Are we reaching an equilibrium between resale and retail?

[Circe]

This is going to seem fairly circuitous, but hear me out ... the head of the Science Fiction Writers Association, John Scalzi, just had a post on his website about people asking writers to give them free product - articles, blurbs, op-eds, you name it, using arguments ranging from exposure to "fairness" and his response came down to (I'm not being crude, I'm quoting, and it seems to be becoming a meme) "F*ck you, pay me!"

Links: http://whatever.scalzi.com/2012/12/09/a-note-to-you-should-you-be-thinking-of-asking-me-to-write-for-you-for-free/ and the follow-up, http://whatever.scalzi.com/2012/12/10/a-little-more-re-writing-for-free/

I think the cycle of all writers being expected to write for free because some chose to - to get their foot in the door, because nobody would pay them in the first place, whatever - is actually pretty similar to what's happening in other quadrants of society, not least of all the jewelry industry. eBay et al. were initially great for giving private individuals a way to sell their goods, but they have sucked for the industry as a whole. Private sellers don't tend to have the same resources as businesses, and they don't really seem to have strategies, per se ... so a lot more of them are willing to bargain, just to get whatever it is out the door. Businesses, on the other hand, hate to lose money, and generally won't haggle. Or at least they didn't use to, until it became the standard - and now, one way or another, they seem to have to, because the private sellers are dictating market prices more directly than they used to, not by refusing to buy, but by undercutting prices when they sell. I think it might be leveling out some as private sellers realize what they have is in hot demand and refuse to sell low. What do you guys think*

*Redirected from another thread because I realized I was hijacking.

 

[denverappraiser]

Re: Are we reaching an equilibrium between resale and retail

What a great question.

Consumers buy from where they do because they think it’s in their enlightened best interest to do so. Nearly everyone prefers to buy from a dealer. Why? That’s the value add by the dealer and it’s how they can charge above rock bottom prices. What’s that value-add? Here’s a few:

Selection. Most dealers have more than one item for sale. Most individuals don’t. This is increasingly more important the more picky the shopper is inclined to be.
Trust. Diamonds are a highly trust based business and there’s a lot to be said for buying from a dealer that you can believe will give you the straight story and sound advice. Ebay and craigslist, in particular, are famous for problems with this.
Shopping experience. Fancy stores are a pleasant place to shop. Ebay not so much. No one goes to Tiffany thinking that’s a cheap place to buy stuff but they keep on going there. People like to buy antique stuff from fancy auctions and put up with stiff fees to do it.
Returns, financing, packaging etc. Not gemological properties but important nonetheless.
Habit. Tradition.
Warranties.
‘New’ merchandise.
Ignorance. Some folks just don't understand the question. This cuts both ways. Some land on ebay because they believe it will get them a 'deal' when they would have done far better shopping elsewhere.

There are plenty more but that’s a dabbling. Not everyone values those things the same, and some don’t value them at all but these sorts of things are the reason to buy from a professional merchant even though they are charging more than some ebay seller who claims to have the same thing.

I rather specifically disagree that ebay sellers of secondhand or even new merchandise are driving the market. ‘Taint so any more than pawn shops or garage sales have driven the market in the past or that closeout houses like Ross drive the market for clothing. You CAN occasionally get a smoking deal at the thrift store and deal hunters do routinely look there but they are not a significant presence in the jewelry industry and the most certainly don’t drive the market.

As you point out, certain businesses haggle all the time but that’s part of the strategy you mention.

 

[denverappraiser]

Re: Are we reaching an equilibrium between resale and retail

I certainly have sympathy for writers, but not all that much. SOME writers are pretty well paid and the path that led there normally included some pretty crappy gigs. JK Rawling and Steven King come to mind. The vast majority aren't paid at all and never will be. There’s a lot of professions like that, I dare say including jewelry appraisals. Fortunately for me and Ms. Rawling, there seem to be enough customers out there that perceive the difference between a professional product and an amateur one that we both can make a living. She and Mr. King are doing better than me at the moment but that’s the way it goes. Also fortunately for those of us in this sort of business, the amateurs who produce high quality work product tend to turn into professionals because they too want to be paid. I give out free advice all the time but I’m completely unapologetic that I do charge and that I’m far from the cheapest source. This seems to work out well for me even though there are hundreds of amateurs here dispensing advice and elsewhere and pros in every jewelry store who will do it for 'free'. I HAVE had other professionals express irritation at what I say here but, for the most part, I think my participation has increased the business of professional appraisals and the number of clients who are willing to pay for a service that superficially is available for free rather than reduced it. People ask me all the time if I'll just give them a quick ballpark value on something and although I'm usually more polite in my response, the gestalt is the same. Pay me.

