Valuation Information

A note on Valuations

Lately there have been many changes in the way jewellery is valued. These changes were very necessary but have caused much contravercy, not only to the consumer, but within the industry itself. I decided to create this information sheet to explain a little the changes that have been made and why they were necessary. Hopefully it will answer any questions and of course if I can help further please feel free to contact me.
The Changes:
In the past jewellery has been valued by firstly working out a costing, this should be carried out by market research (contacting suppliers for pricing details AT THAT TIME) This has not always been done with many valuers using set figures for gold, diamonds etc. The relevant mark up is then applied, in the past the mark up guidelines were given to all valuers and were all the same.
So now, we value by again working out costings by doing market research, but when it comes to mark-up every Jeweller is going to vary, this is why we now ask when doing valuation “where you would like to replace the piece should it get lost?” Our mark ups are then based on market research of that given information. For example you may want to replace your ring at a Perth city based, bricks and mortar (shop front) jeweller even though you purchased it on-line, or vice versa. This can cause some confusion and much misinformation, but the best analogy I can use is this, if you were to purchase a can of “Coke” tomorrow how much would you pay? Well you can go to the supermarket and buy a multi pack and get the can for say 30cents or you can go to the up market hotel in the city and pay $5.00 and of course there is everything in between. Jewellery operates in exactly the same way. We need to specify which market you wish to replace your piece in on the valuation. We also need to specify why you are having the piece valued as this too can affect how we calculate our “mark-up” For example the valuation may be for insurance replacement where we will value at recommended retail, it may be for a second hand sale, and the price will obviously be less than retail as it is not new, it may be for probate etc. And the price on the certificate will vary according to the instructions given.
A few Key Points:
1) When having a piece valued provide all the information you have on that piece to the valuer, your valuation will be much more accurate especially if information of the sale is given, it can be very difficult to determine exact stone sizes and qualities after they are set. We may not always agree with the given parameters but it is very helpful. Valuation should not be a test of how skilled the valuer is, it is a technical report that we must be able to defend in court if it ever came to that. Diamond settings, cuts of stones, girdle thickness and many other factors can mask the true dimensions for many gemstones; all our “estimates” on stone weight is based on calculations, the more solid information we have the better.
2) Treat valuations as technical information, for too many years valuations have been used as selling tools, unfortunately there has been over inflation of figures for selling purposes or to make clients “feel” like they got a great deal, this is no longer the case. Valuations should represent the price that you could buy that piece at today in the market place you wish to buy it in. Keep in mind too that over inflated valuations also equal higher insurance premiums and no one would be happy paying premiums on a ring based on $10,000 to find on replacing its worth $7000. So as I said base valuations more on their technical merit rather than a monetary value.
3) If you have diamond pieces keep an eye on the AUD verses USD (US dollar) a ring purchased or valued in 2003 would have a higher valuation back then than it would today. And a diamond purchased today may go in value if our Dollar drops back again. If there are any major changes it is worth getting an update on your valuation to make sure you have adequate cover.

Thanks for taking the time to read this and I welcome any feedback.