I’ve seen it twice. Once in the early ‘80s, and then again starting in 2007. What I’m talking about is the out of control gold prices that set off a mad panic and creates a gold rush.
Through the last 4 or 5 years, I didn’t participate in it. I know, I know, I lost out on millions and millions of dollars - or so I’m told. But honestly, I don’t think I’m really worse off for sitting on the sidelines.
Here’s my thinking:
For as long as I’ve been in the jewelry industry, I’ve never bought jewelry off the street. I’ve always had a personal issue against the practice. Usually, when a customer comes into a jewelry store, it’s one of the happiest times in their life. It’s a birthday, an anniversary, someone’s about to get engaged, someone just got engaged and needs their new ring (that I sold) sized, or someone’s about to get married and shopping for wedding bands.
But, there’s another side too. Sometimes people come into a jewelry store at the worst time of their life. That person that they thought they were going to spend the rest of their life with just showed his or her true colors and “happily ever after” is just a slow moving train wreck circling a bottomless drain.
Sometimes it’s the loss of a job and they need money, and it’s the house or the ring. But, you know what I’ve discovered from decades of observing from afar (since I’ve never really participated)? Whatever you pay them for their jewelry usually doesn’t fix their problem. Yes, it might buy them a month or so, but the underlying problem still exists. Now, they’ve still got the problem, but not that precious piece of jewelry that’s been handed down from generation to generation.
Of course, I’ve got hundreds of friends and readers that think I’m dead wrong about this. They tell me that the person was going to sell it no matter what, so why shouldn’t they buy it and take advantage of the situation since it was getting sold regardless.
Here’s my thinking:
When someone is selling their jewelry, usually their life is coming apart at the seams for any number of reasons. And I don’t care what you pay them; they are always going to think you ripped them off. They bought the ring for $10,000 from you 4 years ago and now you’re offering them $3,200 (on a good day). Now, you’re showing your hand. You just let them know that when you gave them “the deal of the century,” you made $6,800 on the sale. WHAT? Now they know our little jewelry industry secret… we make 400% to 500% on every sale!
Now, you and I know that’s not true, but those people out there in the world we call our customers don’t know the little ins and outs of our industry. Chances are you paid $7,800 for the diamond at the time, but now we’re in a recession and the price of everything has fallen - but they don’t know that. And worse, now they don’t trust you.
Something I’ve also learned from being on the sidelines is that not everyone stays down. Some people were born poor and will always be poor no matter what the economy and they will always use pawn shops as a bank. But, most people are not like that. Just because someone is going through a very hard time right now, doesn’t mean it’s going to last forever. They will get through this and bounce back and eventually replace all of the jewelry they had to sell. And, many of these people will come to me because I didn’t rip them off when they were down. I can’t tell you the number of people that have said horrible things to me about other jewelers that I know personally, and will never go back to them for this very reason.
Is every customer going to feel this way? Of course not. But how many customers are you willing to lose by becoming a pawn shop as opposed to a jewelry store? My decision was to not lose a single one. My thought process has always been to stay on the happy side of the business, not the sad. If a customer is going to feel betrayed by their trusted long time jeweler, then they are going to switch jewelers when their situation turns around. Pick me! Pick me!
Now, am I being a hypocrite because I have a consignment store that sells people’s unwanted jewelry? I don’t think so because I’m pretty selective about what I take. If they need the money, then I don’t get involved. But, if it’s some jewelry that was given to them by an ex-boyfriend or husband and it’s been in their jewelry box for years, and they’re in no hurry to sell it, then I’ll sell it for them.
Case in point; a longtime customer was married when she was 18 years old to an older man with lots of money. It was a short marriage, and when it was over she ended up with lots of pieces of nice jewelry. Fifteen years later, she’s been married for 10 years with 3 kids and a great life. Her current husband knows she was married before, but her kids don’t. She’s never going to give the jewelry to her children because it was given to her by someone they don’t even know existed. It was just sitting in her jewelry box doing nothing, so she put it on consignment. I sold several pieces and she used the money to take her kids to Disneyland. Sweet. She had no emotional ties to the pieces and didn’t really need the money, but she wasn’t going to just give them away to a pawn shop.
So, herein lies one of the big problems I’ve had with whole “become a pawn shop” mentality that’s swept the jewelry industry over the last several years. Customers come to a jewelry store instead of a pawn shop because they think they’re going to get lots more money for their jewelry. When in reality, most jewelry stores don’t pay any more than a pawn shop. After a while, customers started wising up and shopping at several different places to see who would give them the best deal, and you know what? At least here in Nashville, most everyone (pawn shops/jewelry stores/estate buyers/etc.) paid about the same thing, give or take a buck or two.
So, once again, where did that $6,800 dollars go that they paid you when you sold them the ring? How do you explain the difference?
I spoke to several jewelers while writing this article and some agreed with me, but most thought I was nuts. But, one jeweler in West Virginia told me that because she always encouraged her customers to get a couple of bids to really see what kind of money they could get for their jewelry, she was always a few dollars higher. She said that she’s seen several of these people back in her store as new customers because she treated them fairly! So that blows my theory to hell, huh?
I guess to wrap it up, in my opinion, when someone is forced to sell their jewelry to pay the bills, they are never going to feel they got what it was worth. So if they are going to hate someone, hate someone other than me. There is an old saying that the decisions you make today, you’re going to have to live with during the ensuing years. So over the last several years, I elected to sit out the gold rush and be where I am today, richer or poorer.
Who’s with me on this and who thinks I’m a nut case? Write me and let me know what you think.