But the sug. retail was 4,905 and i am wondering how appraisals
work because i do not want to sell a piece of jewelry and have
customers thinking that there getting ripped off when it appraises
for less. Any will be useful.
Nicholas, there are many different kinds of appraisals - divorce,
fair market value (FMV), average retail value (ARV), etc. On a new
piece of jewelry where the customer needs an appraisal for insurance
purposes, they will be needing an average retail value (ARV) for
insurance replacement which is the cost to replace the item. If the
suggested retail price you mentioned in your post is an actual
published SRP from the manufacturer, you should supply your
customers with proof of that SRP and advise them to bring that proof
to the appraiser, who must then use it as the actual replacement
If, on the other hand, the ring in question is a one-off, custom
designed, hand-assembled or otherwise has no significant provenance,
it must be appraised on the basis of its’ constituent parts. Stones
must be measured for weight estimation and graded for such
characteristics as color, clarity, proportions, fluorescence, match,
etc. The item is weighed and valued at market price of the metal of
which it is made, and value is added for the design and execution of
the piece. All of this is done at wholesale, then doubled for an ARV
appraisal, or possibly halved for a divorce appraisal. Divorce
appraisals (and others) are halved because divorce attorneys often
return with their clients’ appraised goods to liquidate (read sell)
them, and jewelers are only interested in buying estate pieces at
one-half wholesale or less, if possible.
Here’s an example: If I saw (or stamp) out a heart-shaped pendant
from sterling silver and engrave (or stamp) my name on it, the cost
of materials along with my time and effort would drive the value up
to somewhere around…oh, say $10.00 US Now, take the same basic,
stamped heart-shaped pendant in an estate that has a Tiffany & Co.
stamp and, voila! It’s suddenly worth $150 or more. Why? Because
that’s what Tiffany & Co. gets for them in their retail stores.
Experienced appraisers are familiar with high-end designers and have
references we use to identify their hallmarks, but can only value
unidentified typical pieces at their constituent values.
Now, here’s where problems can happen for the retailer. Just because
a manufacturer’s published retail price is at a certain level, that
doesn’t mean the piece is worth that price. Many manufacturers’
lines use low clarity stones with poor color and, without
accompanying proof that the piece retails for a certain price, an
appraiser can only judge it based on the sum of its’ parts.
A good practice for retailers is to establish a relationship with an
appraiser in their area. Most will provide appraisals on new pieces
to retailers in the trade for far less than a walk-in customer,
simply because the suggested retail price is already established and
there isn’t much more work to do other than photographing the piece,
checking to see if the description matches and typing & printing the
report. Also because the repeat business is worth a volume discount,
so to speak.
Nicholas, you have Broward County’s only Master Gemologist (who
bears the same last name as you) right there in Ft. Lauderdale. I
don’t plug my store or my personal web site on Orchid because I feel
like that would be taking advantage, but this time I do want to
offer our appraisal capabilities. Contact me off-list if you’d like
to establish a business relationship with us.
James S. Duncan, G.G.
James in SoFl