Protocol on selling a stone on consignment

[hajimemeshite]

Hi guys...i was wondering how one should go about selling a stone on consignment...

- do i just leave the stone with the jeweler? does he need to write me a receipt? is there a standard contract that he should provide me?

- should i ask for a deposit up front?

- do i need to have it insured? or is the jeweler responsible for the stone while it''s in his possession?

- do i take the risk of the jeweler declaring bankruptcy?

Thanks!

 

[Upgradable]

When I''ve left a piece for consignment I''ve always gotten a copy of a Memo, which is a 2 copy slip that says From: Uppy, To: Jeweler, Description: describe piece, Terms: price you''d like to get along with a statement of the % of the sale the jeweler keeps.

 

[WinkHPD]

Date: 6/19/2010 11:52:56 AM
Author: Uppy
When I''ve left a piece for consignment I''ve always gotten a copy of a Memo, which is a 2 copy slip that says From: Uppy, To: Jeweler, Description: describe piece, Terms: price you''d like to get along with a statement of the % of the sale the jeweler keeps.

That is one way to do it.

I take a slightly different approach with my clients. Uppy''s way is good too, mine is just different.

I figure out what I would have to pay for that diamond, when and if I needed it, and quote that price to my client. I tell them that when and if I sell it this is the number I would pay. I also tell them I might sell it in six hours or six years and that I will pay nothing if it does not sell. Anod of course there is paper work that states all of that clearly.

If they want to sell it now I will offer 1/2 of what I would pay when and if I sell it and I advise them not to take that price.

I suspect that most of us work somewhere around Uppy''s pattern or mine, but I doubt you will EVER find someone willing to give you a deposit. Yes, we are responsible for your diamond while it is in our posession and YES! YOU DO NEED TO BE WORRIED IF THE JEWELER WERE TO SUDDENLY DECLARE BANKRUPTCY!!! I do believe you can protect your position by filing a UCC form, but you would need to confer with your attorney to know that for sure. If you do nothing and your jeweler declares bankruptcy you become just another unsecured creditor, ie out of luck.

Wink

 

[oldminer]

Date: 6/19/2010 11:26:42 AM
Author:hajimemeshite
Hi guys...i was wondering how one should go about selling a stone on consignment...

- do i just leave the stone with the jeweler? does he need to write me a receipt? is there a standard contract that he should provide me?

- should i ask for a deposit up front?

- do i need to have it insured? or is the jeweler responsible for the stone while it''s in his possession?

- do i take the risk of the jeweler declaring bankruptcy?

Thanks!

Do not just "leave" anything. Get a detailed, written reciept which lists the most complete sort of descrition of the item and/or the diamond. There is no standard contract so make usre you have whatever deal you accept also in written form and signed by the owner, not some lesser employee.

You will not get any money up front.

Your own insurance will not provide primary covererage when the item is with a jeweler, but they should have insurance. Get this included in their agreement with you that it is fully insured and by what company and policy number. You own insurance might provide secondary coverage, but you should not leave anything with an uninsured retailer or dealer.

You will not have an issue with bankrupcty due to feferal protection of consumers leaving goods on consignment. Dealers do have big problems with consignment, which we call memorandum unless UCC forms are correctly filed, but my understanding is that consumer consigned items are protected from forfeiture in bankrupcty.

The biggest problem is wasting your time with unrealistic goals on your part. Trying to recuop an amount that can''t be supported by market demand will just take time and effort, but not resort in a sale. A retailer may offer an unrealistic consignment deal in order to placate you and soften you up until reality finally sets in and you become more willing to accept a realistic price. Every once in a while a consignment deal works out, but most just delay the reality of selling for what something is worth in a free market.

You should determine if the consignee is credit worthy, too. Do they pay their bills? Have they been established a long period of time and enjoy a solid reputation? Are they relatively unknown and new? Do you really want to trust them or is the offer of more money the motivation and possibly causing you to use poor judgment? Only you can decide.

GOOD LUCK!

 

[denverappraiser]

Consumers with consigned goods are protected in a bankruptcy but if they sell it and don’t pay their bill they are not so I would disagree. Yes, you should be concerned about bankruptcy and if you feel there is a serious risk you shouldn’t do the deal.

You are going into business with the jeweler, at least for this particular deal, and you should choose your partners with care. Do they display things in a way that seems to result in sales? Do they pay their bills? Do they communicate clearly both about what they will do and what they are expecting of you? Are they clear about their fees? A bit of research into the particular dealer you are considering will go a long way towards avoiding headaches in the future.

No, you shouldn''t get a deposit. In fact, there may be some up front fees if they need to get the stone(s) examined by a lab, if the piece needs repair work before it can be sold, etc.

By all means, get a receipt and a contract.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver