From Diamond to Appraiser to Setting – No Gap

[Regular Guy]

with all the activity of new stickies today, I wanted to wait...but this is for NoonersMom...

One of the things you’ve got to hand to Blue Nile is their womb to tomb program, inclusive of a proprietary insurance program before you go.

And, one of the things I hated about the diamond buying process was the need to orchestrate the steps:

- seeing the diamond
- trying to get it to the appraiser before having it set,
- but deciding to forego that to simplify the process,
- having it set with the internet vendor first after all, and then, of course,
- not end up not having the diamond set locally to take advantage of the “all in one” services the diamond vendor is sought to provide
- and only then, having the diamond viewed by a local appraiser who does not have contemporary cut grading technology
- and who could not do his best work with it anyway, since it is already set

Maybe the “all in one” can shift to the appraiser, thus this idea, which – by the way – also solves a number of problems, creating a….win, win, win, win.

So, what do you think of this: the…

New Official Good Appraiser Partner Pricescope Program, or…

NO GAP Pricescope Program

To make it work, in some fashion, (all the little details would have to be worked out…)

- Leonid could come together with whichever of his featured or selected appraisers, who it’s understood are sensitive to, knowledgeable about, and skilled in the discrimination and verification of well cut diamonds,
- He recreates in a sort of way the Jeweler of Choice program, modifying it, so that
- The appraiser partners with the Jeweler

And the result is this:

- The diamond buyer sends the diamond to the appraiser, just as now, either pre or post payment
- The appraiser expresses his satisfaction to the buyer
- Then the appraiser, with pre-agreement with the buyer, sends the diamond to the designated local jeweler, who will have valued being a part of the transaction on some basis, rather than being excluded
- The buyer goes to the jeweler, sees it with them, and they can look at it together, since it has already been cleared as good by the independent appraiser, and together they can even try to take another “swing of the bat,” with the buyer having the jeweler’s inventory at hand to try to dissuade him
- But failing being dissuaded, the jeweler, with either his own setting, or one pre-selected by the buyer from either the diamond vendor or a third party, then sets the diamond
- With the good will having been established by the relationship with either or both the appraiser and Pricescope, such that the local jeweler will hope for much future business from the diamond buyer,
- The jeweler then sends the ring back to the appraiser, for final appraisal documents to be drawn up, for the appraiser to confirm again the diamond is the same as originally seen, and the ring setting had been done well
- And the appraiser sends the ring directly to the buyer, who can then bring it back to the jeweler he has now bonded with, and they can look at it proudly together
- Even though it was Dirt Cheat Diamonds, GOG, WF, or you name it that actually got the biggest piece of the action

And look who benefits…

- Certainly the buyer benefits, by not having to orchestrate anything, really, because either or both the appraiser or Pricescope will have set up the network of trusted relationships that will have initiated this process, allowing him to have his diamond appraised by a verifiably talented appraiser, set locally, and only after he has seen it personally, vouched for again by the expert appraiser, and in the end, having established a relationship with a local jeweler after all
- The appraiser benefits by having appraisal business he’s not likely to otherwise have, in concert with having developed a relationship with a jeweler local to the buyer
- The local jeweler benefits by being involved in the transaction, whether by selling a setting, conceivably selling a different diamond altogether if they have a convincing specimen (and wouldn’t the buyer benefit from the opportunity to be challenged…now with birds in both hand and bush), or at least by doing the setting work (they should be properly insured or responsible for this work, of course)…and most of all, by having developed a relationship with the buyer that will stand independent of the internet vendor
- Pricescope benefits, if it will have participated (this can be done by the appraiser alone), by helping weave this network of participants together…possibly by gaining in ad revenue…definitely by the Google philosophy of increasing audience share for whatever advertisers it does have, because it serves its constituents that much better.

Call it a crack pot idea...maybe it even exists informally already. There could be lots of details to work out, and there may be any number of problems with it.

But, I offer it up as a possibly useful idea. I think I would have benefited from it. And, I will say that it can be implemented in several ways. For example, there was a jeweler I did approach before purchasing my diamond, but the interaction became awkward, and I quickly let that strategy of using the local jeweler that was recommended, fall away. Rather than running this as a pre-established program, it could even begin as a customizable program, where the appraiser would contact the jeweler pre-identified by the buyer on behalf of the buyer, explain the request, and get their participation. In this way, the network of local and participating jewelers can even be established from the ground up, as the program is used.

Looking forward to your reactions, however they may run.

 

[Richard Sherwood]

In a perfect world this would be a perfect idea.

However, in the real world, here is where I think you would encounter problems:

- He recreates in a sort of way the Jeweler of Choice program, modifying it, so that
- The appraiser partners with the Jeweler

A lot of independent appraisers would be reluctant to be viewed in a "partnership" with a Jeweler, as it would give the impression of a loss of impartiality, or non-bias.

- Then the appraiser, with pre-agreement with the buyer, sends the diamond to the designated local jeweler,
- The buyer goes to the jeweler, sees it with them.....and together they can even try to take another swing of the bat, with the buyer having the jeweler's inventory at hand to try to dissuade him

A lot of vendors would not be crazy about their non-paid for diamond falling in the hands of a competitor.

Some jewelers might be flustered about having to compete with internet priced stones. Imagine this scenario: The jeweler has nothing on hand that comes close in look, quality or price. In their crowded showroom, potential customers standing by view the discussion between the jeweler and the internet buyer, with the buyer gloating about what a great deal he got on the internet, and how much nicer it is than the jeweler's goods. The jeweler's crowded showroom slowly thins out as potential customers go home to check out diamond prices on the web...

