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Welcome to the Gilt Trips podcast. I'm your host, Kendra Lockhart. As a goldsmith and

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gemologist, I'll be speaking 24 carat on all things jewelry, metals, and gems. Join

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me plus a few friends to demystify both materials and designs as your private jeweler. Let's

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tune in on these topics and get golden. Some of the reasons consumers put their jewelry

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into the secondary market. They need their assets liquidated. They have no errors or

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next generation. They have unplanned financial problems. Or they are simply done enjoying

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their items. Where do you take jewelry or watches when it's time to let it go? Which

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style of reselling fits your needs and comfort levels? Let's learn all about entering the

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secondary market with your precious possessions. Chapter timestamps are in the show notes.

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Let's break down each area of the industry known as pre-owned goods. I'm starting with

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auction because it gets creatively interpreted in plenty of movies or TV shows, so there

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is cultural familiarity. The foundation of auction, which comes from the Latin word for

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I increase, is based on bids. Goods are listed and start with an opening bid. The buying

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participants are called bidders and the facilitator of the electronic or verbal bids is called

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the auctioneer. Auctioning is not a new concept. As early as 500 BC in ancient Babylon, women

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for marriage purposes were auctioned. The most beautiful ones were part of a forward auction,

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meaning one opportunity to many buyers. The least attractive females were part of a reverse

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auction or one buyer and multiple opportunities presented. Not all origin stories of business

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models are pretty, are they? But we've come a long way, both with auctions and women,

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of course. The Greeks would go on to auction slaves and the Romans would liquidate confiscated

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materials. Jumping ahead to medieval times, in auctions a candle would burn down and signal

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the closing and therefore winning bid. Sometimes the winner would be determined by the height

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of the flame. Good old Middle Ages superstitions. Or a foot race could be substituted. You know

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some healthy competition. Again, auctions have come a long way. Now in the 17th century,

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auctions were happening for artwork at taverns and coffee houses. The first known auction

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house on record was the Stockholm auction house in Sweden, recorded in 1674. The precedent

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setting auction house, Sotheby's, was established in London in 1744. Their first sale was quote,

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noteworthy and collectible, scarce and valuable books. And the most famous house would be

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formed 15 years later, also in the capital of England, known as Christie's. Several

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other European companies, and later ones in America would be created, between the years

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of 1681 and 1826. By the end of the century of these auction houses, lots and items were

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being sold off daily. Meanwhile in America, goods seized in the Civil War were auctioned

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by both sides, facilitated by the colonel of the winning army division. A common secondary

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title for auctioneer in some locations is still colonel. The Confederate states were

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hosting large tobacco leaf sales, and not surprisingly, slaves before and up until

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the end of the Civil War. In modern times, the rise of the internet has expanded the

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scope of this presence in the secondary market. In the 1990s, this not only opened up the

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audience and reach of traditional houses, having sales to people being online, and therefore,

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not close proximity to the sale. But it also birthed a digital counterpart to a brick and

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mortar company, which we all know as eBay. I'll say more about the distinguishing elements

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of that brand later in the episode. By 2008, the auction industry swelled to a whopping

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$268.4 billion dollar annual model, with the most growth in real estate, agricultural,

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and machinery or equipment. This was helping tip the scales around the stigma of used goods,

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as America was entering a strong recession on top of an unprecedented presidential election.

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Let's discuss the modern version of an auction house and the potential experiences of buyers.

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Is it driven by increasing or decreasing bids? Is it time sensitive? Is it a single shot,

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meaning sealed envelopes of your ideal price they all get submitted at once, and the highest

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bidder is the winner on a one take basis? So what is the life cycle of a new seller and

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bidder in the world of auctioning? Because I am in Chicago, I turned to Hinman auctions.

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Let's start with valuing property. Here, an owner can get a complimentary estimate via

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images sent digitally with certain parameters, meaning multiple pictures, detailed and accurate

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descriptions, and documented markings, stampings, or hallmarks on fine jewelry and watches.

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If you are an individual, appraisal services help with gift tax, estate tax, insurance,

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and charitable contributions. Knowing what you have is the first step for both sides.

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But this serves additional purposes. It helps trust and estate executors or attorneys. It

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assists restoration contractors to potentially improve the value. And it complies with the

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USPAP, Uniform Standards of Professional Appraisal Practice. And the IRS should there be an audit

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regarding property and settlement situations. As for entering the selling arena, there are

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notifications and previews or browsing online. And now it's time to get in the game. You

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register. Making an account means you are able to bid online, in person, by telephone,

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or absentee. An auctioneer sees it all. There is a bidding increment based on base price.

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And remember, a buyer pays and so does the seller after hammer, meaning final call.

