How Jewelry Resale Prices Are Calculated (2023)

Selling jewelrycan seem like an overwhelming process when it is done for the first time, and understanding pricing is essential.

You may have heard the story of someone buying a brand new car from a dealer and then driving it off the lot. When the car is being sold secondhand years down the road, it is always worth much less than what was initially paid for it at the dealership.

Jewelry buying and selling works in a similar way. The value often depreciates over time, and the retail price initially paid is inflated to cover business expenses: employee wages, rent for the building, marketing, electricity, etc.

As in every business, jewelry retailers need to cover their costs, as well as make a profit. Therefore, their pricing usually falls in the range of being between double or triple the wholesale price.

Retail markups are seen everywhere, with even more dramatic margins in the fashion and electronics industries. For example, someone may buy a $50 pair of jeans that cost $8 to make.

So, as you can see, the margins for fine jewelry are not unreasonable.

Looking to sell your engagement ring or other diamond jewelry? Check out Worthy, which is an online jewelry auction platform — you can mail in your jewelry and let Worthy organize the sale for you, sending you the money after the piece is sold.

Importance of Appraisals

When getting an appraisal done for your jewelry, the purpose of the appraisal needs to be distinguished beforehand and discussed with the appraiser. The reason for this is that different types of appraisals have different values, and if the wrong type of appraisal/value is assigned, it likely will not hold up as a legal document.

Here is a breakdown of some value and appraisal types that relate to jewelry:

Retail Replacement Value

Defined as the highest monetary amount that would be required to replace a property with another of similar age, quality, origin, appearance, provenance, and condition within a reasonable length of time in an appropriate and relevant market.

Fair Market Value

The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Insurance Appraisal

By far the most common appraisal done for jewelry is the Insurance Appraisal, which often first comes into play when buying an engagement ring.

With the purchase of a sentimental, high value item, it is essential to have an insurance appraisal done so that your insurance company will cover issues that may come up over time with a ring.

Essentially, the value should be similar to that of replacing the jewelry with a similar piece of jewelry in a relevant market being sold at the retail price.

This type of appraisal uses the Retail Replacement Value. Retail stores sometimes provide insurance appraisals, or you can contact the National Association of Jewelry Appraisersfor a recommended appraiser near you.

Resale Appraisal

When upgrading jewelry or looking to make extra cash, a Resale Appraisal determines the Fair Market Value of the jewelry for the purposes of valuing the jewelry with the intention of it being resold.

The jewelry can then be resold again in the trade, or may be sold directly to an end consumer.

For instance, WP Diamonds is an example of a BBB-accredited online trader that offers complimentary Resale Appraisals for those interested in selling.

Estate Appraisal

IRS regulations mandate that Fair Market Value is used to value the objects owned by a deceased person, and an appraisal of all their assets is done for tax and distribution purposes.

Family Division Appraisal

In a divorce, upon the death of a family member, or in estate planning, a family division appraisal can be created, which lists all tangible assets, assigning the Fair Market Value at the date of examination.

Jewelry as Collateral

Although banks will not usually entertain jewelry as collateral for a loan, there are companies that do offer loans for jewelry as collateral.

Often, these specialty companies include a complimentary appraisal as part of their process.

Charitable Contribution or Gift

This type of appraisal is used when donating jewelry of significant value to a qualifying United States tax-exempt organization, such as a university or museum, and Fair Market Value is used in the appraisal.

Damage or Loss of Value Appraisal

An appraisal used by adjusters, insurance companies, or the insured party, this type of appraisal is used to assess a lost, stolen, damaged, or destroyed article of personal property.

A value is established for the item in its original condition, as well as its current value in its present condition.

What an Appraisal Should Include

In general, every appraisal should include a description of the jewelry: weights, grades, measurements, stones, metal type, treatments, etc. It should verify the appraiser’s credentials and list the relevant value for the appraisal type.

Pricing for appraisals varies greatly, and appraisers can charge a flat rate or an hourly rate, usually ranging from $50-$300/hour, depending on credentials and experience.

Be sure to check that your appraiser has Errors and Omissions insurance as well, which will protect the appraiser in case there are any mistakes made on the appraisal, and which will insure that you are properly compensated if there is a mistake.

Value Reality

Pricing when selling your jewelry usually comes under the jurisdiction of needing a Resale Appraisal, as mentioned before. The idea of Fair Market Value can seem a bit abstract, so let’s put this example in more manageable terms.

Let’s assume that Joe bought a diamond ring for $5,000. Before sales tax the price is $4,500. Reselling the ring to a reputable trade contact/company would generally bring in a price of between $1,500 and $2,500. Why is the resale price so much lower?

As mentioned before, a jewelry retailer has to pay for wages, maintenance on a building, furniture, security cameras, marketing, water, and electricity, amongst other things, as all business owners do.

These overhead costs increase the price of the diamond ring, but are not related to the value of the diamond ring without extra associated costs.

Finding a certified gemologist (F.G.A./G.G.) and appraiser to value your jewelry, or working with a company that has them on staff, will help you on the journey to recovering as much of what you originally paid for your jewelry as possible.

Do your homework and research your jewelry, finding out what jewelry within a similar scope is selling for online, as well as amongst trusted individuals in the trade, such as your local dealer or jeweler.

An alternative option for selling is working with an established auction house, such as Christie’s or Sotheby’s (for high value items), selling through an online platform such as Craigslist, or selling directly to a friend.

You can also try a brick-and-mortar retail jewelry store — some of these retailers buy second-hand jewelry. Just make sure you go to more than one store to get several offers so that you can compare and get the best deal.

Author: Olga Gonzalez is a certified gemologist (FGA) and Founder/CEO of Pietra PR, a NY-based communications agency specializing in the fine jewelry trade, and she has been working in the business since 2005. Olga has been writingfor a variety of trade publications since 2008; she also has appraisal experience and is the USA Ambassador for the Gemmological Association of Great Britain.