- But failing being dissuaded, the jeweler, with either his own setting, or one pre-selected by the buyer from either the diamond vendor or a third party, then sets the diamond

In either case, the jeweler has to take responsibility for setting a competitors stone that he didn't make a dime on. In the last scenario (setting a competitors stone in a competitors mounting), he makes 50 bucks while risking a liability of thousands.

- The jeweler then sends the ring back to the appraiser, for final appraisal documents to be drawn up, for the appraiser to confirm again the diamond is the same as originally seen, and the ring setting had been done well

What if the setting hasn't "been done well", and the appraiser has already compromised himself by getting into bed with the jeweler? All kinds of headaches can arise for the appraiser, with the client being upset with him for recommending the jeweler, or feeling that the appraiser should compensate him if the jeweler refuses to do anything for the consumer, etc, etc, etc.

- And the appraiser sends the ring directly to the buyer, who can then bring it back to the jeweler he has now bonded with, and they can look at it proudly together

And the jeweler groans when he sees this internet client coming in to his store again, knowing that at least another half hour of his time is going to be taken up in the tail end of this totally non-profitable situation, while fearing that more of his customers will overhear the conversation, asking to see the ring, ooohing and aaahing over it while asking "how much did you pay again for that diamond?"

Every customer that walks out the door represents potentially thousands of dollars of lost revenue to the jeweler. When I learned the business working for a third generation jewelry firm, they used to refer to these situations as "deal killers", and would have somebody on the alert to handle them promptly, courteously engaging the "deal killer" in as quiet a manner as possible, and then getting him or her out of the store as quickly as possible.

- The local jeweler benefits by being involved in the transaction, whether by selling a setting, conceivably selling a different diamond altogether if they have a convincing specimen, or at least by doing the setting work (they should be properly insured or responsible for this work, of course;

Jewelers cannot get insurance for the setting of diamonds. They have to cover it themselves, as no insurance company wants to take the risk.

There's just not enough incentive there for a lot of jewelers, and plenty of downside for both the jeweler and the appraiser.

That's why diamond vendors and jewelers try to keep as much of the business "in house" as possible. They don't have to worry about their stone being switched, or damaged by an incompetent setter. They don't have to worry about the diamond being maligned by a competitor coming from a "sour grapes" standpoint. Since they sold the diamond, made a profit, and have a setter they know and trust, they don't mind the setting risk.

I guess I've seen too much BS to get excited about the idea. I personally think the less hands in the process, the better. Have the pros do what they do best, and then have another pro confirm it or criticize it.

 

[aljdewey]

Honestly, I felt my solution was better.

Vendor ships diamond directly to appraiser (who in my case was Rich Sherwood). I trust my appraiser to be my eyes and tell me if my stone is the best thing he''s ever seen or not. (It was.)

Appraiser performs appraisal on loose stone and has local trusted jeweler set it.

Appraiser mails completed piece via overnight mail to customer - who is ELATED.

Couldn''t be much easier.


In the event appraiser doesn''t have a trusted local jeweler, the appraiser ships back to vendor, who then sets stone and ships it to customer.

Win/win situation. Appraiser stays independent, local jewelers not threatened by internet stone, customer not harassed with seeds of false doubt from vendors who didn''t get the sale.

 

[Richard Sherwood]

Al, I no longer offer a setting service for clients (such as I did for you), but instead recommend they have the selling vendor set the stone, or use a local jeweler of their choice.

This is because of two reasons. One, my setter started getting nervous about the liability of setting all these high quality ideal cut diamonds which were coming in.

Two, I had an unpleasant experience when a client was not happy with a setting job. They sent it back (which I paid for), and the setter re-did the job with a new head (which I had to pay for, as he felt his first job and head was fine). I then fedexed the ring back to the client (at my cost).

The client still did not like the setting job, and asked for it to be redone with another head. I told them to send it back again (which I paid for), and then had the setter reset it in another head (which I paid for. we're talking platinum heads here.) I then fedexed the ring back to the client (at my cost).

In the end the client was happy, but I was out $500 in shipping and platinum heads on an appraisal that I charged $135 for.

Now I just guarantee my own work, and am responsible for only that which is in my sphere, appraising. I let the vendors take care of what they do best, or recommend the client find a jeweler they like and work directly with him.

 

[Regular Guy]

Rich,

I''m gratified that you''ve taken the time to do a detailed critique. It did seem to be an idea that provisionally solved a number of problems, and seemed to close a lot of gaps (maybe leaving even no gap!). Even you agreed at the outset that:

"In a perfect world this would be a perfect idea."

Any chance that, in a less than perfect world, we can avoid throwing out the baby with the bathwater, by salvaging several core elements?:

- if seen as worthwhile, Pricescope rather than the appraiser is more active in securing lists of available jewelers
- Ostensibly, the name and concept changes to more become: local jeweler partner
- The understanding is that the setting would be bought at the jeweler
- If it makes a difference, it would be agreed that it''s not a freebie that the diamond goes to the appraiser with the pre-purchase benefit...and instead...only goes to the buyer with no strings, it''s already paid for by the buyer, but the 10 - 30 day return window is in place
- the underlying philosophy for the jeweler could be that with respect to the internet...based on margins, we can''t beat them, we don''t want to join them (changing the business model), but we don''t want to be left out of the game, and we do want to take advantage of this customer''s doing a major purchase to get involved with their life, even if not for the central diamond.

