Thursday, 15 March 2012

Buying diamonds off the street – Part II

Not only do I deal with jewellers who buy and trade diamonds as part of their retail business, I also used to do it when I was in retail.  Seeing what I’ve seen and knowing what I’ve experienced, this is what I’d do if I were back in retail today.

I would first check with city hall and/or RCMP to make sure that licensing and procedures were understood and complied with.  You may find that you need to follow similar in-take practices as pawn-shops and your buys might be subject to inspection by the local police seeking stolen property.

Then I would develop a buying policy and pricing charts.  The buying policy would be a short document that states how I was committed to following the laws of the land.  You can hand this to a client interested in selling, while you examine their jewellery.  It should have the effect of causing someone selling stolen property to take their booty elsewhere.

Pricing charts for me would start at maybe a quarter carat and up in the qualities that I would want to buy.  When you examine a diamond, estimate weight (or remove and weigh it), then you can open your book, run your finger down the price-chart and show the seller the number you’ve arrived at.  This gives the process much more credibility than picking a number out of the air, or consulting secret pricing charts, like Rap.

While in my past I usually paid for the feature diamond and gold-weight and took any accent diamonds as bonus, I’d probably give a token amount for accent diamonds knowing that one-day, I might accumulate enough to sell a parcel of them for $50 to $200 per carat.  I think it’s good marketing for the client to feel like they got paid for every component, even though you’re only interested in the bigger diamonds.

When making an offer, show your measurements and weights.  Demonstrate your use of price charts and then total-up the offer and give it to them straight.  You made your price charts with pricing that you’re happy with.  Never apologize nor hesitate when making an offer.  The client doesn’t have to accept the offer, and you should be okay with that.  If you are giving fair pricing, you will never feel guilt, nor disappointment when the client gives you their decision.

I would further recommend that you offer a substantially higher in-store credit amount than you do for a cash pay-out.  Most will take the cash (or cheque), but it does make them feel better that there was a higher value in-play.

More tomorrow…

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