How much of a markup is acceptable on loose stones?

[pokerface]

I have had a lot of luck in scoring a couple nice opalescent sapphires directly from IG vendors located in Vietnam and Sri Lanka. I can see for a fact that more well-known US-based vendors are buying from the same sources and marking up the stone to triple or quadruple the price. A few months ago, I JUST missed out on a stone that was sold to a jeweler - I know, because the vendor sent me a screenshot (scrubbed of identifying details) showing the stone, and the price, and that it was sold to someone buying large quantities of gems for resale. For months, I have been routinely stalking IG and different websites looking for the stone to reappear, because it's my favorite color, and I wanted it just badly enough to consider buying it at a high markup. Last night, I finally found it relisted at more than SIX TIMES the original price. Not only that, but this vendor will not let you buy a loose stone (you have to have to set) and therefore, I would have to spend a minimum of ELEVEN TIMES the original price to buy the stone. I understand that it's perfectly appropriate for a consumer-facing jeweler to mark up products, but this just seems outrageous to me. There's no way I am going to purchase the stone now - but I bet someone else will. What do you guys think - is there anything inherently wrong about a vendor trying to list a stone for what seems like the highest conceivable price a customer might be willing to pay or should good faith/fair dealing usually limit a vendor's profit percentage? I really don't know, and I'm biased about this particular situation, but it seems like this is a fast way for a vendor to achieve a reputation as being overpriced.

 

[icy_jade]

Ummm… that’s why I have commented before that some vendors that PS-ers recommend are really overpriced.

 

[pokerface]

Like I said, I am aware of markups, but this crosses into outrageous territory for me. I don't think either vendor is PS-recommended. There's also a big difference to me if a vendor only sells to industry buyers, because then there's no point at which a consumer actually has access to the lower price. That is not the case here. It's also different to feel like you could get a similar stone for less money rather than know that the vendor is getting a 600-1100% minimum profit.

 

[dk168]

I know where a bench is sourcing some of his CSs, and am watching to see how much mark-up he is adding to the stones.

DK

 

[T L]

Like I said, I am aware of markups, but this crosses into outrageous territory for me. I don't think either vendor is PS-recommended. There's also a big difference to me if a vendor only sells to industry buyers, because then there's no point at which a consumer actually has access to the lower price. That is not the case here. It's also different to feel like you could get a similar stone for less money rather than know that the vendor is getting a 600-1100% minimum profit.

The list you refer to has some dealers that mark up quite a bit, so don’t go by it for that reason.

 

[Avondale]

What do you guys think - is there anything inherently wrong about a vendor trying to list a stone for what seems like the highest conceivable price a customer might be willing to pay or should good faith/fair dealing usually limit a vendor's profit percentage?

The former is the core concept of uncontrolled capitalism. The unshakeable belief that something is worth the most someone else is willing to pay for it and not a cent less.

It's quite obvious where uncontrolled capitalism leads. And yes, it is absolutely outrageous.

I do believe there needs to be a proper amount of good faith and fairness. Otherwise we're crossing into greed category. I'm not giving my money to someone who's simply greedy for it. I'm giving it to someone who's earned it with their professionalism.

 

[T L]

There are some gems that have prices all over the place, spessartite garnet is an example, and I’ve seen them marked up like crazy, and some, not so much, depending on what the dealer got it for. Actually most garnet varieties falling this category quite a bit. I have more of a problem with fact netaphors names being used to justify high prices on stones that would ordinarily be far less pricey.

 

[Mjay]

Funny you mentioned this because I was considering a stone from a highly recommended PS vendor and when researching comps I accidentally found that had purchased it from a Sri Lankan IG vendor. The markup wasn’t anything as extreme as what you are describing so I actually considered purchasing anyways but passed due to other factors. Still I found it interesting. I definitely would love to see a list of recommended IG vendors. Also OP if you’re willing to share; I would love to know where you purchased your sapphires. I’m not well versed in IG vendors.

 

[Gloria27]

I don't buy unless it's a score for me. I do it for the hunt, for the thrill, for the win.