Based on these changes to the original suggestion...most of the re-engineered model can be accomplished without any structural changes in what''s happening already at all, really. The only task for the diamond buyer is finding the local jeweler who would readily engage in a relationship with the customer on the purchase of a setting alone. Maybe that''s not so hard, on the face of it. Frankly, I had begun just such a conversation with McCutchen Jewelers in DC metro, recommended here on the boards, their advertising suggested they really wanted to go head to head with all vendors, but when trying to go forward with the details of purchasing the setting, the conversation did bog down; I let it go. If some sort of specified relationship could exist between -- say -- Pricescope and a local jeweler, wherein they''ll say, we''ll play second fiddle, too!, that could be a valued asset for the diamond buyer, while trying to bring to closure the initial diamond purchase. Although in a nominal way, it will engage the jeweler, and if done in a reasoned way, it may become clear that they would prefer to go after part of this relationship, rather than go for all or nothing, leaving nothing. Note, also, with the setting purchased at the jeweler, this, too can be sent back to the original diamond vendor, if this is seen to solve a problem with respect to liability and insurance.

Rich, you do review the reasons above for why even this will not work. Not sure if this has any remaining legs. Since only a small group of appraisers nationally have the sensitivity and expertise to provide the kind of assistance that I think will serve a discriminating shopper best, you chief among them...this idea was just trying to go the distance in making the long distance relationship with you and your colleagues most practical.

Unless there are other proactive thoughts about this, many thanks,

 

[strmrdr]

I know for a fact that that a couple of the PS vendors would never send a diamond to someone else that sells diamonds until it has been paid for and the client signs a release for it to be sent there.
Some wont at all even on paid for goods.
It goes to the client or an independent appraiser.
Especially if a credit card is involved.

 

[Regular Guy]

With the recent mentions of "DiamondsOnWeb.com," my imagination had been taken by them today until I looked a bit more closely...apparently their signature program doesn't guarantee the diamonds are in house, and their signature "plus" diamonds, which are specifically evaluated for their visual performance, are so few and far between that I had to ask them to show me they had one....and they did show me....one.

But never mind. They actually have put a jeweler network in place. Also, they have a program for communicating with a particular local jeweler, if you want to use one of your own election.

I've not given it much study, and have no immediate cause to make me study this very closely, but...with the idea of using one of the vendors here as ones primary and targeted purchase, I could see taking advantage specifically of their jeweler partner program, having 2 diamonds sent out, and using the opportunity to double check ones pick (noting, payment to the Pricescope vendor would first be in full, after which you are relying on the examination period that the Pricescope vendor provides):

a) comparing the Pricescope vendor's diamond against
1) the two sent from DiamondsOnWeb
2) the stock in hand with the neighborhood jeweler
b) after comparison is done, send the selected diamond to the favorite appraiser at a distance
c) having the jeweler set whichever diamond is selected, in whichever setting is selected...which could provisionally come from any source...this should be talked up with the neighborhood jeweler before setting foot in the store, of course...where it's decided what services they would perform, and under which conditions. Possibly the appraiser just sends the diamond back to the Pricescope vendor for setting, and the comparison effort, if made in good faith, will have been relationship building enough that a relationship is established with the local jeweler on the basis of that alone.

Ideally, no gaming is actually done, since without this sort of review of options, the diamond buyer has done no real world actual comparisons to the targeted stone, so the context is very practical, and the diamonds selected from DiamondsOnWeb, if AGS, for example, can be inspected before being requested for their HCA scores, making that ultimate comparison process all the more viable.

Anyway, just an idea, for making use of resources that already exist, with the intent of both making things work a bit better, and possibly keeping everyone a bit more on their toes.

 

[aljdewey]

Date: 3/31/2005 12:34

9 AM
Author: Richard Sherwood

This is because of two reasons. One, my setter started getting nervous about the liability of setting all these high quality ideal cut diamonds which were coming in.

Two, I had an unpleasant experience when a client was not happy with a setting job. They sent it back (which I paid for), and the setter re-did the job with a new head (which I had to pay for, as he felt his first job and head was fine). I then fedexed the ring back to the client (at my cost).

The client still did not like the setting job, and asked for it to be redone with another head. I told them to send it back again (which I paid for), and then had the setter reset it in another head (which I paid for. we''re talking platinum heads here.) I then fedexed the ring back to the client (at my cost).

In the end the client was happy, but I was out $500 in shipping and platinum heads on an appraisal that I charged $135 for.

Gee, I''m sorry to hear this. Just goes to bear it out - no good deed goes unpunished, huh?

Sounds like another one of those instances that qualify for "fire the customer". It disturbs me to hear stories like this.

When I asked if you could do this for me, I recognized that it would be an indulgence on your part....that schlepping someplace in town to get it set wasn''t part of your normal appraisal package. I appreciated that you went out of your way for me.

I was completely happy with the job your local jeweler did, but had I been unhappy with any aspect of it, I simply would have found a local jeweler here to fix it. I figure it was gracious enough that you did it for me in the first place.

I can certainly understand your setter''s hesitancy on the liability issue, though.

 

[denverappraiser]

The concept of an insurance component to the setting charge has always struck me as pretty reasonable. There are a few kinks that need to be worked out in the details but basically it’s fair although a pretty tough sale. Setting the rates is an interesting problem and there are some complications. Do you charge more insurance for setting princesses than rounds? What about thin girdles, fragile gemstones like emeralds and other details that give setters trouble? Do bench workers with lower breakage rates get paid more? Do you charge more for their services? Do you charge extra if the ring (purchased elsewhere) is a boneheaded design or if the stone doesn’t fit properly?

