Recently we’ve had clients interested in selling second-hand jewellery end up feeling disappointed because what we’ve offered them is far lower than what they expected (they hoped to receive the value that was reflected on their valuation form from the jeweller or insurer).
It’s a mistake all too often made, and we hate seeing our clients upset…
What is very important to understand is that when you receive a valuation from a jewellery store, the value of the items is for insurance purposes only. In case you need to replace the item due to theft or loss… In fact, the retail valuation can be as much as 5 to 10 times higher than the actual intrinsic value.
So why do jewellery stores charge what they do? Don’t forget that they have many expenses and they are understandably driven by profit. The cost to manufacture jewellery is very high and this leads to high retail prices.
So as an example, a manufacturing jeweller, would sell a plain gold band (like the ring in the image below) made of 3g of 18ct gold to a retail jeweller for R5000. The retail jeweller would then sell that simple band to an individual for R7200. Once the owner is ready to sell their plan gold band to The Gold Guys, we would offer them R900.
The Gold Guys valuations are based solely on the value of the extractable gold and its purity. This also means that you will never see your piece of jewellery being worn by someone else.
The above figures relate to a plain gold ring – if the jewellery is more intricate and detailed in design, it will cost more. And when it comes to diamonds – well that’s a WHOLE other story – one which we’ll post about next week, so be sure to come back and read it.
We hope this helps you understand the valuation vs retail price vs intrinsic value difference a bit better. Please don’t hesitate to get in touch with us if you have questions…
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