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Wednesday, May 23, 2012

More on Selling Your Jewelry

Despite the improving economy I can't seem to get through a day without more inquiries about selling off jewelry. Mind you, a good deal of these discussions are happening now because the baby boomer group has reached the point where their parents are dying or simply beginning to pass on their estates so it's not all about the economy. In many cases estates are being passed down and the jewelry is simply too dated (read: ugly) to be worn today, too worn to be worn today (I like that phrasing) or doesn't fit into the recipients life style (remember I'm in Cambridge where ostentatious displays of wealth are not always looked upon in a kindly manner). So I'm going to revisit this topic in today's posting with a review of the information I've given before on this and some new information as well.

What is it that you have?

The first issue (especially in the case of inheriting jewelry) is figuring out what you have and, if you want to get rid of it, the best way to do so. In many cases, basically what you have in your hands is a pile of gold that really can only be disposed of by scrapping it. Because of how much stuff is being sold off today, small stones (diamonds included) are rarely going to add anything at all to what you are going to be paid unless they are exceptional. There are more loose, low quality, small gems flooding the marketplace today then ever before, so much so that to some extent jewelers just send the whole pieces they buy, stones included, into the refiners to be burned out (and usually ruined) without even removing the stones as it isn't worth their time to bother. So unless you know your parents were collectors of fine goods, or there was some significant wealth in the family history, or if you're selling something you bought and you know it was a very high quality piece, I generally just recommend that you scrap the metal you have. If you are looking for money I always recommend you take it to two or three jewelers and see what they offer and then take the best offer. Daniel R. Spirer Jewelers doesn't buy gold outright but I will take it in trade towards work being done or pieces bought out of my case and because gold has been so high it is a good time to do something like this. Gold, however, has been on a gradual downwards swing lately so I would say if you're thinking about doing something like this now is the time to do it.

When you have something good what do you do with it?

So now let's say that you actually have a really nice, larger diamond and you want to know what to do with it. In my opinion the most amount of value is always retained in these by keeping and using the stone in your own pieces. This is because when you go to sell a piece you are basically selling it to someone for below wholesale as they are going to need to resell it to a customer and they aren't going to pay what they would pay their regular supplier for it. (There is more information on this in earlier posts---check my blog directory.) However for some people it isn't an option to keep the stone---either they need the money from it, or an estate is being broken up and they need money to be able to do that (cutting diamonds into small pieces is not generally recommended as a way to break up the inheritance (-; ), or it simply doesn't fit into their lifestyle and they would rather have the money to invest (gemstones should NOT be considered an investment) or use.

In these cases you have a couple of options available to you. One is to simply do the same thing as I recommend with gold and show the piece(s) to a few jewelers and see what they offer. If you don't like what they offer you don't have to take it. The second option is to try to sell it on Ebay or a similar venue. I do NOT recommend you sell anything privately if it involves you meeting with people you do not know. This is an extremely dangerous idea. The third option is to see if a jeweler will sell it for you. Daniel R. Spirer Jewelers will do this for customers assuming that the piece has a high enough value. I work on a commission basis when I do this so if you come to me with a stone worth a couple of hundred dollars I won't help you but if you have something of significant value that it will be profitable for me to spend some time on trying to sell for you I am happy to try to help you. The fourth option is to give it to an auction house to sell.

Auction Houses

Auction houses can be a good option for you if you have a group of pieces that are true antiques, or that are by known designers or that have a number of significant gemstones in them. They may, or may not, be a good option for a single large stone. If you have something truly exceptional, either a very large diamond, or a very high quality, very large,diamond (where you may be looking in the over $50,000 range) it might be worthwhile to sell through an auction house. However the diamond market everywhere is fairly standard, and runs on relatively small margins, so you have to weigh the costs involved in selling through auction. An auction house charges a premium on the sale to the buyer and a commission on the sale to the seller. (I confess to having not realized this until just recently. I was always under the impression that only the buyer paid the premium but as it turns out they will take something from both ends.) So the question becomes a little more complex on a single stone. Many of the buyers are in the trade and looking to resell the stones (and are often looking for deals). Additionally everything they buy carries a premium of anywhere from 15-20% so they have to factor that into what they will pay. Then you will also pay a commission which will reduce your yield. So if it is a piece in the hundreds of thousands it might be a good bet as those types of pieces are hard to sell outside of the auction world but on lower value goods it may be a wash in terms of which approach would yield the most. With true antiques however I believe an auction house is always the way to go. You can usually set minimums that the pieces can sell for with an auction house so you aren't obligated to sell in this case either if they aren't met. However you should expect the auction house to guide you as to what is a reasonable minimum bid for a piece and you should listen to their advice. The better ones all have far more experience in this then you do. I had a customer who recently sold a piece through auction. It was a very unusual link bracelet with pale blue, very flat but very large sapphires in each link. The auction house thought she would get about $5000 for it but it ended up going for $14,000. She netted about $12,000. This piece however (I saw it and had recommended she take it to auction) was a very unusual piece. If the sapphires had been removed and someone attempted to sell them off as they were no one would have paid much of anything for them because of the color and the large number of inclusions in them. But as an antique, and somewhat unique piece as a whole, it had significantly more value than it might have otherwise.

As with most things, there are no easy answers when it comes to this, and what I have said here is only a general guide for what you might be able to do. It does all come down to what you have and whether it truly has enough value. A somewhat generic, mid quality range 1 ct. diamond will yield something but I would tend to encourage you to just show something like that to a couple of jewelers. A 2 ct. mid to high quality range diamond I would encourage you to check with jewelers or work with someone like me who works on commission. A 5 ct. high quality diamond should most likely go to auction. Hope this helps a bit!

The 22k gold ring at the top is my wife's and has a 1.77 ct. ideal cut diamond in it.

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