What Is My Jewelry Worth?

Is my jewelry really worth anything?

What a good question!  Almost everyday we have a customers come into our showroom wanting to sell their jewelry.  In this economy, the second-hand jewelry and gold buying markets are thriving.  Signs offering cash for gold are all over our cities.  Though this plethora of advertising may seem tacky, it should actually make you feel comfortable about your jewelry.  Why?  Because you know that you can take a piece of precious metal jewelry and sell it in any city across the country and get at least some money for it.  Precious metals, diamonds, and gemstones are universal currency, and it's been that may for thousands of years.  If you take nothing take nothing else from this blog, please remember that your jewelry has value!

How much is my jewelry worth?

I already told you that your jewelry is worth money.  How much money, however, depends on many factors.  Let's think back to journalism class: who, what, where, when, why, and how.  Remember those key terms?  Well they are also responsible for determining the value of your jewelry.  Let's take a further look:

  • Who - To whom are you selling your jewelry?  Are you walking into a pawn shop in a seedy neighborhood or are you approaching the fine folks at Christie's?  In the retail world, jewelry has essentially two different values: wholesale and retail.  When you buy from a jewelry store, you are paying the retail price for the jewelry.  Regardless of how "discounted" the piece, you are almost surely paying more than the jeweler's cost.  That cost is the jewelry item's wholesale value: the value the jeweler paid a jewelry manufacturer or gemstone dealer for the item.  When you go to a jewelry store, pawn shop, or other immediate-payout route, you become a wholesaler selling your jewelry at wholesale value.  The jeweler has to make a profit on the item by either reselling it or by disassembling it and selling its parts.  If the jeweler were to pay you the retail value (i.e. the value indicated on an appraisal), he would most likely be losing money when he goes to sell the piece.  So when a jeweler says your jewelry is only worth X dollars, and X is way less than what you paid, please do not be insulted.  It's capitalism in action.
  • What - What piece of jewelry are you selling?   If you walk into a jewelry store with a 50-carat D-Flawless diamond, you are going to get a heck of a lot of money for that stone.  However, when you bring in a piece of jewelry that you bought at a discount jeweler, most likely you will receive a very low amount of money (usually equal to market value of the precious metal(s) + the market value of any gemstones in it).  The market value of that D-Flawless diamond is very, very high.  The market value of a mass-produced piece of jewelry is probably very, very low.  Factors that increase the value of what you are selling are brand, provenance (a historical, verifiable story behind the piece of jewelry; usually the piece goes to auction), fashion appeal, craftsmanship, and many others.
  • Where - Where are you selling your jewelry?  This can refer both to both to whom you are selling and where geographically you are selling.  The market for jewelry in a major city is going to be stronger than in a small town.  Selling yellow gold in Southern California is like selling a typewriter to a computer engineer: the buyer assigns little value to the item because he has no use for it.
  • When - When you are you selling your jewelry?  The value paid for your jewelry will most likely be directly derived from the current market prices for the precious metals and gemstones.  If the daily gold price is at an all-time high, that's a great time to sell.  An interesting thing to note is that when the US dollar is devalued, gold value usually goes up.
  • Why - Why are you selling your jewelry?  This actually plays a large part in how much you will receive for your jewelry.  If you are strapped for cash and wander into a pawn shop, you will most likely smell of desperation, and the value will go down.  It's just the nature of the beast.
  • How - How are you selling your jewelry?  There are countless ways to sell a piece of jewelry.  There's the internet, jewelry stores, pawn shops, auctions, friends and family, random people you run into, and many others.  If you can sell to another individual like yourself, you will be able to offer and receive a value closer to the retail price of your piece of jewelry.  At auction, a piece of jewelry with provenance or extreme rarity can command record-setting prices.  However, there how you sell your jewelry brings other factors into consideration like how long it will take for the piece to sell.  A pawn shop or jewelry store will pay you right on the spot, albeit at a lower price.  If you put your piece on consignment or sell to another individual, it may take a while to finally find a buyer.  Time is money, and in jewelry selling, more time on your end usually means more money in your pocket.

So what's with the value on my appraisal?

Values stated on jewelry appraisals are our number one objection to the price we offer to pay for a piece of jewelry.  Legally, there are many different types of appraisals.  However, most consumers are only ever exposed to appraisals for the insurance replacement value.  The insurance replacement value is essentially the amount the insurance company would need to pay out in order to replace the article of jewelry with another piece of comparable quality at retail value and excluding sales tax (Please note that this is not a legal definition and is not intended to serve as reference in legal matters).  More often than not, your jewelry will appraise for more than you paid for it.  This is because the appraiser is factoring a broader, easily attainable retail value.  Tip: It is recommended that you have your jewelry appraisals updated at least every two years to reflect changes in market values.  In selling your jewelry, you will more often than not  receive a value of less than the appraised value.  Refer to the above factors for why this is true.

My personal words of advice: Please do not be insulted by businesspeople and jewelry professionals who offer you a low value for your jewelry.  Many of them will try to play coy so that you cannot judge how much they actually want the piece of jewelry.  In many cases, the person really wants to buy the piece from you, but if they tell you that, you will expect a higher price.  It's just business.

Originally posted by me to LibertyDiamonds.com on 5/7/2010.