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I reached out to the senior specialist at Hinman auctions in Chicago. Karina Hammer states

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that with an auction, your items have the potential to sell higher than a set figure

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given for consignment value or by immediate check payment, particularly with unusual or

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rare pieces or jewelry that is signed, meaning it has a maker's mark. As for the ideal client

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for auctions, she says it is likely someone who may have jewelry that they are looking

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to sell that is not modern or mass produced pieces. Antique or vintage and in excellent

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condition is a rare find. Colored gemstones without treatment and natural diamonds of

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high quality are also beneficial in an auction setting to achieve the highest price for a

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customer. She continues trends do come and go. Bold and gold, particularly with gold

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being so elevated right now price wise, are gaining very high hammer prices at auction.

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Our deco pieces with old cut diamonds are also sought after. Younger clientele are looking

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for unique cuts that are no longer produced. Signed pieces by the larger jewelry houses,

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especially with unique stones or limited edition craftsmanship, have the potential to hammer

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well above their high estimate at auction. Regarding the opportunity in auction overselling

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or consigning, Karina answered, one of the positive aspects of auction is that the estimate

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you can sign your item for will not be lowered. You are also able to set a reserve at the

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low at or over $1,000. Your proceeds of the sale are paid by wire transfer or check 35

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days after the auction. She continues, I would assist a prospective seller to choose auction

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by highlighting the potential for achieving higher sale prices through competitive bidding.

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Auctions offer a fast and transparent selling process, often attracting a global audience

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of serious buyers. Additionally, I would explain the benefits of a definite sale day and the

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excitement generated by live auction events. Karina also states a live auction can sometimes

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create bidding wars over a less exciting piece. It just so happens to be a piece that

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two bidders have their eye on. If you can sign your jewelry, for example, at a jewelry

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store, there is no guarantee it will sell in one week or one year or even more. If you

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choose to immediately sell your jewelry for a set cash amount, you are not opening it

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up to the prospective buyers. That may compete for new ownership of the piece.

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Let's touch on eBay, which first began as Auction Web in 1995 as a hobby for a computer

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programmer. As traffic grew, the founder had to update his site and renamed it after his

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consulting practice, Echo Bay Technology Group. Last year, eBay reported revenue of over $10

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billion. Now it hasn't been the prettiest past for this company. Antitrust violations required

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forms of payment that were a conflict of interest, counterfeit sales issues, which I mentioned

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a specific instance in the Tiffany's episode, insensitive memorabilia, and the non-authentication

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process left for compromised experiences. Aside from these challenges, the culture of

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auctioning may be unfamiliar to sellers, so it can lack consistency. Fortunately, some

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of the fine jewelry and watch items now do require physical inspection before a bidding

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and sale as possible. This likely stemmed from the verdict to payout to LVMH, over $43

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million, for facilitating counterfeit handbag, perfume, and accessories sales. The earlier

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claim that eBay did not need to take responsibility for inauthentic items, even while profiting,

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as argued in the Tiffany's lawsuit, did not hold up in a second situation. eBay has also

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had to monitor shill bidding, where you get your friends to drive up the pricing. However,

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if you are feeling lucky and willing to enter the arena, the cost to sell is attractive.

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Items have a 10-15% deduction for successful bids to buyers, and boast about 135 million

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active users. Moving on to in-person, as well as digital platform sales, let's cover the

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difference of professionally versus personally conducted sales. On websites like Depop or

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Poshmark, called Peer2Peer or P2P, you sell your items without experts or authenticating.

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Depop allows you to direct message buyers and sellers, whereas on Poshmark, there is the

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opportunity to bid on high-demand items. Depop has a competitive deduction of 10% plus transaction

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fees and 42 million users, while Poshmark has a flat $2.95 commission on items under

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$15 or 20% for anything over, with a following of 80 million members. Some feel that the

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low touch is not personal, or in models like Fashionfile, the upfront payment for product

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means higher working capital and lower seller payout. It's important to know your priorities

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and expectations. If you prefer in-person and want to get away from being behind a computer

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screen, then estate or garage sales may be the best version of buying for you. An estate

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sale is run by a professional company. The home is usually staged with different rooms

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representing various departments, such as clothing, treasures, media, furniture, and

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kitchenware. The event is promoted in their channels to existing audiences, both privately

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and publicly. A typical payout from the seller is 30-40% deductions. Buyers simply pay sale

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tax. Items are not always authenticated, but do have some background information or internet

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lookups to give potential context. So the benefit is, you may discover an underpriced

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or unrecognized find. As for a garage sale, it's personal. Maybe it's circulated to

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friends, family, and neighbors. Or it can be posted on marketing sites, like estatesales.net.

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The commission or deduction is eliminated. Both parties find value in the selling and

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buying without third parties directly to each other. Can you find a steal that went unrecognized?

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Absolutely. Most garage sales don't test metal, and therefore a ring can get mislabeled

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as costume or fashion when it is genuine and has precious elements. That is how Harry Winston,

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profited from recognizing a two-carat emerald in a pawn shop, bought it for 25 cents, and

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sold it two days later for $800. More on that episode dedicated to him.

