Jewelry.......A painful first fact

 Jewelry in general is not a good short term investment.  If you wander into a store and buy a nice diamond ring for your "I love you forever" HONEY, you had better stay together for a long time, because you will not see most of that money ever again.


Jewelers are in business.  That means that they buy the gold and stones at wholesale.  They pay jewelers to design and do the work to manufacture a piece.  And they must sell the pieces at a profit.  That means that the item is only intrinsically worth a fraction of the retail cost.  


Now, if your local jeweler buys a piece that is premanufactured from a  wholesaler, that wholesaler also makes a profit, taking raw materials and manufacturing the jewelry and then selling it at a profit to your local jeweler who, in turn, has to make a profit.

  

If your pearl necklace's pearls come from the Arabian Sea, there will be the purchase price, export duties, import duties and transportation costs including insurance before the manufacturer ever even sees them. Then they must be graded, sorted for size, drilled and set.


So, if you get dumped, and your "I love you forever" gives your ring back, you may take it to your jeweler to sell it back to him, and perhaps only get ten cents on the dollar. A pawn broker may give you almost nothing at all (unless the stone is significant) for the diamond, and only give you a few bucks a gram for the gold including the small diamonds set in it. (A gram is about the weight of a paper clip.)  "Single cut" diamonds may only be worth five or ten dollars anyway.


If you leave a piece for the jeweler to sell on consignment, they can just as easily buy a new piece from a wholesaler, they do not really need your piece.  So they may only offer you 30 cents on the dollar to display it in their case so they can mark it up to make a profit.  You get only the 30 cents because even if they do sell it, people will not spend as much on an old or used piece as a new one...the jeweler has to sell at a discount as well.


To be fair to the jeweler, if you purchase a pair of shoes from a retailer, they are not going to buy them back from you at the same price you paid for them.  


One trick is to buy at auction to get an immediate profit by paying much less than retail.  


Buy estate jewelry from a retailer when available at a discount.  


Buy great named pieces from a big company that is selling to a collector's market rather than  normal retail.  


Go to estate sales, tag sales and auctions.  


Look for sales, especially going out of business sales.


On the other hand, you should buy something from a jewelry store because you love it, it is beautiful and you cannot live without it.


Assuming that costs continue to rise, your grandchildren may make a profit.  But the idea is to forget the possibility of profit entirely.(Though I can now do pretty well on pieces I bought in the 1970s.)

If you buy a diamond at auction or from an estate sale or antique shop owned by a dummy...know what you are looking at, as far as quality is concerned, and have non antique stones set in a modern setting to avoid simply outdated, ugly and unfashionable designs. You may then turn a profit.  Truly good estate jewelry is valuable and you should only alter it if is is out of date and from a period that did not do great design.


This blog is meant to educate you about what you are looking at.  Very important is to understand that you should not be hesitant to buy something from a good jeweler if you love it and plan to keep it.  It is not as if you can hammer one like it together in the basement some evening.(And your honey may not like wearing something that is not new anyway.)


If the piece you are buying was owned by a famous person or nobility, then you probably can't lose even if it is overpriced!  Plus, your honey might like the idea of wearing a piece of Elizabeth Taylor's jewelry.  Make sure there is proper documentation for this sort of thing. Have the seller provide a certificate or make sure that it is stated on your reciept where it came from.


Many great jewelers have estate pieces available in their stock.


Comments

Post a Comment

Popular posts from this blog

the third 'C' or Clarity

 CLARITY I think this is pretty easy to figure out...If there is nothing at all inside the stone but diamond, then it is clear and flawless. When an appraiser looks at a stone, he does it with ten power magnification.  If he looks at the stone under an eye loop or a microscope and sees nothing at all in the entire stone, then he may judge the stone to be flawless or he may say Internally Flawless.  This includes things like abrasions, scratches and chips. There are lots of opportunities to hide imperfections in the stone.  When you look at one, the center is pretty easy to see right through the stone to the bottom.  But as you move to the sides, the complex play of light and the many facets of the cut stone can mask what is inside, basically hiding whatever is there with light and reflections. The jewelry piece may have prongs or a band of gold holding the stone into the setting.  These may be strategically placed to cover a flaw that is located near the ed...
Read more

Marquis cut stones

 Marquis (Marquise) shaped diamonds. This shape is sometimes referred to as a navette,(usually in colored stones) from the French for little boat.  They are long ovals or ellipses that come to a point rather than a rounded end. To my eye they have less life than some other shaped stones and can, again, form dark shapes inside.  They are also cut from more awkward pieces of rough.  They are very useful, again, in complex jewelry design.  I have never seen a Marquis shaped diamond ring or pendant that I liked.  The long narrow shape exposes the sides of the stone to possible damage.  Often the points of the stone can be easily broken as well.  The points are often capped with a broad prong that covers the point.  When the stone is struck, the stone can often be shifted sideways(diagonally) in its mount and the stone can come loose easily or break off at the points. This is not a stone for an active lifestyle. The long, pointed shape can also ha...
Read more

The fourth 'C' or Carat weight

 CARAT WEIGHT The last of the "C"s is carat weight.    This is not the same as the Karat that indicates the percentage of gold in a piece of jewelry. Carat comes from the Carob Bean.  The carob has round seeds, and they are all fairly uniform in size.  Lacking anything else to use as a standard of measure in early times, they decided that the carob beans were regular enough to use as a standard of measure. One carob bean was a carat. My question is what happens as the bean dries out and gets lighter? A carat is divided into 100 points.  So, one and a half carats was 1.5c. or 150 points and a quarter carat is .25ct or 25 points. Diamonds become rarer in larger sizes.  As they become rarer, they become more expensive, but not evenly...they jump up in price as they reach certain sizes.  This is not absolute, but .25 or 25 points is a size that experiences a sudden change.  .5 is another jump in price....75 as well.  One carat is a fairly la...
Read more