 

[marymm]

No, IMO there is nothing inherently wrong about a vendor trying to list a stone for what seems like the highest conceivable price a customer might be willing to pay.

If someone doesn't want to educate themself about an intended purchase and/or doesn't perform due diligence/cost comparisons, that's on them.

I also don't think huge mark-ups reflect on good faith and fair dealing necessarily -- in my view, good faith and fair dealing have more to do with published prices, descriptions and images that fairly represent the item for sale, no hidden extra costs, respectful and responsive communication, actual-cost-based-shipping, and reasonable return policies.

I'm a consumer who likes, even enjoys, doing her homework before buying expensive things, things meant to be durable, things important to me and my life. But other people are more spontaneous in their purchasing, or less interested in research, or just don't care about cost (regardless of their own finances or the perceived market fairness of the price).

Just my two cents.

 

[fredflintstone]

I have had a lot of luck in scoring a couple nice opalescent sapphires directly from IG vendors located in Vietnam and Sri Lanka. I can see for a fact that more well-known US-based vendors are buying from the same sources and marking up the stone to triple or quadruple the price. A few months ago, I JUST missed out on a stone that was sold to a jeweler - I know, because the vendor sent me a screenshot (scrubbed of identifying details) showing the stone, and the price, and that it was sold to someone buying large quantities of gems for resale. For months, I have been routinely stalking IG and different websites looking for the stone to reappear, because it's my favorite color, and I wanted it just badly enough to consider buying it at a high markup. Last night, I finally found it relisted at more than SIX TIMES the original price. Not only that, but this vendor will not let you buy a loose stone (you have to have to set) and therefore, I would have to spend a minimum of ELEVEN TIMES the original price to buy the stone. I understand that it's perfectly appropriate for a consumer-facing jeweler to mark up products, but this just seems outrageous to me. There's no way I am going to purchase the stone now - but I bet someone else will. What do you guys think - is there anything inherently wrong about a vendor trying to list a stone for what seems like the highest conceivable price a customer might be willing to pay or should good faith/fair dealing usually limit a vendor's profit percentage? I really don't know, and I'm biased about this particular situation, but it seems like this is a fast way for a vendor to achieve a reputation as being overpriced.

Sounds like this vendor is selling full retail. It is common for full retail to mark up colored stones three to seven times the wholesale price, which includes internet prices from source dealers. I have seen as much as a ten times mark up. That is retail.

I see people here paying crazy prices for stones all the time, but that is their choice. As long as they are happy.

 

[E H]

Let the invisible hand do their job. In this era of social media, we can cut most of the middle man and buy closer to the source.

The only problem only occur at the higher end of the market. Most high gem/jewelry dealers has establish their network for ages. So, these dealers usually get the first chance to examine most of the finest rough gem.

imagine you are looking for a loupe clean (literally loupe clean, no inclusion with exception of "invisible" rutile silk), unheated, 5ct+, real pigeon blood ruby with SWUV fluo as strong as the finest burmese. You can ask 99% dealers in the internet or regular mid-high gem dealers in srilanka n bangkok. You will be very very lucky if you find just one. Even if you find one, the dealer 99% of the time must be getting the stone from the high gem dealer.

Basically, i am saying that in some case you are not paying "mark up", but you are paying "premium" to gain access to the dealers' network

 

[fredflintstone]

Let the invisible hand do their job. In this era of social media, we can cut most of the middle man and buy closer to the source.

The only problem only occur at the higher end of the market. Most high gem/jewelry dealers has establish their network for ages. So, these dealers usually get the first chance to examine most of the finest rough gem.

imagine you are looking for a loupe clean (literally loupe clean, no inclusion with exception of "invisible" rutile silk), unheated, 5ct+, real pigeon blood ruby with SWUV fluo as strong as the finest burmese. You can ask 99% dealers in the internet or regular mid-high gem dealers in srilanka n bangkok. You will be very very lucky if you find just one. Even if you find one, the dealer 99% of the time must be getting the stone from the high gem dealer.

Basically, i am saying that in some case you are not paying "mark up", but you are paying "premium" to gain access to the dealers' network

Most people here cannot afford the finest 5 carat Ruby and I would not suggest them trying to buy it from an overseas dealer they know nothing about or even a little about.