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Another selling option is what we call over the counter, or OTC. This means buying and

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selling at registered jewelry stores. I interviewed the president of Wolf Diamond Jewelers in

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Crown Point, Indiana, just outside of Chicago. Colin gave the following insight on the benefits

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of a buyout. He says that if items qualify, it is an instant transaction. The cash is

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immediate and it is conducted in a realistic forum. The sale is guaranteed if the condition

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and sell-through fit a store's timing and market. As for being the buyer, the repurposing

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aspect is attractive. A purchase can be reinvented or made into multiple inventory pieces without

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having to call a vendor or generate invoices. He mentions the time-saving aspect of having

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smaller goods on hand, especially for repairs, versus having to source less significant elements

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to restore or complete a project. Colin considers his ideal client for buyout being someone

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who has inherited a sizable amount and is unsure of its value. The process at Wolf Diamond

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Jewelers is identifying, sorting, offering prospects to keep once the seller knows what

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they have, providing a value range, and calculating a price based on current market numbers. There

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is no commission taken and expectations on the experience are realistic. He says, quote,

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depending on the situation and what you need, it is a cash offer, no gray area, and completely

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straightforward, unquote. This is his secret to high levels of customer trust. As for

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unseen chance in OTC dealings, Colin reveals that sellers are presented ideas to reinvent

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pieces they wish to keep. Old gold can get credited towards the restyling of sellers'

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gems, or even simpler manufacturing steps, like sizing a ring up or down and fixing any

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broken elements. One of his favorite reactions in Buying Over the Counter is when a seller

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walks in thinking he or she only has low value or modest total worth. Colin is not looking

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to take advantage of an owner's unawareness, but rather witness their joy, relief, and

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often excitement upon learning they possess genuine jewelry. With the aid of gemological

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tools and microscopes, he demonstrates how the authenticity was determined and walks

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the seller through a transparent formula for arriving at an offer on the pieces.

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And finally, we address the opportunity in consignment. The word has French origins that

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translate to handover or transmit. With this type of reselling, the seller gives permission

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to a third party to conduct a transaction in a certain period of time for a percentage

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of the buyer's total. The owner maintains rights and retentions of their goods until

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a realized sale, or when time is up and that opportunity is abandoned. Frequently, prices

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are reduced to promote the sale or incentivize the completion of the goods getting purchased.

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The risk is on the seller so that the agent doesn't need to front the capital or invest

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in inventory. Unlike a final sale in the previous models of secondary markets, there can be

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a window for return of goods and that would affect the time of payout. The retailer or

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selling agent does not have to purchase the items, sets the discounting policy, and creates

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the timeline and limit regarding how long they are willing to give the items the chance

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to sell. Some businesses of this variety will conduct a trade for your merchandise, often

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at a more attractive rate than a straight sale. When I talked to the CEO of the RealReal,

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John Coral, he provided the following answers. My question, how does the expense of authentication

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add value to the sale? He spoke to trust, confidence, and reliability. Quote, at the

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RealReal, we invest significantly in our authentication process for numerous reasons.

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We also know verified authentication adds value to the items on our site and boost

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trust within our community. Items are met with a robust team of expert authenticators

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combined with cutting edge AI technology, which gives buyers confidence in their purchases

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and allows sellers a seamless consignment experience. This investment in authenticity sets us apart

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from competitors and reinforces our commitment to providing a safe and reliable marketplace

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for both buyers and sellers. Regarding the ideal client for consignment, the benefit

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for natural resources with the secondary market was underlined. Quote, the ideal client for

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consigning with the RealReal is someone who values convenience, expertise, and the ability

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to maximize the return on their luxury items. Additionally, environmentally conscious consumers

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who appreciate the sustainable aspect of resale find consigning with us particularly appealing.

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And lastly, when advising a prospective seller to choose consigning before other possibilities,

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John's response was, quote, first, our platform offers a broader reach and higher visibility

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to a global audience of 36 million members, ensuring items sell more quickly and often

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at better prices than local pawn shops or auctions. Second, we handle all aspects of

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the selling process, from professional photography and detailed listings to pricing expertise

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and customer service, providing a hassle-free experience. Additionally, our reputation for

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rigorous authentication builds by our trust, which translates into higher sale values.

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Lastly, consigning with us supports the sustainable fashion movement, appealing to those who want

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to make environmentally conscious choices. The goal of this episode was to expose you

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to the world of pre-owned fine jewelry and watches. Globally, the secondary watches market

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alone is expected to top $26.5 billion last year. The jewelry sector is projected to hit

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$1.3 billion US dollars by 2028. The stigma of a used item has been replaced with a savvy

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shopper-to-seller dynamic that understands intrinsic value and the absence of a big overhead

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or the primary round of retail markup. Maybe it's time for you to find your favorite piece

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outside of a branded store, showroom, or typical luxury sale.

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Thank you for listening and learning with me. I would love you to share this project

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with people finding rare beauty in today's world and throughout our times. Until the

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next episode, keep your own stories sparkling.