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Sometimes the best kept secrets can no longer be "kept a secret". In the case of the Jeweler Industry (as a whole) the one place they don't want anyone hunting for treasures (not so well buried) is on eBay!
This is a fact! The industry professional journals are now writing articles and expounding on the benefits of Brick and Mortar Retailers expanding their business models to the Internet.
However, the advice offered to Brick and Mortar Retailers is to build a stand alone website and very few professional journals and magazines are recommending eBay as a way in which to enhance their online presence.
Why? Simply stated, advertisers (namely designers and manufacturer's of jewelry product-who support the professional jewelry trade publications) certainly don't want to be offering their products at higher discounts in order to propagate their retailers (customers) business models into the eBay venue.
The eBay Advantage:
There are many advantages to buying jewelry through eBay online auctions. The first advantage is pricing. In many cases, one could never go into any jewelry store and find the bargains that abound on eBay. In fact, eBay has changed the way consumers shop for jewelry. Where else can consumers find top graded gems and finished jewelry products for just pennies on the dollar?
There was a time when consumers went to what they thought was the "source" (the New York Diamond District) for their diamond purchases, however, over the years, those who want to keep up with the competition (in New York) have actually opened eBay stores and conduct auction events in order to move their merchandise quickly (especially during non holiday seasons).
Jewelry Pricing:
Many consumers can't understand why there can be such wide swings in gem and jewelry prices. First, the jewelry business is cyclical (seasonal). Some of the best prices on gems, diamonds and finished jewelry can be had during spring and summer months. This is because we (as jewelers) need to bring in the much-needed capital to make large purchases in stock for the holiday season.
This is not to say one can't find great bargains during the holiday season, as we end up with overstock, duplicate items, last years designs and in some cases, the item just did not appeal to consumers visiting brick and mortar retail jewelers. eBay provides an outlet for retail and wholesale jewelers who need to sell every piece of jewelry and gem they have in stock, in order to go back to their suppliers and Global Jewelry Shows to buy more. The more we buy in stock from our suppliers, the higher our credit limits are extended. If we pay cash for our products (and not take too many items on consignment) we end up gaining higher cash discounts, which allow us to sell near wholesale pricing. The bottom line is always affected by volume in sales. The more we sell, the higher our credit limits are extended. In addition, we cannot look at every gem or piece of jewelry based upon "did we or will we make money". On many pieces we lose money, however, if we have volume in sales (over the long term) we can stay in business. This is where eBay comes into play.
With 125+ million registered users worldwide, eBay allows us to reach the largest possible audience we could ever hope to achieve. There is no doubt, that finished jewelry products and gems find homes (worldwide) through our Live Auction Events due to the expansive reach of eBay. In other words, gems and jewelry, which do not sell due to the lack of interest on the part of consumers shopping in brick and mortar establishments, will sell on eBay due to the vast audience eBay offers. On another note, there are a few bidders who expect to pick up 10+ carat diamond necklaces in Platinum with VS diamonds for a few thousand dollars. This is just not possible in the "real world" let alone in any brick and mortar jewelry retailer (worldwide).
Expectations of getting a bargain on eBay run high (sometimes too high) and this is due to a few sellers, which may have to dump an item (once in a while) below wholesale cost. Those super, super bargains are far and few between, however, once someone scoops up a super bargain, they expect to find that same bargain abounding everywhere on eBay. While you'll never find "super bargains" on a daily basis, you can find bargains from those in the jewelry trade, who just need to "move" merchandise and move a lot of it quickly in order to keep pace with the industry.
Price Swings:
We are asked many times a day "how do offer such high quality gems and jewelry at prices my local jeweler can't offer?" First, we do not operate a brick and mortar location and if we did, we would need to set up an establishment in a highly visible location (undoubtedly with high rents). Second, we would have to advertise through all media outlets in order to get the consumer into our door. Third, we would have to buy jewelry display fixtures and then staff our store. Finally, the most expensive investment in such a store is "lighting". Not to mention the cost of carrying millions of dollars of insurance for product lines and liability. When you walk into a jewelry store ALL of these expenses are calculated into the price of every piece of jewelry and gem you buy! This is not even taking into consideration that every jeweler ends up dealing with "the middlemen" who mark up gems and jewelry to the point where what you'll find on eBay, cost 1000% less then what you'll find in your local jewelry store.