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[pricescope]

What is your policy, Steve, for this case?

 

[oldminer]

It is a difficult situation to bridge all the gaps together., The attempt to put forward ideas is commendable in itself. As an appraiser we know there will be many opinions on who is responsible during different elements of the process. Many independent appraisers are tiny business enterprises with little capital to back them up in case of a problem. Some may not have professional liability insurance, some might not have a good safe, some may have inadequate or no insurance for theft, robbery or fire. Many cannot support the responsibility of taking on a setting job for $30 or $40 bucks and say they will be responsible for any damage. The nightmare setting and repair job in Rich''s post is something we have not had in such a bad way yet, but no doubt, we''ll get one someday, too.

It is a problem of a small business and no one can really cure it. My own appraisal firm has grown to the level where the responsiblity is on us and we are able to accept it. If we say we will secure a stone in our safe, we have a truly secure environment with adequate protection and insurance. If we say we''ll set a diamond, it is on us and the setter to do it right and to stand behind it if there is a problem. While rare, a diamond can chip or break during setting. We can repair it, replace it if necessary and take the damaged one as salvage to recoup most of any loss we may have had. This takes capital and fortunately over time we have this covered, too.

I think that many of the steps could be smoothed out, but not all of the problems can be cured. Right now, the system is working very nicely although it is somewhat segmented and a little slow. If there is any way for us to asssist in making it better for the entire industry, we''d be pleased to work on it.

 

[niceice]

Date: 3/30/2005 4:39

7 PM
Author:Regular Guy

The buyer goes to the jeweler, sees it with them, and they can look at it together, since it has already been cleared as good by the independent appraiser, and together they can even try to take another “swing of the bat,” with the buyer having the jeweler’s inventory at hand to try to dissuade him
- But failing being dissuaded, the jeweler, with either his own setting, or one pre-selected by the buyer from either the diamond vendor or a third party, then sets the diamond
- With the good will having been established by the relationship with either or both the appraiser and Pricescope, such that the local jeweler will hope for much future business from the diamond buyer,
- The jeweler then sends the ring back to the appraiser, for final appraisal documents to be drawn up, for the appraiser to confirm again the diamond is the same as originally seen, and the ring setting had been done well
- And the appraiser sends the ring directly to the buyer, who can then bring it back to the jeweler he has now bonded with, and they can look at it proudly together

The first objection we have is that if there is an official arrangement between dealers and appraisers it opens the door for accusations of collusion. By allowing the customers to select an appraiser of their choosing, the appraiser remains a recognized neutral party and clearly represents the interest of the buyer.

Beyond that, if the customer already had a trusting relationship with his / her local jeweler, then they would already be doing business with that local jeweler. The fact that a person is willing to purchase a diamond on-line clearly indicates that the local jeweler has already failed to provide the customer with a level of customer service, quality and price that is acceptable to that customer.

So we''re supposed to send the diamond to the appraiser and then the appraiser is supposed to send the diamond to the jeweler or setter and then the jeweler / setter is supposed to ship it back to the appraiser for review and then the diamond is going to be shipped once again back to the jeweler / customer? Wow! That''s a lot of shipping! We were considering buying stock in Fed Ex based upon our current annual shipping volume alone, if you guys are going to start to spend this type of money on shipping, we''re just going to open up our own shipping company

Don''t mistake our comments Regular Guy for not supporting your concept, we think that there is room for improvement in the way that online sales and delivery occur, but our experience with most of the retail trade has not been supportive of online diamond sales and what you are asking is essentially the equivelent of asking us to pour a bucket of blood over our heads and dive into shark infested waters... Traditional Brick & Mortar jewelers have the initial advantage regarding the opportunity to earn their clients trust and business, it is in their failure to provide their customers with accurate information, education, quality products and fair pricing that causes their client to turn to online dealers in the first place, at least this seems to be a reflection of our clients as a whole, the last thing we would do is ask our clients to return to an environment which was not conducive to their satisfaction in the first place.

 

[Regular Guy]

Dear Robin & Todd (it''s not really both of you writing, is it?),

Two principal drivers, I think are at work:

- the need for ongoing maintenance, and a trusting relationship that will make this not only guiltless, but allowing this assistance to be done with ease

- the desire to feel that one has optimized, relatively, when making that significant purchase. Forgetting about CZs...the diamonds you offer frequently come at some premium over those offered on the Quick Search, for example, as you know, and you understand that the difference is worth making. Making the effort to reach you as a vendor, the shopper will have understood that promise at the outset. Then again, deciding that difference is worth it, at the end of the day...the hope is that some context can be created for the rubber to meet the road on that judgement. Thus, some of this...

Thanks; it seems as though the model for putting this together being discussed has evolved a bit in this discussion from the text you selected, but I don''t know that any answers are there as of yet....

Regards,

 

[denverappraiser]

Ira,

At the risk of sounding flippant, how about this as an approach?

1) Find a jeweler that you trust.
2) Tell them what you want.
3) Buy it.

This puts the entire burden on the vendor. They simply have nowhere to pass the buck. This is actually the procedure used by almost everyone who buys a piece of jewelry, or pretty much anything else for that matter. This gets complicated because it’s difficult to know who to trust and it’s sometimes difficult to decide what you want although this second piece is mostly resolved by advice from the vendor so we’re really back to the trust thing.

