JEWELRY APPRAISALS - WHOLESALE vs RETAIL vs INSURANCE VALUE?

I’ve done hundreds of Gem & Jewelry appraisals over the last thirty five years on everything from a single cut gemstone to a 25 kilo specimen of a gem mineral, from a diamond solitaire to the 3rdlargest cut diamond in the world and everything in between.

Inevitably someone will always ask me “well what is it really worth?” and to this I always answer “to who?”. That is because there are many different kinds of appraisals. The most common one is the “Insurance Appraisal” and the one everyone loves to see. But let me run down to you all the different appraisals there are.

APPRAISAL TYPES:

RETAIL REPLACEMENT / INSURANCE APPRAISAL. THIS TYPE OF APPRAISAL IS BASED ON THE PREMISE THAT THE OBJECT TO BE REPLACED OR PURCHASED FOR INSURANCE OR RETAIL REPLACEMENT. THIS IS NORMALLY FOR A SINGLE PIECE SPECIFICALLY MADE OR CUT FOR REPLACEMENT OR PURCHASE. THIS TYPE OF APPRAISAL TENDS TO BE THE HIGHEST VALUE PLACED ON ANY ARTICLE.

FAIR MARKET VALUE. THIS TYPE OF APPRAISAL IS BASED ON WHAT A WILLING BUYER WOULD PAY A WILLING SELLER ON THE OPEN MARKET.

COURT/LEGAL MARKET VALUE. THIS TYPE OF APPRAISAL IS USUALLY A COMPROMISE VALUE BETWEEN MARKET VALUE AND WHOLESALE VALUE.

WHOLESALE APPRAISAL. AN APPRAISAL BASED ON THE AVERAGE CURRENT PRICE CHARGED BY REPUTABLE WHOLESALERS FOR COMPARABLE ARTICLES IN WHOLSALERS STOCK. BASED ON SINGLE PIECE PRICING, NOT LOT PRICES.

LIQUIDATION APPRAISAL. THIS TYPE OF APPRAISAL IS THE LOWEST VALUE PLACED ON A SUBJECT ARTICLE THAT A KNOWLEDABLE BUYER WOULD PAY BASED ON SPOT GOLD OR ONE HALF TO ONE TENTH OF WHOLSALE VALUE.

If I were to venture a percentage of value it would look something like this;

Retail replacement 100%

Fair Market Value 50 – 100%

Court/Legal value 30 – 50%

Wholesale 33%

Liquidation 5 – 33%

Of course none of these is carved in stone and many times overlap in the real world.

My appraisals also contain a number if disclaimers and weasel clauses.

RUBY ROUGH

MANY TIMES I HAVE BEEN RETAINED TO EVALUATE ROUGH GEM MATERIALS FOR PURCHASE. SO I HAVE SEEN AND EVALUATED SOME OF THE MOST INCREDIBLE GEMS ON THE PLANET. THESE GEMS ARE NOT IN THE “MARKET” BUT ARE OFFERED TO ONLY A SELECT FEW BUYERS IN THE WORLD WHO CAN AFFORD AND APPRECIATE THEM. THESE INCREDIBLE GEMS CANNOT BE EVALUATED JUST BY WEIGHT AND COLOR BUT BY THE RARITY AND EVEN ONE OF A KIND STATUS. IT IS DIFFICULT TO APPRAISE A ONE OF A KIND PIECE BUT I HAVE BEEN CONFIDENT IN MY APPROACH TO THEM. I JUST BREAK IT DOWN INTO IT'S MOST DESIRABLE SIZED PIECES (IN MY MIND OF COURSE) THEN PRICE THEM OUT ACCORDINGLY. (refer to my HUB "APPRAISING UNCUT GEMSTONES")

HOW DO WE PUT A PRICE ON RARITY? SEEMS IMPOSSIBLE BUT IF WE THINK ABOUT IT, IT CAN BE DONE. THE PRICE MAY BE HIGH BUT THE GEM MAY BE MUCH MORE RARE AND VALUABLE BECAUSE THERE ARE NO OTHERS ON THE PLANET THAT CAN REPLACE IT. IN RECENT YEARS THE PRICES OF LARGE GEMSTONES HAS GROWN AT AMAZING SPEED. THEY ARE DESIRED BY INVESTORS AND EVEN BANKS TO HEDGE AGAINST INFLATION THUS PUTTING A DISPROPORTIONED DEMAND ON THE MARKET FOR LARGE COLLECTOR PIECES. IN RECENT ACCASIONS I HAVE FOUND THE BANK REJECTING LARGE STONE TRANSACTIONS DUE TO RECENT FRAUDULENT OCCCURANCES IN THE INTERNATIONAL MARKETS.