Our company, CertifiedJewelryandGems works on two premises. One, we are the creator of the "Fine Jewels Auction at Sea" events onboard the world's largest ocean liners. What does not sell on our cruise ship vessels ends up on eBay at steeply discounted pricing. We need to move merchandise quickly in order to re-supply and keep up with industry trends. While consumers can't believe what they can buy for “pennies on the dollar”, we also face an uphill battle with brick and mortar jewelry establishments in the United States.
Our industry is one of the only industries in which the competition is so fierce that you'll find a war being waged between online jewelers and brick and mortar jewelry retailers. Here's a good example. Let's say you purchased a 10+ carat VS Diamond & Platinum Necklace on eBay for $6500.00 (the average retail price of that item would be $35,000.00+ in a local jewelry store). Now let's say you take the item you won on eBay and brought that item into your local jeweler for his opinion of its value. In nine out of ten cases, the local jeweler will say you got "robbed" as he could offer the same piece for less. In no other industry, is the competition so fierce that wars are waged between online jewelry sellers and retail brick and mortar operators. Why does this happen? Because you did not buy the item from your local jeweler, he lost a sale and hopes to recover you as a customer.
When we're faced with such a situation, we have one question of the brick and mortar operator and the buyer, "if you can sell that necklace for $6500.00 - we'll send you $65,000.00 for ten of them". We have never been taken up on our offer (to date) and our customer comes to the realization that they got the deal of a lifetime! To those "brick and mortar" chains we have one thing to say...We all go to the same (global) jewelry and gem trade shows, we all travel extensively throughout Europe and the America's seeking out the best deals to increase our profit margins, we even sit down together and have a meal or cup of coffee - talking about industry trends. However, when we leave these shows, the gloves are "off" and the war wages on (until we meet again). In addition, you (the brick and mortar retailer) have one major advantage over us and that is the ability for your customers to come into your store and not only see the item, but also try it on. This is our ONLY disadvantage!
Appraisals:
Appraisals do assist those purchasing jewelry and gems online in achieving a comfort level when purchasing an item they can't see, touch and feel (in person). However, there are many different types of appraisals, you can receive an appraisal which discloses an Estimated Retail Value, one for Insurance Replacement Value or one which is deemed a Quality Assurance Report. Estimated Retail Value appraisals are based upon the average (national) estimated retail value the item could achieve (depending on the market in which you're purchasing an item). Insurance Replacement Value is what your insurance company will accept as the instrument of value in insuring your items. Remember, insurance companies have the right (in most cases) to replace the item at their cost as opposed to paying on a claim. Four years ago, the biggest jewelry retailer in the United States was NOT a jewelry chain but a well-known insurance company. They purchased over $1 Billion dollars in replacement goods.
You will also find that many insurers actually allow you to increase the value of your gems and jewelry by up to 5% per year! This should tell you something about the value of gems and jewelry in the marketplace and why prices only go up on merchandise and never seem to plateau or go down. If you opt for an estimated retail value appraisal, your premiums will go through the roof and this why many consumers opt for Insurance Replacement Value, as opposed to Estimated Retail Value appraisals. A Quality Assurance Report is just what it means, a QAR let's you buy an item in confidence, as it certifies that the gem or jewelry item you're purchasing is "certified" to be exactly as described.
No matter what type of appraisal you receive or request, always remember that every appraisal (no matter what appraisal firm you're using) is based upon opinion and opinions can vary from appraisal firm to appraisal firm.
The Last Word:
Always buy your gems and jewelry based upon what the piece will bring you to or, to the person for whom you're purchasing the item.
Other guides relating to jewelry and gemstone buying which you may find helpful are as follows:
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