What you say about cutting out middlemen is true for price but there is one huge drawback to your plan. Refunds and misrepresentation which leads to...refunds. Even packages sent with no stone or stones.

I was a dealer for over four decades, in that time I ran into all sorts of problems. One big problem is in Sri Lanka, India, Pakistan, Vietnam, and to a certain extent Thailand, there can be several people trying to sale the same stone, brothers, sisters, other family members, friends. This can lead to problems when you get a stone you want to send back. They have already spent the money and it can be next to impossible to get a refund. Now, I’m not saying this is true of all oversea (source dealers) but the odds are high enough to warrant great caution. So, make sure they invoice you through PayPal, but even that is not 100% foolproof, as dealers in Sri Lanka and Ethiopia cannot use PayPal due to the government policies and use PayPal accounts of others who live in another country that accepts PayPal, normally Thailand. But if that person does not have the money to refund the buyer, there is problems. Big problems.

So, buyer beware, the cheapest route is not always the best.

 

[LilAlex]

Whose markup and what is "overpriced"? All these things change hands so many times; even when you think you are buying "close to the source," you often are not. It's like the upscale estate sales that are professionally run -- and salted with random crap from their warehouse. I don't trust IG randos.

Almost everything I have bought from an online vendor, sight-unseen, has been disappointing. I often keep it because it was not expensive and the return is an incredible hassle and I actually like the piece -- just not as much as I liked the photos or the description. Not a rip-off, per se; just not a joy to behold. So it is worth a premium (mark-up) for me to have things vetted by a trusted third party (e.g., broker) who can accurately describe an item in relation to my previously-shared preferences. Those things I am typically very happy with -- and some have wowed me more than the broker's words or honest photos. This service is usually restricted to a major international nexus for gem commerce (like NY in the US) -- because the broker needs hands-on access to a lot of product from many vendors.

I used to have a B&M place where they (well, one savvy saleswoman there) would call me if a fascinating Art Deco colored-stone piece came in. I no longer have that kind of access in my town and, except in the very largest metro areas, there are typically only one or two shops that might see a steady turnover in vintage/antique colored-stone pieces.

Vis-a-vis six-fold and eleven-fold markups cited above, I think you'd only see that with inexpensive gems. It's easy to envision that just the effort of photographing and describing and answering email after email and being cheerful about it is hundreds of dollars. Some vendors could probably never sell anything for less than $250 or $500 -- whether they paid $10 or $400.

 

[kenny]

Buyers are free to avoid or patronize a seller with high prices.
Some sellers, like luxury brands, convince some buyers that their prices are worth it.

Don't like their prices? Don't buy.

There is no governmental entity, or deity, controlling to ensure prices are "fair" or "right".
Buyers can do their homework, and make their decisions.

That's the free market.

 

[fredflintstone]

Whose markup and what is "overpriced"? All these things change hands so many times; even when you think you are buying "close to the source," you often are not. It's like the upscale estate sales that are professionally run -- and salted with random crap from their warehouse. I don't trust IG randos.

Almost everything I have bought from an online vendor, sight-unseen, has been disappointing. I often keep it because it was not expensive and the return is an incredible hassle and I actually like the piece -- just not as much as I liked the photos or the description. Not a rip-off, per se; just not a joy to behold. So it is worth a premium (mark-up) for me to have things vetted by a trusted third party (e.g., broker) who can accurately describe an item in relation to my previously-shared preferences. Those things I am typically very happy with -- and some have wowed me more than the broker's words or honest photos. This service is usually restricted to a major international nexus for gem commerce (like NY in the US) -- because the broker needs hands-on access to a lot of product from many vendors.

I used to have a B&M place where they (well, one savvy saleswoman there) would call me if a fascinating Art Deco colored-stone piece came in. I no longer have that kind of access in my town and, except in the very largest metro areas, there are typically only one or two shops that might see a steady turnover in vintage/antique colored-stone pieces.