What is being danced around is the price. This is not generally the cheapest approach and just about everyone wants to get the rock bottom price. One of the ways to do this is to demand that the dealers parse their offer and allow you to shop each component individually. How much is the diamond? How much for the ring? How much to size it? How much is the financing? How much is the warranty? How much for the packaging? How much for an hour with the gemologist? How much to show me 50 stones and let me compare? By making it ala carte and by using different suppliers for the various components, it’s often possible to reduce the price but the tradeoff can be the gestalt of the product. It’s also relatively easy to omit an important detail that you didn’t even know you wanted. Setting risk falls solidly in this category, as does the exposure to the shipping companies that may be involved. Few people ask about these issues. Did you want rhodium with that sir? You probably do. What if you forget to ask because you’ve never heard of rhodium? You probably won’t get it.

Many people are offended by how much some jewelers want to charge for their services and they tend to count them as not very valuable. I absolutely agree, some are just plain useless. Others are a huge benefit to the consumers they serve and, IMO, charge a very reasonable fee for a valuable service. The opposite extreme is to assume that there is no value added by the dealers at all and that you must turn yourself into an expert in all of the various details order to assemble a reasonable package. For people who enjoy this sort of thing this is fine, for most of the world it’s nuts. Sometimes it even results in pay more and getting less.

Fancy restaurants don’t usually charge extra for the piece of parsley on the plate and all that extra silverware but you can bet it drives up their costs and it ends up as part of your bill. If they were to itemize each component individually, few people would make the same selections that the chef is making and parsley would not be a good seller. What’s lost is part of what makes the whole dining experience valuable. You go to that restaurant (or not) precisely BECAUSE of the selections being made by the chef. If there is a problem with their food, presentation service or prices, you have ample opportunity to dine elsewhere but bringing your own silverware and asking for a discount is not a reasonable tactic.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[Jimbo34]

Regular Guy

I couldn't quite follow your above post.............So are you saying you would or you would not buy a Diamond from Diamondsonweb.com ?

Jimbo34

 

[Regular Guy]

Neil & Jimbo...

Neil, yes, I am middle aged man. I get consumer reports. Perhaps I parse this a bit more than your average bear, but as Regular Guy, I''m actually seeking supports...which is part of why I''m writing...and so it doesn''t have to be a "do it yourself" thing. Would that it be...let Pricescope set up the system...so I can leave my silverware at home. Meanwhile, I''m finding myself motivated, yes, to be an architect. Why else would I write this? I do think for those of us who do not in fact want to service our local bank with a significant deposit so that we can get the cup of coffee there, we are willing to go to bankrate.com and drive across town for a better rate.

You say price is being danced around. Not sure what you mean. I actually say specifically:

"the diamonds you offer frequently come at some premium over those offered on the Quick Search, for example, as you know, and you understand that the difference is worth making. Making the effort to reach you as a vendor, the shopper will have understood that promise at the outset. Then again, deciding that difference is worth it...." Well, we could leave this to the jeweler, if you please. Are you really suggesting that? Why, then, will we go to you?

I have gone locally to the Inn at Little Washington...one of our finest eating establishments. Once anyway. But, this is not an experience, and we are not talking hundreds, but thousands of dollars.

Methinks you are possibly recoiling from your own days as a jeweler. Further, I think you''re not fully reflecting, and "biting the hand that fed you...." Consider, it''s you''ve traded in your cap, and you''re now generally in the business of servicing the kind of guy who actually doesn''t exactly trust his jeweler. In fact, I think Garry has said as much...that he might rather consider it rude to use an appraiser, having developed a relationship with his local jeweler.

Jimbo, would I use Diamondsonweb.com. Unless I am kidding myself here, it is my very point that I might. Heck, that''s sort of exactly what I did with my own diamond purchase. I see that utility as a "Quick Search" on Pricescope with more personality, some additional data, and some tricks up its sleeve...one of which is the drop ship to the jeweler. I do see that option as like the safety-net option you would like to have in your back pocket, when you''re going for maybe something ostensibly more....maybe an ACA option from White Flash, etc. Maybe by paying the premium for having it sent to a jeweler, you lose your cost advantage (not sure)...also, maybe as Neil says, when seen at the jeweler, since I am not the expert I would like to be, I will tend to be influenced by Mr. Jeweler''s advice.

Bottom line, however, is that we have no one but ourselves to ask at the end of the day, did I do well for my wife/wife to be....did I spend wisely. If this can be done in concert with a relationship with a trusted local jeweler, all the better. Otherwise....study, trust, but verify.

Why this particular itch is one I''ve continued to scratch since last summer when I made my purchase....I''m not entirely sure. That may be your point, Neil. An exit sign is surely just around the corner. Meanwhile, for those looking for shopping ideas, I seem to be motivated to try to make sense of that process.

 

[denverappraiser]

Ira,

I find your posts quite enlightening. It’s true that my position as a recovering goldsmith may be clouding my vision but it may also be adding some clarity.

I made no statement that the jeweler needed to be local. My key attribute was that they be trustworthy There are some fine jewelers that are accessed through the quicksearch bar and I’m not lobbying against them. Notice also that I omitted a critical piece of advice: ‘How do you find a jeweler you can trust?’(Not that I have a short answer to that.). I even agree with your point that I’m an odd choice of a person to make this whole argument. I regularly tell people to ‘buy the diamond, not the paper’ despite the fact that I sell paper and not diamonds! Am I an idiot for giving such advise? Perhaps.