 

[Circe]

Re: Are we reaching an equilibrium between resale and retail

What a great question.

Consumers buy from where they do because they think it’s in their enlightened best interest to do so. Nearly everyone prefers to buy from a dealer. Why? That’s the value add by the dealer and it’s how they can charge above rock bottom prices. What’s that value-add? Here’s a few:

Selection. Most dealers have more than one item for sale. Most individuals don’t. This is increasingly more important the more picky the shopper is inclined to be.
Trust. Diamonds are a highly trust based business and there’s a lot to be said for buying from a dealer that you can believe will give you the straight story and sound advice. Ebay and craigslist, in particular, are famous for problems with this.
Shopping experience. Fancy stores are a pleasant place to shop. Ebay not so much. No one goes to Tiffany thinking that’s a cheap place to buy stuff but they keep on going there. People like to buy antique stuff from fancy auctions and put up with stiff fees to do it.
Returns, financing, packaging etc. Not gemological properties but important nonetheless.
Habit. Tradition.
Warranties.
‘New’ merchandise.
Ignorance. Some folks just don't understand the question. This cuts both ways. Some land on ebay because they believe it will get them a 'deal' when they would have done far better shopping elsewhere.

There are plenty more but that’s a dabbling. Not everyone values those things the same, and some don’t value them at all but these sorts of things are the reason to buy from a professional merchant even though they are charging more than some ebay seller who claims to have the same thing.

I rather specifically disagree that ebay sellers of secondhand or even new merchandise are driving the market. ‘Taint so any more than pawn shops or garage sales have driven the market in the past or that closeout houses like Ross drive the market for clothing. You CAN occasionally get a smoking deal at the thrift store and deal hunters do routinely look there but they are not a significant presence in the jewelry industry and the most certainly don’t drive the market.

As you point out, certain businesses haggle all the time but that’s part of the strategy you mention.

Ah - my bad, I should have defined my field of discussion a little more narrowly. The whole thing arose in the context of Demelza's OEC eternity pricing thread, and it got me thinking about the vintage jewelry market. I definitely don't think that Tiffany's and the like - or even Zale's - are affected to any noticable degree!

But I am seeing a lot of PS hobbyists talking about what it's like to sell on DiamondBistro and LoupeTroupe bemoaning how it's impossible to sell without having to field a hundred lowball offers, and I'm seeing a lot more Best Offer or BIN (with the behind-the-scenes option of contacting the seller and having the price lowered to something agreeable) on eBay. On another thread, Yssie mentioned something about how the market had changed dramatically, even over the course of the last few months: I'm wondering if that's something that is going to trickle down further, evening out the prices a bit. I really appreciate your perspective, and would love to hear your thoughts - as well as those of some of our resident vintage mavens, pro and otherwise?

 

[Circe]

Re: Are we reaching an equilibrium between resale and retail

I certainly have sympathy for writers, but not all that much. SOME writers are pretty well paid and the path that led there normally included some pretty crappy gigs. JK Rawling and Steven King come to mind. The vast majority aren't paid at all and never will be. There’s a lot of professions like that, I dare say including jewelry appraisals. Fortunately for me and Ms. Rawling, there seem to be enough customers out there that perceive the difference between a professional product and an amateur one that we both can make a living. She and Mr. King are doing better than me at the moment but that’s the way it goes. Also fortunately for those of us in this sort of business, the amateurs who produce high quality work product tend to turn into professionals because they too want to be paid. I give out free advice all the time but I’m completely unapologetic that I do charge and that I’m far from the cheapest source. This seems to work out well for me even though there are hundreds of amateurs here dispensing advice and elsewhere and pros in every jewelry store who will do it for 'free'. I HAVE had other professionals express irritation at what I say here but, for the most part, I think my participation has increased the business of professional appraisals and the number of clients who are willing to pay for a service that superficially is available for free rather than reduced it. People ask me all the time if I'll just give them a quick ballpark value on something and although I'm usually more polite in my response, the gestalt is the same. Pay me.

I have enough frustrated writer friends who have watched their market be devalued by technological advances and a more business-oriented industry to be pretty sympathetic to them: for every big author who's gotten the benefit of a huge marketing machine, there are a thousand who've gotten into a vicious cycle of unpaid labor begetting unpaid labor, so I'm glad to see the strategy discouraged by the pros. Including you - if the bolded weren't too long, I'd be quoting it in my sig! More people should have this kind of clear-eyed confidence in the value of their labor.

