Step 6: Appraising
Appraising gems and jewelry involves giving an opinion of value. If you take a pair of earrings to a jewelry store, the owners will give you their opinion of what it would sell for in their store. Take that same pair to three different stores and you’ll get three different appraisals. Opinions of value can be both honest and very varied.
Types of Appraisals
Four basic types of appraisals yield four different kinds of value.
- Replacement Value
- Fair Market Value
- Wholesale Value
- Liquidation or Scrap Value
The first two values are retail amounts. The latter two are variations of wholesale rates. You’ll almost always do replacement value appraisals for gem and jewelry owners and consumers. You’ll likely conduct wholesale appraisals, too. These are done in a similar manner. Of course, in these cases you’re researching the prices a jeweler would expect to pay.
Occasionally, your customers may ask you to value a lot. If the lot is too large to examine every piece, take a sample large enough to show every variation in size and quality. Then, multiply the sample’s value by the total size of the lot. For example, if…