Mail Bag: Gemstone Prices

More faceting questions from the Mail Bag:

Recently I have had some interest from a local jeweler in 
purchasing some of my faceting work. To date I have only sold 
a few stones to friends/family and I was using the pricing 
guides which were available on Jeff Graham's website for pricing. 

Do you mind if I ask how you price your stones? 

And do you use a discounted (wholesale) price when selling the 
same stone to a jeweler vs. a retail customer?

I hope it is OK to ask your advice on this, and of course would 
greatly appreciate any guidance or help you would suggest.

Thanks, D.

Hi, D.

Thanks for writing!

I’m glad to hear you’re getting around to selling stones past your friends and family. That’s a great step toward a more sustainable faceting practice – and toward much more exciting rough, too!

As far as Jeff’s pricing ideas, I don’t think I’d use that kind of source. It’s not an industry standard, and it’s not likely to be updated again.

You are very welcome to ask how I price. I use The Guide, published by Gemworld. Their publication costs some $205 per year (up from around $140 when I started my subscription). They use a variety of research to determine what’s happening in the actual market, and their publication is the de-facto professional appraiser’s standard – at least in America.

The publication also includes a number of articles about events and trends in the market that are affecting prices – like new finds or, new treatment or synthetic processes. If you want to be informed, this is one of those things you’ve got to have as part of the toolkit.

The trick with the Guide is that it’s in text format, so you’ve got to learn to do color grading. And, given that the human brain is notoriously bad at color memory, that can be a bit of a challenge. But, grading is just one of those things we need to be able to do if we’re going to be in the game. It’s a great excuse to go to Tucson and really look over the high-end goods to see just where you are. I also recommend looking in every jewelry store you pass – look at the color, GRADE IT, price it – and then go look at your guide and see what you think their markup is. Practice, practice, practice…

I have, for most of my cutting career had a keystone system in place, discounting to the jeweler and charging a closer-to-retail price to the retail customer. That difference has shrunk to the point I’m soon not going to be investing the time to maintain a two-tier pricing structure – though colleagues and jewelers will be able to enjoy a small discount from the quoted price. This will allow them to sell my goods and still make a percentage that will be more like a commission than a full mark-up.

The issue of pricing is VITAL to your enjoyment and satisfaction because it’s vital to your sustainability. What is more, it’s vital to your customer’s actual enjoyment of their custom jewelry pieces.

Pricing for the trade is very different from pricing for the retail customer. The psychology is very different – for them and for you. Be happy with what you charge – and DO NOT LET YOURSELF CARE how much they mark it up. People who let themselves be bothered by what the jeweler made on their stone are in for an unhappy time…

Price your goods so you make enough to get paid AND replace the rough to go around again. Then, you’re being sustainable, and everyone is going to be happy.

I hope this stuff is useful, and hope that you keep in touch. Thanks again for writing with the great faceting questions. When you have something else, just ask!!