 

[denverappraiser]

Re: Are we reaching an equilibrium between resale and retail

Private sellers almost always have unrealistic expectations when they decide to sell things. They get this from an assortment of reasons, some of them good some of them less so.

Some examples:
They paid a lot. The person who sold it to them told them it was worth more than they paid. Everything supposedly goes up in value over time so it must be worth more now.

Some jeweler or appraiser told them it was worth a lot and they either didn’t know how much of a difference the market makes or they choose to ignore it. The ‘appraisal’ wasn’t critically considered for credibility and whether or not it correctly answered the correct questions.

They saw an ad for something that they counted as comparable that was asking a lot. If someone else can ask a lot, it seems reasonable that they should too.

They saw or heard about a transaction for something they count as comparable that actually got a lot. If someone else could get a lot it seems reasonable that they can too.

They are asking a lot under the premise that they can always come down but it’s difficult to go up.

Seller driven venues like DiamondBistro are chock full of things that I would call overpriced or more specifically, marketed in a way that they’re unlikely to realize their asking price. Better ads might do better. Lower prices might do better. A different seller might do better. Different merchandise might do better. It may be all of these things, it may be none. It doesn’t really matter because there is no feedback process and a lot of sellers aren’t interested in a reality check anyway. The cost of advertising is low so people just throw it out there. If they get it, great. If not, they try something else or just keep relisting it hoping for a lucky break. The difference between ebay offers and ebay ‘completed auctions’ is a very interesting study. Jewelry, especially expensive jewelry, fails to result in a sale upwards of 95% of the time. Unfortunately, ebay has reduced their time window where you can look at completed auctions and it’s hard to sort for only the ones that actually resulted in a sale but it’s possible to do it with a bit of effort. What’s actually selling? Who is getting those sales? How much did they get? What sorts of advertising work the best and which consistently fail?

It’s frustrating for buyers too. If you see something you want that you perceive as overpriced, the choices are to ignore it or to make an offer. If the seller sees it as a ‘lowball’ offer, so what? The worst they can say is no. What they’re looking for is a bargain and offers are free. If they need to bid on a hundred things before they actually get one or just give up, nothing has been lost but time. At best the bids go DOWN over this process because if they’re going to have to work that hard at it they need to land what they count as a steal to be worth the effort.

 

[Rockdiamond]

Re: Are we reaching an equilibrium between resale and retail

Great thread Circe!
This is a trend I have noticed as well.
eBay, in particular is so darn huge that it's possible for two things of equal value to go for drastically different amounts on the same day.
It's possible to find some re-salable stones there for sure.
It's also a tangles web of no reserve listings that taint the entire pool which in some ways helps both the charlatans of the diamond business- but also can be a fertile ground if one is looking for antique diamonds in particular.
This might be what you're referring to Circe.
Without a doubt this community, for example, has empowered a lot of buyers to "go for it" with private sellers.
If you know what you're looking for and have a lot of time- and are willing to take a risk- you can find a bargain.
This is a respectable market segment for sure- but in other areas of diamonds specifically, eBay seems less productive.
If you want a large well cut diamond for example, eBay does not seem like a great place for consumers
That's a totally different market segment going through change IMO- but different change

 

[diamonds-are-friends]

Re: Are we reaching an equilibrium between resale and retail

most of the ebay diamond stuff will probably never get sold by a well established business mainly because of its quality.

 

[smitcompton]

Re: Are we reaching an equilibrium between resale and retail

Hi,

I was just thinking about this subject the last few days, but in relation to paintings. I am an art lover. I go to art shows, sometimes show my own work, and belong to an art league. In my younger days, I had a few paintings, but nothing either very good or valuable. The art work at shows or galleries were too expensive for me.

So, in the past 2 yrs, I found art on ebay. The first thing I look for,(besides using my eyes) is to find out if the painter makes a living doing it(this makes them professionals.). I have purchased paintings for less than I ever dreamed from the artist directly. Amateurs in the real world are asking far more than I see on ebay. Yes, as Neil suggested, the very high priced paintings don't sell, but you can find very nice things on ebay.

I continue to buy paintings, much to the dismay of my son, and made a decision not to buy diamonds, as the better value for me is the paintings. I do go in and offer a lower amount and am sitting here stunned at my latest purchase, which was delivered Friday.
Its that good.

I know my comment isn't about jewelry, but I don't think the sales are being made in the galleries or art shows as they are on ebay.
There are true bargains there.(Oh, much true junk as well) The hardest category to evaluate and not get a bargain is in the 2000.00 range.

Annette