Rapaport Magazine
In-Depth

Consumer Politics

There are many reasons to buy — or not to buy — a piece of jewelry that a client brings in, but there is only one way to approach the deal: with sensitivity.

By Phyllis Schiller
RAPAPORT... It is not unusual for a client to come into a store wanting to sell a piece of jewelry, and while many of the pieces of estate jewelry that come over the counter may not be sterling examples of period pieces, the value to the person offering them for sale can far outweigh pricing issues. The jewelry represents “a moment in their lives, a moment in their family, a moment in their history,” points out Kimberley Thompson, estate buyer, J.B. Hudson Jewelers, Minneapolis, Minnesota. “The goal is to gently deal with that without insulting them, to make an offer consistent with what you think the piece is worth but with sensitivity so they don’t leave upset.” There is an emotional factor that enters into the mix, acknowledges Janet Levy, principal, J. & S.S. DeYoung, Inc., New York City. “I just urge people to be respectful of the relationship behind the piece. It might be something that their mother wore every day.”

“When someone comes into my store,” says Jim Rosenheim, chief executive officer (CEO), Tiny Jewel Box,Washington, D.C., “whether they are buying or selling, I treat them exactly the same way. I treat them with total respect.  I understand that they’re uncomfortable, just like people who come in can be uncomfortable buying jewelry. You sit down and quietly have a conversation with them and try to put them at ease and make them comfortable. Be willing to answer any questions whatsoever that they might ask you about the piece and what it is.”

“You’re really just trying to find out what their objective is, what it is the customer wants,” says Eric Bitz, vice president, David & Company, a retailer/Swan & Company, a wholesaler in Chestnut Hill, Massachusetts. “Some people might need cash right away.  And if it’s something we feel we can use in our stock and we feel confident in it, we would make an offer right away. Or another customer may have inherited several pieces in an estate and not be in a rush to liquidate them. For situations such as this, we might consider offering the customer a trade option or perhaps a consignment option, which would allow them to get more value out of their item. Ultimately the process is very personalized to each customer and what they’re selling, how marketable it is, how much they are expecting for their items and how quickly they are expecting it. ”

Educating Customers
“If I’m offering a lower price,” says Thompson, “I’ll tell them exactly why that is. Usually, it’s because I have existing pieces in my inventory or the piece is a little more out there and I’d have to sit on it for a longer period of time, or it’s something that’s very bread-and-butter and probably the low end of my spectrum. I do tell them that I take a look at what the maket is doing, I take a look at what things are selling for at auction, what I could buy it for and then I make my offer based on that.”

What you don’t what to do, points out Stuart Singer, Stephen Singer, Inc., estate jewelry dealer in New York City, “is offer a price that you think may offend your customer. Engage your client in some dialogue, asking them how long they have had the piece, why they want to sell it and if they have any idea as to the value of the piece. Then present your offer price with confidence — don’t ever be embarrassed by any offer as long as it is a fair one.”  Another factor to keep in mind, Rosenheim says, is if you were to purchase this piece from a dealer and it doesn’t sell in a year or two, you would be able to trade it back for something else in his inventory. But you can’t do that with a consumer. “So I’ll pay less than wholesale value because I don’t have the same ability to get rid of it if I don’t sell it.”

“One of the things that is a battle for our industry is overdone appraisals,” points out Levy. “Say there’s a little bow pin with a carat and a half of diamonds in it. If it were being sold, it would be sold for $800, but if it was going to be retailed, it would go for $2,000 to $2,500, and it should be insured at that level. But then the person comes in with this little bow pin and it’s been insured for $4,500 and they get offered $800 — it’s too much of a shock.”

You have to put whatever they’re showing you into the context of what the piece is and explain it to them, says Rosenheim. “Tell them it’s 1920s vintage, or it’s platinum, or it was made in France. Show them the hallmark. Explain that it needs some work, the stone is not real or the stone is very nice quality.” He also explains to them that the price is based on the wholesale value and not the retail value,“and that there’s a significant difference between wholesale and retail. And that difference is paying for the 40 people who work for me and for my advertising and my insurance and overhead costs.”

According to Benjamin Macklowe, of the Macklowe Gallery, New York City, “In buying from the public, just like buying from a dealer, there’s always give and take and a discussion. It’s harder with the public because often these are family heirlooms and so they are ascribed a greater value because of sentimentality than they may have based on their actual commercial value.  And also, very often members of the public have bought things at retail price from somebody else, so you have to bring them down to the reality that in the estate market, they’re not going to get anywhere near what they paid for it unless they were exceptionally fortunate and bought something that was undervalued and now it’s much more popular.”

Opportunities
If you handle the transaction well, points out Rosenheim, and treat people with the same courtesy buying from them as selling to them, they will have a good experience, which will encourage them to recommend you to their friends.

In fact, says Singer, “If you’re not buying from a customer, you’re letting a sale walk out the door, just as if you were going to sell a diamond to that customer. If you don’t buy it from that customer, he’s going to walk down the street and sell it to someone else who’s going to make the money. Just like letting a sale walk out the door, it’s letting a buy walk out the door; you’re losing out. On the other hand, just keep in mind that if your offer is too high, you’re the one that still needs to sell it!”

Article from the Rapaport Magazine - August 2009. To subscribe click here.

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