Professional Jewelry Appraising

Appraisal Methodology

• The Cost Approach
  
  The cost approach is a common method for jewelry appraising that is generic in nature and is used when the item of jewelry can be replaced with similar items in multiple retail jewelry stores. With the cost approach, the wholesale cost of the components are determined, added together, and a markup applied. Sometimes, separate markups are used for the various components. For example, the diamond market is competitively priced and a lower markup may be used as opposed to the higher markup that a semi-mount consisting of gold and diamonds may have. The cost approach is the most common methodology at Garwood’s Jewelers with the market data approach the next most frequent method.
  
  
• The Market Data Approach
  
  This is a method that looks for comparable items sold in comparable markets. For example, an exclusive jewelry design sold only in certain jewelry stores, like John Atencio, should be valued based on the same selling price of that item in those exclusive stores. Most of the time when designer, trademarked or copyrighted jewelry is encountered, the market data approach is utilized. Often, a designer will charge premiums for the design work and then give a suggested retail price for the store to charge.

A Note on Markups

While no standards exist for markups, research has given us guidelines. In the early 1980’s retail markups were considerably higher than they are now. The inception of the Internet has contributed to lower retail markups due in part to more available information and increased use of lab reports for diamond grading, which makes comparison shopping easier.

-Information from Gemworld International, Inc.