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.
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%
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.
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.
191 Silom Complex, 3rd. Fl.
Silom Rd., Bangrak, Bangkok 10500
Thailand, PH (668)705-38-446 (cell), Fax (662)231-3271
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- Gemological Institute Of America
The Gemological Institute of America, GIA, is the world's foremost authority in gemology, diamond grading, jewelry education, gemology research, diamond and gemstone grading reports and laboratory services. Gemological Institute of America : Gemology