Everything You Need To Know About Appraising Jewelry as a Business

8:02

Not just anyone can run a jewelry store.

You need to know how to run a business, how the jewelry industry works, and how to determine the worth of a jewel. Luckily, these skills can be learned and strengthened with study, time, and experience.

Appraising jewelry is an essential skill for any jewelry store owner. You need this skill to make informed decisions when ordering inventory, pricing your products, and providing appraisal services to customers.

Becoming an expert in appraising jewelry requires diligent effort — but in this blog, we’ll give you all the information you need to get started. Here’s everything you need to know about appraising jewelry as a business.

Understanding Jewelry Appraisal Basics

As a jewelry store owner, both customers and business associates look to you to determine the worth of jewels and gemstones. Responding to this call with accurate assessments gives you credibility in the industry, and the more items you appraise, the better understanding you’ll have of what to look for.

First, here are things to consider when appraising jewelry:

Materials
Craftsmanship
Brand
Current market demand
Rarity

The scarcity of a certain type of stone or certain design often increases its value. For example, materials like alexandrite, red beryl, and benitoite are rare and valued higher.

Learning Appraisal Methods and Techniques

To more accurately appraise a piece of jewelry, you need to employ more sophisticated techniques. These techniques can be learned by taking a gemology course. While there’s no state or federal requirement to professionally appraise jewelry, getting a certification will help you sharpen your skills and gain credibility.

The Gemological Institute of America (GIA) offers high-quality training on jewelry appraisal, and offers a graduate gemologist diploma that can be earned in less than six months.

Comparative Market Analysis

This technique entails researching the value of similar items throughout the industry. Spend time looking through the offerings of jewelry stores and suppliers to gain a general understanding of industry pricing for various types of jewelry items and brands.

Intrinsic Value Assessment

This method involves determining the cost of the raw materials contained in a piece of jewelry. This is most useful if a piece of jewelry is damaged or outdated, and there is limited value apart from the raw materials.

Gemological Testing

This method may be required in appraising a piece about which you have limited information. Gemological testing means using gem lab equipment to determine a jewel’s characteristics. These might include carat weight, clarity, and geometric proportions, and whether it is natural, synthetic, or an imitation.

Appraising Inventory for Pricing

The skill of appraising jewelry helps you select the right inventory to purchase and secure profitable deals. It also helps you choose the right prices to offer your customers.

This process requires you to determine the fair market value of a jewelry item, negotiate a deal with suppliers, and then determine how much your customer base is willing to pay. Hopefully, you can secure a healthy profit margin for yourself in the process.

Before you make a deal with a supplier or set your own prices, make sure you do thorough research on the market and assess the quality and condition of the inventory. You want to inspect the jewelry yourself to ensure its authenticity before it goes on the shelves. If you know how much a certain jewel is worth in the market, you can avoid being swindled or setting your own prices too low.

Providing Appraisal Services to Customers

As a jewelry store owner, you may choose to offer consignment or appraisal services at your store. Consignment is when a customer brings you a piece of jewelry that you’ll sell at your store and you pay them a commission on the sale.

To effectively do consignment, you need to be able to assess the values of a wide variety of jewel items, including items that are decades old. Appraisal services can also be offered to customers who aren’t asking you to sell their item. Some stores offer complimentary appraisal services, but many charge for these services.

It’s important to provide accurate and unbiased appraisals to customers to maintain trust and credibility. If an appraiser is intent on purchasing an item, they may be tempted to deflate the estimate. But in the age of information, even those with little expertise in jewelry may be able to find information easier than expected. It’s always best to conduct appraisals ethically and honestly.

Establishing Appraisal Documentation and Records

All of the jewelry you appraise at your store should be documented. Keeping a record of appraisal values is helpful for you and your customers, as it prevents you from losing track of what you’ve appraised, provides a written assurance of quality for customers, and is helpful in taking out insurance policies.

Documentation for a jewelry appraisal should include:

Characteristics of the piece
Weights, grades, and measurements
Non-standard treatments the jewel has received
Whether the jewel is natural or synthetic
Manufacturer, workmanship, metal, and karatage of the mounting
Photographs
Monetary value of the jewelry

Including all of these components in appraisal documentation ensures you and your customers have all the information you need to buy, sell, and insure your jewelry.

Navigating Legal and Ethical Considerations

It’s important to consider legal regulations and ethical guidelines when appraising jewelry. For example, over-valuing an item intentionally on an appraisal is illegal under the Federal Trade Commission (FTC).

Industry standards, while more flexible than the standards of the law, should be understood and followed. For example, industry standards dictate that customer appraisals should be updated periodically so their insurance coverage can stay up to date, and recent changes in the market should be taken into account when appraising an item.

Whenever appraising jewelry, be sure to work with transparency and integrity, and respect your customers’ confidentiality.

Become a Jewelry Appraisal Expert With Jewel360

Becoming an expert in appraising jewelry helps you more effectively manage various aspects of your business. You can set optimal prices, secure better deals with suppliers, and provide high-quality appraisal services to your customers, building trust and credibility. As you appraise jewelry, always work with integrity, and be mindful of both the law and industry standards.

Remember: There’s always more to learn about jewelry appraisal. Even with years of experience and expertise, you need to continue to educate yourself to keep up with the shifting marketplace. Periodically read industry publications and browse the selections of a variety of suppliers to recognize trends in the industry and adjust your appraisals accordingly.

Having access to vendor catalogs helps you secure inventory for your jewelry store and helps you stay current on pricing and value trends throughout the jewelry industry. Jewel360’s all-in-one point of sale (POS) system gives jewelry store owners access to expansive vendor catalogs that keep them connected to the industry.

Specifically designed for jewelry businesses, Jewel360 has all the features you need to successfully run your store. Schedule a demo today!