My point in my last post was that there are cracks between the vendors and that this gets worse when more vendors are added to the mix. The usual assortment of vendors in a typical internet based ring purchase includes a diamond dealer or two, a couple of shipping companies, an appraiser, a mounting manufacturer, a setter, a credit card company, and at least one insurance company, all distributed over 3 or 4 states and possibly even countries. That’s up from one local jewelry store. When there was only one party involved, it was very clear who was responsible for what and the jeweler decided which dealer, which shipper and which setter to use as well as applying economic pressure on how much each gets paid for their portion. In the end, the jeweler is responsible for the entire product. This is not the case with the ala carte method. By shopping the diamond dealer, the mounting manufacturer and the setter as separate and unrelated transactions, you are assuming the responsibility for these things fitting together properly. This is what you are asking pricescope to do and they simply can’t do it. Independent appraisers can and do resolve most of this problem as well as some others but we charge for our services so it’s no longer the rock bottom price.

I think I serve my customers pretty well and I think my involvement causes the other vendors to also do a better job than they otherwise might have. In the end, my clients will generally see a better ring for a better price than if they chose a different approach. I make no claim that this is the only way to get a quality product or even that it’s the least expensive. It’s relatively inexpensive and it’s pretty low risk. I think it represents an excellent balance of the options available. I furthermore think you actually agree with this approach since this is basically what you recommend in your shopping advice and it’s the tactic you took, presumably successfully. I’m certainly not hinting that you should move on. Your posts are consistently interesting and insightful and I enjoy interacting with you.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[Jimbo34]

denverappraiser

Another question, maybe a little OT

When buying insurance for a Diamond Ring, do you get it insured for the cost of the ring or the appraised value of the ring?

Has any client of yours asked after being told the real value of the ring to put a lower price on the apprasial so the cost of insurance is lower or is that against the whole ethics of an apprasial? Kind of defeats the purpose right, of getting it insured for its true value incase it is lost or stolen....just wondered if this does happen?

Also what should we expect to pay for an apprasial and what should we recieve in terms of paper work for the ring. Pictures, etc. Just how through is this done?

Jimbo34

 

[denverappraiser]

Jimbo,

A properly done insurance replacement appraisal will reflect the insurance company’s estimated cost to replace the item with another of like kind and quality in the case of a loss. In the case of new purchases, this is usually fairly close to your cost. Appraisals that list a suggested retail price or some phrase with the same meaning should not be used for insurance purposes. If the ‘value’ of a new item is substantially different from your purchase price, you should be concerned that your appraiser might be answering a different question than the one you are asking. In such cases, either use the purchase documents or find a different appraiser. This type of document is actually pretty common. They are frequently included with the packing materials of a sale in order to give you the impression that you got a great bargain. Fortunately they are either free or very inexpensive. A properly done appraisal will cost between $75-$150 depending on what you want to know, where you are and how much time you require. Mine, and those of most of the other appraisers listed here are VERY through. I generally include full sarin data, multiple photographs, IS images, full cut analysis, full market as well as the usual weight, clarity, color and a value that is specific to your requirements and the market that is relevant to your situation. I also examine craftsmanship and condition issues on the remainder of the piece, not just the center diamond and include sufficient detail that the description so that it can be used as a purchase order in case of a need to replace the piece.

Neil Beaty
GG(GIA) ISA NAJA
Independet Appraisals in Denver

 

[Jimbo34]

Date: 4/6/2005 10:39:35 PM
Author: denverappraiser

. If the ‘value’ of a new item is substantially different from your purchase price, you should be concerned that your appraiser might be answering a different question than the one you are asking. In such cases, either use the purchase documents or find a different appraiser. This type of document is actually pretty common. They are frequently included with the packing materials of a sale in order to give you the impression that you got a great bargain.

Thanks for the info, but say you were to recieve the ring for free and have no idea of the purchase price, in that case you surely would want to insure if for the full apprasied value. That is correct right? If you wanted a repacement ring of the same qualtiy and value you would have to insure it that way. If your ring is appraised at $6000 your insurance company would give you $6000 right if your ring is lost or stolen. That is how it works right?
Not that we would lose it or want it stolen, we would just like some protection in the event anything would happen and want to replace it with something exactly like it. The setting we have is quite different and wouldn''t be that easy to replace, Lord knows we sure had a hard enough time putting it together. it''s a beautiful piece now though.


Jimbo34

 

[denverappraiser]

Jimbo34,

The behavior or the insurance company in the case of a loss will vary between the companies and even from contract to contract. In most cases, they will NOT pay you the face value of the contract in the case of a loss.

With most policies, the insurance company is agreeing to replace the lost property with substitute goods of ‘like kind and quality’ or some similar words to that effect. This means that when you file a claim, they will take the description of the insured property from the policy to one of their vendors and order up a replacement that meets this description. They will charge you the amount of your deductible and the company will pick up the balance. If you prefer, they will pay you in case in the amount that they would reasonably be expected to pay to accomplish the above. If you wish, you also usually have the opportunity to buy a completely different item where they contribute an amount equal to the above and you pay the balance.

Defining ‘like kind and quality’ is one of the reasons that they require you to provide an outside appraisal rather than doing it themselves. By submitting the appraisal to them, you are supplying that definition in the form of the description. The number at the bottom of the contract is the MAXIMUM liability for the company, not the minimum or even the most likely amount. The description is almost always what really defines their behavior, not the price. The premium, on the other hand, is usually a direct percentage of that maximum liability number. This trifling detail can cause you to pay two or three times as much in insurance premiums as might otherwise be required for complete coverage. Not surprisingly, the insurance companies are not the first in line to complain about this situation.

