11212017Tue
Last updateWed, 15 Nov 2017 6am

Retailer Roundtable: Do you buy from the public? What is your procedure? What are the challenges?

RR Furman“For precious metals we either buy outright, but a lot of times people opt for a trade in, which gives them an extra 10 percent more for the item(s) sold. Typically, we sort pieces by precious metal types and karatage, and then weigh the item. We then plug in the pennyweight of each item(s) into a formula using the day’s spot prices. If customers want gemstones that we aren’t interested in buying, we’ll remove those as well. For diamonds we typically buy at weights of half-carat and larger, but will purchase smaller sizes in complete jewelry pieces that we’re buying. We always have two staff members examine a diamond, especially with larger goods. We want to make sure that both staff members are close on clarity and color grades. For jewelry, watches and diamonds - engagement rings essentially - we allow customers to sell their goods at an outright price or a consignment price. The outright price is the lower price. When the item sells, we cut them a check 30 days after the purchase, which coincides with our return policy. We also buy watches from the public. Many customers will trade in one or multiple watches to purchase a new one. I usually ask customers for one to two days to have our on-site watch expert look at the watch while I check current market prices. The offer I give customers on watches is minus what I estimate it will cost to bring it up to saleable level. Buying from the public has been very lucrative for us. These items sell because people like good jewelry and watches for a good price. And, pre-owned and estate display cases constantly change. And, customers always like to see what’s new in the store.” 

Andrew Furman
watch and diamond buyer
Continental Diamond
Minneapolis, MN

  

RR Necker“We’ve been buying from the public since the 1950s, so it’s very much a part of the range of customer services we offer. Given how long we’ve been in business, and the size of our market, if we do buy from a customer there’s a good chance it’s our jewelry. So, we have to carefully ride that thin line between what is good for the customer and what’s good for the store. If a customer wants to do a trade in, we typically give them 50 percent above the scrap prices after weighing the precious metal and evaluating the gemstones. For example, if we’re offering a customer $200 for scrap for their piece of old jewelry, if they purchase a new piece from us we’ll give them a $300 store credit. We also do consignment work with customers through our estate case. We’ll evaluate a piece to determine if we can sell it and costs to repair it. We typically bring it up to saleable level and split the sale 50/50 with the customer. Buying precious metals is a simple formula using the day’s spot prices. We’ve also got a formula we use for buying diamonds, from melee and quarter-carat diamonds on up to a full-carat. This has worked well for us over the years, which ends up averaging about 30 to 50 percent below wholesale. We don’t use price guides or sheets much. The main thing with buying from the public is buying in such a way as to not upset the customer. Again, it’s that fine line that’s very tough to walk with the customer when buying from the public.”

David Necker, president
Necker’s Jewelers
DeWitt and Davenport, IA

 

RR Alexander“We’ve been buying from the public for many years. With precious metals, we buy mainly gold and from time to time platinum. We buy for scrap, so like most jewelers we have an in-house formula for arriving at a scrap buy price. With silver, people usually do not sell it for scrap and end up keeping the pieces as the return isn’t that much. With diamonds we don’t look at anything under 3/4-carat. Once that hurdle is cleared we then tell the customers that we can’t give them anywhere near the appraisal value of the diamond because they’re selling it, not replacing a lost or stolen diamond. Once that’s explained, we rely on our staff GG to examine the diamond. We used to have a machine to test the diamond, but it wasn’t reading the diamond correctly, so we returned it. When it comes to arriving at a diamond buy price for the customer, we look on BlueNile.com for a retail perspective on prices for a diamond of certain specifications. Everyone’s going on line so we have to be competitive with their prices. And, we look at Rapaport for a trade perspective. Concerning buying jewelry, we give a fair price but will give customers as much as 10, 15, even 20 percent more if they trade in their old jewelry and buy something at a higher dollar value. This works well for us. And, like most jewelers, we’re constantly working on staying current on detection methods for the lab-grown diamonds. Everyone needs to stay alert on those.”

Anna Alexander, co-manager
Hobbs Jewelers
Athens, AL

 

RR Hudzikk“We buy minimally. It is a service we don’t advertise or promote, but we will buy from our regular customers. We decided to buy from the public around 2009 when gold prices were fluctuating and everyone was selling and buying gold. The dodgy businesses that were buying precious metals were ripping many of our customers off. When the public buying was implemented, we decided we’d take all precious metals. We never, ever buy colored stones - no matter what. And, we don’t buy pieces of jewelry. We will, however, put a customer’s jewelry on consignment. There’s usually no time limit set on consignment pieces. We select carefully and only put items in the consignments case we know will sell quickly, perhaps a month or more. For diamonds, we won’t buy anything under one-third of a carat. We only buy better quality goods. Our staff carefully examines the diamonds we consider buying. And, my decision to buy or not buy is mostly determined on what we have in inventory at the time. Customers are also told up front that realistically we can’t give them anywhere near what they paid for the diamond when they purchased it or the retail replacement value stated on an appraisal. Dealing with expectations starts every diamond buy conversation.”

Joanna Hudzik, owner
Haywood’s Jewelers
Smith Mountain Lake, VA    

 

RR Padgett

“Back in 2009 to 2011 - like many jewelers across the country - we were active in buying given the price of gold. These days we buy very little. The mall across the street, which has the usual national jewelry store chain names, has people coming in to our store looking to sell their jewelry with the hopes of getting the same amount back that they paid for it. If I were to buy a diamond from the public, it would have to be a 1-carat diamond or larger solitaire that’s eye clean and colorless or near colorless. Rapaport would be used to arrive at a fair price as they update prices weekly. Another factor for buying so infrequently is we’re based in a military town. And, we’re a small town of 30,000 [civilian population] people and 40,000 service men and women. For the most part, it’s a young population in this town. People come and go at a young age here and they just don’t own fine jewelry at these early adult stages of their lives. If I do see something I like and someone wants to sell, I’ll most likely consider making them an offer. But I just don’t see a lot of higher end gemstones and jewelry in this market.”

Brad Padgett, owner
Bradley’s Jewelers
Jacksonville, NC

 


Columnist