has reached in price today, it has, in some cases reached the point where in fact you cannot only scrap your gold jewelry for what you paid for it but often for more than you paid for it.

The second issue has to do with selling the gemstones that may be in your jewelry, including diamonds, rubies, sapphires, etc.  Unfortunately a vast quantity of jewelry produced and sold in this country has absolute garbage in it in the way of gemstones.  The vast majority of those tiny diamonds and other stones in pieces are pretty much junk.  This is so much the case that many scrap buyers don't even bothering removing stones from pieces---they just send the jewelry into the refiner and the stones are burned out and usually destroyed.  It isn't even worth the time often to remove the stones, no matter try to resell them.  So if you have a piece of jewelry you are going to scrap and there are small stones in it, don't expect to get paid a penny for them.

 The other problem is that even if you do have high quality stones in them, many of the people buying gold for scrap these days have no clue of what they are looking at unless the stone has some significant size to it.  Now if you do have a more significant sized stone in the ring it may be possible to get an offer made on it.  Diamonds of better qualities, 1/2 ct. and up should generate some money (although prices have not risen on gemstones the way they have on gold so it is unlikely that you will get back more than you paid for the stone originally---or even close to it).  There are a few things to remember when trying to sell your gemstones. The first is that, unlike with metal at the moment, this is not a seller's market.  People are dumping jewelry right and left these days so the normal midrange to lower quality goods that most people own in this country are in abundant supply.  The buyers must be able to make enough on something they buy from you so that they can 1) sit on the goods until they are actually able to sell it and 2) make a profit on it when they do sell it.  Often the buyers are reselling the stones to wholesalers as they have a better chance of selling the goods.  If this is the case the person who buys it from you has to take a price far lower than the wholesale price because the dealers are paying less than wholesale on their normal goods (so that they can sell it to a retailer and everyone makes money on it).

I always believe that you maintain the most amount of gemstone value by holding onto it and putting it into a new piece.  Admittedly, if you are in need of money, this isn't a solution but if you are simply scrapping things you aren't wearing anymore and feel like taking advantage of the high gold prices, hang onto your stones. 

The third issue is a little trickier when it comes to getting rid of your jewelry. This involves pieces that might be worthy of bringing to an auction house like Skinner's in Boston.  Generally speaking I would only encourage this if you have true antique pieces in good shape, or significant gemstones.  What do I mean by significant gemstones?  These would be diamonds of exceptional size, color, clarity and cut (probably over 2 carats and VS or better clarity grades) or larger emeralds, rubies or sapphires of exceptional quality.  Despite what most of you think about your pieces, you probably don't own one of these stones but that isn't always the case.

 The baby boomer generation is also just starting to see their parents passing on family heirlooms.  This does sometimes mean that pieces passed down through generations are becoming available to people who see no immediate or long term use for them.  Unique pieces of note or with historical significance should be looked at by a qualified appraiser who could direct you to the appropriate place to sell them.  When I see customers with large quantities of jewelry they have just inherited come in, I usually try to divide the stuff up into three piles: junk, stuff to scrap with a gold buyer, and stuff to go to an auction house.  Most of the time there is very little to go to an auction house.  The advantage of using an auction house is varied.  For one thing, if pieces have true historic value they will be able to tell you.  Secondly, the buyers pay the premiums to the auction house.  Thirdly you can set minimum sale prices for stuff (although I would always advise you to listen to the auction house on this---they know what stuff goes for and what it will yield and they don't base it on the fact that it was your grandmother's piece and that you remember her wearing it when you were a child).  Fouthly you have the chance of generating a return far higher than scrap value in some cases. 

What I haven't discussed again here is the issue of actual yield on gold scrap.  But the following is a posting that will help you with that:

The pin pictured above is an old piece I made that I recently came into a picture of.  It is a sunstone with orange sapphires in 18k and 22k yellow gold. 

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