Vis-a-vis six-fold and eleven-fold markups cited above, I think you'd only see that with inexpensive gems. It's easy to envision that just the effort of photographing and describing and answering email after email and being cheerful about it is hundreds of dollars. Some vendors could probably never sell anything for less than $250 or $500 -- whether they paid $10 or $400.

"Vis-a-vis six-fold and eleven-fold markups cited above, I think you'd only see that with inexpensive gems. It's easy to envision that just the effort of photographing and describing and answering email after email and being cheerful about it is hundreds of dollars. Some vendors could probably never sell anything for less than $250 or $500 -- whether they paid $10 or $400."

Most of my customers were B and M or full blown retail jewelry designers that sold on the net. Some even just other gemstone dealers. Some well known here. Three to seven times mark up on all stones is the norm and even more.

I tell you the truth. You can chose to believe it or not. I have no reason to lie. I really don't.

 

[PrecisionGem]

I know buying rough and cutting it, most cutters feel they are doing good if you can double what you paid for the rough. Of course very inexpensive material is a different story, but if you buy a rough stone for $300 and can get $500 or $600 after cutting that's doing very well. Many times when buying rough you are buying parcels, and you have to figure a percentage, maybe 10% to 20% of the parcel you will never cut, then there are those stones in the parcel that you will cut just to recover what you paid for them, and then there are the ones you can actually make some money on.
This is why most cutters have a lots of stones, but not much money.

 

[fredflintstone]

I know buying rough and cutting it, most cutters feel they are doing good if you can double what you paid for the rough. Of course very inexpensive material is a different story, but if you buy a rough stone for $300 and can get $500 or $600 after cutting that's doing very well. Many times when buying rough you are buying parcels, and you have to figure a percentage, maybe 10% to 20% of the parcel you will never cut, then there are those stones in the parcel that you will cut just to recover what you paid for them, and then there are the ones you can actually make some money on.
This is why most cutters have a lots of stones, but not much money.

I bought and sold cut stones. Some one buy one, some in parcels.

Let me say I was not pointing a finger at you, I did not sale rough, but what I wrote above is true of retail pricing.

You have good prices, always have, but many charge many times what they pay for cut stones, and rough too.

 

[smitcompton]

Hi,

I have been looking at different gemstones to see todays values vs when I purchased them.. I see some sellers that I think may be over-priced, but many who seem to be reasonably priced. What I think, for this discussion , is gouging. I always heard that 5 x selling price would be the norm over what was paid. That doesn't sound bad to me. Perhaps I have heard it too often and am used to it now.

I have also seen, what I refer to is psychological conditioning in the opposite direction. Once you know what someone paid, you estimate what you consider fair. It is not very objective,

I have a purple spinel from Vietnam= purchased 15 yrs ago. (Gene-when gemology on line was going strong). It is 1,81 ctw. I paid 32.00. It has gone up a lot. But now that you know that I paid 32.00 for it, I'll bet no-one will be willing to pay even near the going rate. Its funny I just decided a few hours ago I will not mention what I paid for my gemstones. I have another spinel-padparasda Sp. color 2.38 cts. from Hong Kong It was almost 3 ctw. It was wonky so I had Jerry Newman recut. I paid 46.00 for it. All spinel has gone up, not just the red or pink.
There are times I consider it gouging. There are times I think some sellers are good photographers. There are some deals still out there.

Gene has always been fair on prices. Not cheap and not expensive. Gene, once I saw your car, I knew you could be fair on gem prices. Others may not be so lucky .

Annette

 

[JewelledEscalators]

I know buying rough and cutting it, most cutters feel they are doing good if you can double what you paid for the rough. Of course very inexpensive material is a different story, but if you buy a rough stone for $300 and can get $500 or $600 after cutting that's doing very well. Many times when buying rough you are buying parcels, and you have to figure a percentage, maybe 10% to 20% of the parcel you will never cut, then there are those stones in the parcel that you will cut just to recover what you paid for them, and then there are the ones you can actually make some money on.
This is why most cutters have a lots of stones, but not much money.

Well it could be worse. You could be one of those jade rock buyers who buy rocks in the hope that when they crack it open there's something in there worth selling.

