Back to Ganoksin | FAQ | Contact

Formula for jewelry appraisals?

Is there a formula for jewelry appraisals? I recently had someone get
an appraisal on a ring I made. the appraisal seemed low. It looked
like they took the wholesale cost of materials and just doubled it.
Is this normal? Is there a formula?


The formula is a closely guarded secret by members of the NAJA. It’s
typically 1.75-2.00 times wholesale cost of the item. Not the
materials, the item. If you fabricated something, though, it would
fall under custom work, not run of the mill standard formula kind of
stuff. The appraisal should say that. Case in point: Bezel set 1/2
carat total weight diamond studs F/VVS. $3150 value. Sounds a little
(or a lot) high, but that’s what Tiffany gets for Perretti studs. So
the appraisal would indicate that they were designer studs from
Tiffany’s. Most of us can’t get that kind of money for 1/2 carat
total weight studs, but certainly there’s a happy medium between
twice the cost of materials and what some designers get.

Stanley Bright
A&M Jewelers

Is there a formula for jewelry appraisals?

No there isn’t. A true appraisal looks at a variety of factors in the
marketplace as a whole. If your piece was a piece unique to you, the
appraiser should have actually contacted you about your pricing. If
it was a generic looking piece then they would have to base it on
what is available in the general marketplace. Of course there is
always some question about who is doing the appraisal as well, and
whether they have enough experience and training to be doing proper

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140

When I get an appraisal everything is included. The appraiser does
not even see how much anything cost. He has done appraisals on stones
and diamond rings for me. He comes back to us with three prices, the
first one is if we are going to wholesale, the second is what a small
shop would charge, the third is the insurance price.

Does anyone know where I can get high quality diamond-replacements
for demo rings?


Hi Marya,

There are some factors of this appraisal that I don’t know, so I can
only comment in general. There are different types of appraisals
that will result in different estimated values. Was this appraisal
to be used for obtaining insurance on the ring? Fair Market Value
will differ from an Insurance Replacement Value. Was the ring new,
made recently or was it made sometime ago? Is this a custom made
item, trademarked designer item or did you assemble the ring with
commercially available components? Is it signed? What information
did your client provide to the appraiser about the purchase of the
ring? All factors I don’t know.

The Cost Approach and The Market Data Approach are the valuation
approaches most often used to estimate value of jewelry.The cost
approach breaks the item down into its components (metal, method of
manufacture, labor, setting fees, etc.), determining
their wholesale cost as if the item were to be re-made currently.
Then an appropriate retail mark-up is factored in to obtain the
current retail replacement value prevalent in the appraiser’s
locale. Wholesale costs and retail mark-ups can vary from region to
region. So the appraiser must research the market where like items
are sold and the mark ups applied in his or her geographical area,
not just one store.

The market data approach involves finding comparable items. When
used for insurance the item is compared to a new duplicate item from
the same manufacturer and designer or with a comparable item from a
secondary jewelry market. The appraiser must research the most
common and appropriate market in the region for similar objects to
find sales data that confirms and qualifies the final value

If your ring was signed or the client identified you as the
manufacturer or designer, I think the appraiser should have begun
his research with you. Asking you for a wholesale price of a
duplicate or comparable item and then applying an appropriate
regional mark up. Are you hard to find or not well known as a
designer yet? Do you have similar jewelry available in stores? If
the appraiser could not make contact with you or find other
retailers selling your work, he or she should have used an
equivalent appropriate market. Improper research can result in an
incorrect estimate of value. In the case of insurance replacement,
this could result in the item being valued too low and not
adequately insured, or valued too high and the client paying too
much in premiums. Again, there is much that I do not know about this
particular situation and cannot judge the quality or accuracy or
your client’s appraisal.

Anyway, I hope some if this info is useful. There is not really a
formula so to speak. But there are specific valuation approaches,
different types of values and markets, and retail mark-ups that can
vary from region to region. The appraiser must determine the most
appropriate of these to use for the item being appraised.

Carrie Nunes