[Jewelry making - Article 01276] - Re: [Orchid] How Appraisals Work

[Daniel Spirer]

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    Appraising jewelry is almost as much of an artform as making jewelry
    but there are definite ethical and scientific principles that have
    to be applied. Generally speaking the place where most jewelers go
    wrong is that they assume that since they are selling a piece for say
    $2000 then that should be the appraised price. In reality an
    appraiser has to look at what a similar piece is selling for in the
    entire marketplace. While the jeweler may be selling something for
    $2000, it may in fact be available down the street for $1700 and on
    line for $1200. All other things being equal, then what is the actual
    value? It generally works out to being an average of these price
    ranges, or something closer to the lowest value, as, if the piece
    were stolen the next day the customer could go and replace it for the
    lower price by going to the least expensive source. This of course
    presumes that it is not a custom design, one off, or branded item in
    which case the price paid is pretty much the appraised price as it
    could only be purchased again from the original source. Many jewelers
    used to think that by overvaluing a piece on an "appraisal" the
    customer would a) feel better about the purchase and b) get more from
    the insurance company if something happened. In fact not only is this
    action unethical but it also only ends up costing the customer more
    money for the insurance when most of the time the insurance company
    isn't going to pay anywhere near retail for the replacement piece
    (in other words the insurance company makes a lot of money off the
    deal). As for a suggested retail price, that in fact is just what it
    says: a "suggested" price. It can in fact have no basis in reality
    as some people need to get a 10% markup, others need 100% and some
    need 300%. It usually simply is a way for a manufacturer to price
    their work without showing the actual wholesale price (especially
    those who encourage jewelers to use their catalogs to sell stuff
    from). 

    Properly explaining principles of appraising takes far more space
    and time than Orchid would permit so if you really want to
    understand it better you should look into any number of the courses
    available from various institutions, including (but not limited to)
    the GIA and the JVC. 

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
daniel AT spirerjewelers.com
www.spirerjewelers.com

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