This is the reason I say it’s so important that you and the appraiser understand both the question and the answer. “What would Tiffany’s charge for a ring that looks sort of like this one?” is no the same question as “What should I expect a pawnshop to give me for it?” although they are both reasonable questions and could both be described as the value. ‘Appraised Value’ is not a fixed number. It will be different depending on the situation and the appraisal document itself should clearly explain what market is being described.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[valeria101]

How is the chain of command between buyer, diamond seller, ring maker, setter, and appraiser different cost-wise than the same operations would have been under one roof ?
From where I stand (far away that is), this separation of roles is no different than a cost breack down between different opperations in a one-stop jewelry shop.

It sounds like some segments of the chain are just not viable (or as economically attractive) on their own.

I might be wrong to say this, but it does seem that both jewelry fashion and the size of the jewelry industry were quite different without the diamond staple. Taking diamonds off the ground may result in some hystory repeating.

And even so, I can''t quite figure out why one-stop-shopping can''t take place over the net, without any direct personal interaction. Perhaps allot remains to be done to smooth the corners, but this does not sound impossible. This far, both integrating services online and arranging cost, profit and liability sharing between online and off, are in flux. If so, it is just a matter of which gets settled first.

IMO, matters can much faster be arranged between a few parties (sellers & professionals) than many (the public). So providing one-stop-shopping online might have the advantage after all. For the current practice to persist, it may be hard to disclose all those transaction risks to buyers and make intricate transaction models appealing.

It sounds easier to put Humpty together again online. . Not that the respective part is easy by all means. It may also mean that prices online and off get in line, and that may not be ok for everyone.

For example, Leonid''s attempt to list local jewelry shops could be seen as such an attempt. Probably done too early though - with more tension built up in the system ( = more business lost on one side or another), it may well start to work. With risks relatively low (are they ?), any change could be a rather long process. Now that I am thinking, making some sort of explicit liability transfer (say, setting a joint self-insurance scheme for participating jewelers at the least, and funding a common insurance policy at most) may give further credibility to that kind of scheme - only things are not "hot" enough yet.

Please disregard the crazy post if annoying. The thread was just plain irresistible !

 

[Regular Guy]

Ana, Neil, appreciate both your thoughts.

Maybe it would be helpful to re-focus...helping to keep our "eyes on the prize."

Ana, although it's possible you can deconstruct the buying process effectively, which Neil raised as a not unreasonable concern, what may be helpful to point to -- and stay with -- is the driver for this activity...

Although we have learned, in the buying process, to value our Intelligence/information, and reasonable desire for Control and Economy (ICE), we want to make this just not an etherial process...we seek Satisfaction in the Local buying experience...we want our SLICE.

Another way to say the same thing...we have a natural drive, I think, to:

want to engage local expertise appropriately...

and so we seek ways to do this.

Neil, you pointed to both my a) shopping experience and b) written (see my by-line) protocol as examples of how this process can work successfully. Well...interesting point. However, the resources available to me last summer, with an internet vendor I could drive to, and shop at, are no longer available for the DC Metro area. And technically competent appraiser assistance was not then nor is it available yet, that I know of, in this DC metropolitan area. In my protocol, Location #1, I suggest 4 succeedingly less ideal, but workable strategies for shopping. And, that last one, though indeed possibly workable, does really contain no local element. Frankly, to my knowledge, there are very few areas in the US that afford any options besides I D, leaving you in charge (always the case, true), left to master both your telephonic skills, and that Idealscope thingy.

So, once this is appreciated...creative solutions can be sought. The DiamondsOnWeb Jeweler partner is one idea. Another one just occured to me....

Videography. What if our featured Appraisers set up web cams, of some quality. Neil, we've talked before of SNL, and they feature one there, in a dorm! Larger businesses actually employ videoconferencing with some frequency. So...if this is thought to be an actually helpful "distance shrinker," something in the middle as a solution might be "massaged."

Somehow, keeping in mind that we not only value ICE, but we are drawn to our SLICE...could be helpful.

Cheers,

 

[valeria101]

Date: 4/7/2005 11:39:20 AM
Author: Regular Guy


Ana, although it''s possible you can deconstruct the buying process effectively, which Neil raised as a not unreasonable concern, what may be helpful to point to -- and stay with -- is the driver for this activity...

The driver could not have been buyers... the initiative to sell jewelery on the net did not come by constitutional decree. Someone thought to cut the old way of doing business to the barest bones ("deconstruct"), and reinvent it.

The deconstruction just favored the previous profit center of the business model (aparently that was selling diamonds) and left the rest less attractive. Too bad diamond & ring are complementary goods - so there is no way to just ditch the less profitable part for good.

Also, the separation left some risks discovered, out in the open, plain to see and out there to pay for without much choice of insurance products - as you guys say.

 

[NoonersMom]

Thanks for initiating this discussion Ira. (Sorry I just found this thread yesterday, but didn''t have time to respond). I don''t believe I communicated thoroughly as we have local vendors here, but a)they are overpriced b) they don''t do the craftsmanship that Leon Mege does. So while a local jeweler would be great for a one stop provider, the price here is severely high for the stone itself. (One store wanted $7500 for a 1.07 H SI1 that scored a 3.5 HCA...then tried to tell me that the price was right....I don''t think so!) Thus the reason I am going with the net.

At a minimum, I would just love to find a knowledgeable, certified appraiser here with the technology to confirm the stone & allow me to see the stone before sending it to the out of state jeweler. However, when looking through the local listings, 9/10 are affiliated with a jewelry store. Dave Atlas was kind enough to PM me a person that might be able to recommend someone in the area, but that is the extend of it. My hope was that at a very minimum, PS could expand/broaded the contacts available to provide recommended appraisers in potentially 80-90% of the states, not just the current list.