THE LARGER THE SPECIMEN THE MORE IT COSTS HOWEVER THE PRICES JUMP EXPONENTIALLY AT CERTAIN SIZES. JUST LIKE A .95CT DIAMOND IS MUCH LESS THAN A 1.0CT. THAT IS THE MOST DESIRABLE SIZE. FOR INSTANCE IF A 1.0CT BURMA RUBY SELLS FOR $1000 DOESN’T MEAN A 10.0CT RUBY WOULD COST $10,000 . THE RARITY OF THE 10 CT STONE MAKES IT JUMP BY TEN AND AGAIN BY TEN FOR ITS RARITY.

AND FOR ALL THIS THE VALUE IS STILL ONLY AN ESTIMATE, A SUBJECTIVE OPINION OF THE APPRAISER. BUT USUALLY AN INFORMED ONE, AS IN MY CASE, YEARS OF HANDS ON EXPERIENCE IN BUYING, SELLING, CUTTING, APPRAISING AND MARKETING PRECIOUS STONES. BUT STILL MY OPINION.

PETER LUMETTA, G.G.

Mbe Ste.#057

191 Silom Complex, 3rd. Fl.

Silom Rd., Bangrak, Bangkok 10500

Thailand, PH (668)705-38-446 (cell), Fax (662)231-3271

plumetta@aol.com

http://gemappraisals.vpweb.com/default.html

Comments 13 comments

Sam9999 profile image

Sam9999 5 years ago

Very interesting hub Peter. I always wondered about the different kinds of appraisals and now I know.


PETER LUMETTA profile image

PETER LUMETTA 5 years ago from KENAI, ALAKSA Author

Thanks Sam9999 I'm following you back!


Fay Paxton 5 years ago

Thanks Peter for writing this excellent article. Appraisals are one of those things one wonders about, but never bothers to check into. My own experience with appraisers had left me totally befuddled. You have given me clarity. Thanks.

up/very useful


PETER LUMETTA profile image

PETER LUMETTA 5 years ago from KENAI, ALAKSA Author

And another big Thank your great comments Fay, anytime you need to know about jewelry just ask. Peter


PW Hoffman 4 years ago

Genius is in the ability to make the difficult appear simple.

Thank you for taking the time to explain the mystery of gemstone appraisals.


PETER LUMETTA profile image

PETER LUMETTA 4 years ago from KENAI, ALAKSA Author

Thanks PW.


Daniel 3 years ago

My name Daniel an I own a 600 ct garnet Orange an red in color just wondering if it worth anything


PETER LUMETTA profile image

PETER LUMETTA 3 years ago from KENAI, ALAKSA Author

Hi Daniel,

If your garnet is transparent and with few flaws it could be worth quite a bit.

Peter


Can you identify this blue stone. If it is spinel, tanzanite, or saphire. Where would i sell i and mabe lead me in right direction to find out about it. Have pics. Hopefully, cynthia. 2 years ago

I have a rough spinel. 5 to 6 inch circumferance. Has lanender and yellow crystals. But mostly big blue crystals. Have pics. Can you identify? Cynthia. In ca.


Ashley 2 years ago

I have a zip lock sandwich bag about halfway full of these beautiful gems...I think that's what they are, they are transparent with a pinkish color threwout them....I think they're jades but not quite sure?? And they all seem to be uncut nothing in them tells me they're cut at all every one of them are jagged and they're small like probley the biggest one would be the size of the tip of your thumb?? Could u by chance tell me a round about price I could sell them for???


rachael 2 years ago

Ii have quite a few rough gems . Wondering what they are and if any are worth $


Rose pitzer 2 years ago

Dear peter I inherited some rough gems purchased in 1980 from a broker. How and where would I get them appraised. I have a serial number for them. If you want to answer can reach me at roseannapitzer@yahoo.com. They are rubies and garnets?


Al 2 years ago

Hi Peter,

I have a beautiful Certified 21ct Ziosite Tanzanite that glows different colors, VVS, oval.

What do you think it is worth.

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