Quite fascinating really, like buying very expensive Kinder eggs

 

[dk168]

I know where a bench is sourcing some of his CSs, and am watching to see how much mark-up he is adding to the stones.

DK

Follow up on my last post.

I believe the mark up for one particular stone that appeared on the lapidary artist's FB page earlier this morning is now "Sold" and is now available at the bench for nearly double the price!!!

As far as I am aware, that bench does not accept CSs sourced outside to set, and I have yet to use them.

DK

 

[Inbloom]

I once saw a sapphire offered at a flash sale via instagram stories for $1200. I didn’t have the funds to buy at the time. It was later sold to a local jeweler I follow on Insta. I noticed it while scrolling through their loose gem inventory. Price? $3000 something! And guess what, a couple bought and used it for their engagement ring. This store does not set stones they did not source either. So they mark up and people do pay. It’s just painful when you know what the original price was!

 

[PrecisionGem]

I once saw a sapphire offered at a flash sale via instagram stories for $1200. I didn’t have the funds to buy at the time. It was later sold to a local jeweler I follow on Insta. I noticed it while scrolling through their loose gem inventory. Price? $3000 something! And guess what, a couple bought and used it for their engagement ring. This store does not set stones they did not source either. So they mark up and people do pay. It’s just painful when you know what the original price was!

That's a pretty typical markup for a jeweler. I sell stones often to jewelers, and they all typically mark them up 2 to 3x. They are of course in business to try to make money, just like every other retailer.
What do you think the mark up is on a bottle of water? I recently bought a bottle in the Atlanta Airport and paid $3.15 for it. I bet there was much more than a 3x mark up on the water.

 

[Inbloom]

That's a pretty typical markup for a jeweler. I sell stones often to jewelers, and they all typically mark them up 2 to 3x. They are of course in business to try to make money, just like every other retailer.
What do you think the mark up is on a bottle of water? I recently bought a bottle in the Atlanta Airport and paid $3.15 for it. I bet there was much more than a 3x mark up on the water.

I understand there’s markups. I expect them. Especially at airports when there aren’t other options. It’s business. Like I said, just painful to know what the original price was and what the new cost is + out of reach price-wise. At the end of the day, timing and available funds is everything. After that, it’s what the consumer is willing to pay after considering all the facts and options.

 

[dk168]

In UK, when I was doing pop up kitchen events, a chef friend informed me the mark-up should 3.5x the cost to produce the food.

The worse food and drink one to mind, at a motorway service station, self-service tea counter, one tea bag per mug + milk, no refill, 3.00 GBP!!!

DK

 

[dk168]

I bring an empty drink bottle with me nowadays to fill up for free once after I have gone through security at airports etc...

DK

 

[Inbloom]

I bring an empty drink bottle with me nowadays to fill up for free once after I have gone through security at airports etc...

DK

This is the way. Many airports have water filling stations with filtered water now.

 

[Rfisher]

In UK, when I was doing pop up kitchen events, a chef friend informed me the mark-up should 3.5x the cost to produce the food.



DK

I assume you mean 3.5x what the ingredient cost was?

After you take into consideration everything it cost you to do the pop up plus time planning, transportation, all overheads and your hands on labor
What was your “profit” per hour you put into this?
If you care to share - I just think it’s interesting.
Whether it’s hobby or charity or business

 

[dk168]

I assume you mean 3.5x what the ingredient cost was?

After you take into consideration everything it cost you to do the pop up plus time planning, transportation, all overheads and your hands on labor
What was your “profit” per hour you put into this?

Also energy cost and cost of making them too!

I did it for the love of cooking, not to make a profit, as I was losing out on ingredients alone, let alone energy and the cost of making the food!

DK

 

[Rfisher]

Also energy cost and cost of making them too!

I did it for the love of cooking, not to make a profit, as I was losing out on ingredients alone, let alone energy and the cost of making the food!

DK

Ok - I thought you took the 3.5x ingredients seriously.
Some do.

And I shouldn’t have said profit per hour. I meant what are you earning/paying yourself for your labor per hour.