As a consumer who would like to confirm the information gleamed from this site, I think this would be a valuable persuit & worth the time for this community. Especially since some, if not most, don''t live in an area with an appraiser with the proper instruments to test and confirm the stone.

Food for thought.

ETA - I like the idea of doing a webcast or virtual meeting. If it''s not to expensive, that would be a fantastic tool for out of towners wanting to meet with Dave & other highly recommended appraisers.

 

[pricescope]

I just spoke to Bill Pearlman and he explained that they have Jewelers Mutual insurance that covers every piece of the jewelry brought into their store. Therefore, if they take a diamond they haven''t sold for mounting they take full responsibility for it.

Before doing the job they inspect the diamond for any durability problems. However, if they take the job it would be their responsibility for the safety of the stone.

So it is possible for a jeweler to conduct the business and do the mounting job without putting all the risk on the customers even if the jeweler hasn''t sold the diamond.

 

[Richard Sherwood]

Date: 5/18/2005 4:14:47 PM
Author: Pricescope
I just spoke to Bill Pearlman and he explained that they have Jewelers Mutual insurance that covers every piece of the jewelry brought into their store. Therefore, if they take a diamond they haven''t sold for mounting they take full responsibility for it.


Before doing the job they inspect the diamond for any durability problems. However, if they take the job it would be their responsibility for the safety of the stone.


So it is possible for a jeweler to conduct the business and do the mounting job without putting all the risk on the customers even if the jeweler hasn''t sold the diamond.

I''m surprised to hear this. I''ll call Jeweler''s Mutual to verify that they cover the diamond setting process. They didn''t use to.

 

[Islandia]

I think this idea would have been a great help for me in my diamond hunt. However, I am not sure that the value add would be enough to justify a much higher price point for a service like this. In my mind, if someone wants the comfort of having all these steps so that they can ensure the diamond is 100% what they think it is, they would probably pay the premium to have it all done locally. With the advent of the internet, many local B&Ms are starting to offer somewhat more competitive prices and the thing they really have going for them is that they are there in person so you can return to them and they can sell you the diamond and have you go get it appraised then return to have it set.

The advantage of shopping on the internet is mainly the price and selection, and if an internet shopper wanted the same level of guarantee as they would at the local level, he or she would probably go through the extra hoops to get what legwork needs to be done. I would also be very worried about collusion if an internet vendor had a "preferred" appraiser whom I was suppose to automatically send the diamond to in order to have it verified.

Just the thoughts of someone totally outside the industry who first learned the difference between carat, karat, kerat, and carrot less than a month ago.

 

[JMIC]

Steve is correct. Jewelers Mutual’s policy insuring a jewelry business covers customers’ goods for damage or loss due to theft and fire, among other causes. However, if a jeweler damages an item while working on it, there is no coverage under our commercial policies. We exclude coverage for damage to property being worked on because the risk of loss depends so much on the skill level of the jeweler. It is difficult to assess each jeweler’s risk and charge an adequate insurance premium for breakage.

Tom Adelmann
Jewelers Mutual Insurance Company
[email protected]

 

[mepearl53]

Hi,

The Jewelers Mutual policy we have covers the jewelry and loose goods that are in our store. We have been around long enough and are capatilized to the extent that we cover our work period. If we or our designers damage a item we cover the pieces. Since we do no work here in the store we are comfortable with the level of craftmenship our designers deliver. On the other hand if someone brings us a diamond, colored stone, watch, or a piece of jewelry we are not comfortable working with we just say sorry we can''t help them with the piece. I think most good B&M jewelers offer this guarentee of reliable service and skill in handling of people''s jewelry.

Concerning the diamonds that are being purchased over the net I see it as a problem for those stores unwilling to adjust to the 21st century. I''ve been doing this in my families business going on 34 years. In the "old days" If a person brought in a family piece either jewelry or a diamond to be remounted we did it and did not question where the piece came from. Today I feel like many of you that the B&M store is far to defensive with this new type of diamond or jewelry coming across their counters from the internet. Nothing has really changed here except the trust level. Today''s customers are demanding a fair price given the amount of information available to them. Is the pure play internet dealer any better priced than the traditional B&M? For those with their head in the sand, yes! For those looking down from the mountain, no. I have seen many B&M store get down in the trenches and figure out a way to blend the two avenues of competition. You have to change the way you have been thinking but I always thought change was a good thing (unless you live in Michigan and hate the winters

For the B&M stores that are fighting change they better re-think their way of doing business. Many will be gone in the next 5 years but a new business model will emerge. The customer is still the customer. Some are unreasonable both on the net and in the stores. If you don''t have the level of confidence to take in someone else''s diamonds send them to someone who can help them. If you chase them to the internet by being defensive you loose them and I for one refuse to take this approach. The amazing thing I have found out in the 7 years since I jumped into the net is how nice these people are. I can''t offer the technical expertise of some of the computer literate younger folks on the net but my eye can see and understand beauty and design as well as most and this is what we sell. I graduated from GIA in 1974 and this equipment was not imagined then. If this is what it takes to sell the contempory customer I guess I can get my IT staff to learn it. It''s about change. Give them what they need. Maybe my granddaughter Ms Emma will learn how to run the busness using vitural reality? If this is what it takes to change you do it or you die! Our business is thriving on the net and the competition from online vendors is no different than in the "old days" when 15 jewelry stores lined our 4 block business area. You get creative!

Leonid, please consider a spell check option! I''d be willing to pay extra for it