Hello to everyone.
A customer of mine is purchasing 2 wedding bands from me, one with
princess cuts and the other plain. He would like to apply a 14kt.
ring with diamonds towards his purchase.
Let’s just say it weighs 5 grams and has 7x.02 diamonds channel set
into it.
What is the formula for figuring out the scrap value of something.
Thank you very much,
Laurie
Currently, I am paying $9.00 a dwt(pennyweight) for scrap gold. One
dwt = 1.552 gram.
For the diamonds, first I consider what those stones will cost me
from a wholesaler, divide that number in half, and then decide if the
stones will be difficult or easy to remove from the mounting, and
make an appropriate deduction for the removal time I spend.
Ed in Kokomo
Let's just say it weighs 5 grams and has 7x.02 diamonds channel set into it. What is the formula for figuring out the scrap value of something.
First of all figure out what you are going to do with the scrap
gold. You need about 3 ounces to refine, so you have to sit on that
gold until you collect that much.
The diamonds are worth nothing, the cost of labor to remove them
negates them having any value. If you buy it, and can successfully
remove the diamonds, use them and that increases you profit. For
something like this, pawn shops pay scrap value, which you can
evaluate by dividing the spot price of an ounce of gold by 24,
multiply by 14 divide by 31.1 ($576 divided by 24 karats $24 x 14kt
$336 divided by 13.1 grams $10.80 per gram. I would pay out about $8
or $9 dollars per gram or about $63. Does not seem like much but you
cannot pay for the material mark ups, labor or profit.
Present it as " This is how much I can give you for this, or you can
save this and have something made out of it in the future, it is
worth more this way."
Some people are glad to get rid of the item, some are disappointed
that it worth so little.
Do not do a favor for your customer at your expense.
Richard Hart
Years ago, when I worked in retail, we would give the customer 75%
of scrap value as store credit. If they had originally purchased the
diamonds from us we would give them back full value if they were
buying up in price as a replacement. As for diamonds we would often
try and get the customer to keep them and put them into another piece
of custom work. If this wasn’t possible, we would give them about 65%
of wholesale but not explain how we came up with the price. It ‘would
be due to us having to carry diamonds in inventory that we had no
real immediate use for’. Try selling him a pair of little stuller
remounts or something. Add ons are a must in retail…
Good luck, Dennis
Laurie,
While there are formulas you can use to determine fairly accurately
the actual value of the gold itself there are so many variables that
it’s not safe to just use that. The variables are what the price of
gold is going to be on the day your refiner actually pays you for it
and how much loss is incurred in the refining process. Additionally
how much time are you spending dealing with taking in the scrap,
removing the diamonds, etc. So you don’t want to pay full price for
the gold scrap, you actually want to pay significantly less.
Additionally if you are giving something towards the diamonds, that
should be significantly below your wholesale cost as you could
always just purchase them from your regular dealer at normal
wholesale, plus you have to think about the cost of stocking the
stones until you can actually sell them. I’m sure many of the people
on the list will be happy to give you some kind of formula but I can
tell you that currently we pay about $8/dwt for any gold scrap. Since
I only sell branded diamonds the only ones I take in trade are for
repair work and I have never paid more than $200/ct for anything like
that.
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
617-234-4392
@Daniel_R_Spirer