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FOL

Tanzanite - What a bargain?

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FOL    10
FOL

I have recently taken to purchasing Tanzanite from BoB, and mostly purchase those that come with a GISA or some other certificate. Having purchased in access of 8 both from BoB and EBay, I have to ask the question WHY...

 

Why would someone sell at item that is valued at R113,000.00 for a mere R11,000.00?

Is there any logic behind this business decision? Or are the products being purchased on BoB either of a lower quality and thus not ideally suited for customer resale or has the items come from some criminal activity?

 

I mean, I love the idea of purchasing a product at a 10th of its value, but come one, at some point I need to understand how this is done. Look at Krugerrand-coins for instance, they are always trading eaither at the current price of an ounce of gold or slightly higher (so you not actually getting a bargain for this item).

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mellowred    10
mellowred

Hi FOL, welcome to the forum.

 

If I were purchasing something and had a good idea of it's true value I'd also be suspicious of someone trying to sell at a tenth of it's value.

 

Perhaps the seller has started low in the hope that bids will pour in(?) Or he/she is just misrepresenting his/her product.

 

If you are referring to a specific item, it is always a good thing to include a link.

 

Regards

Mandy

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RISadler    10
RISadler

The value of gold is fixed. I've never seen gemstones listed on an exchange. So my guess is the value is what someone will you for it. :wondering:

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Lukeness    10
Lukeness

The values shown are estimated retail values, at full list price. These are established by using various pricing guides as well as by direct comparison to similar items for sale at retail outlets, both locally and internationally. Consider also that many retail outlets run almost perpetual 'discounts' off their retail prices and the fact that we can only base the values on what they provide as their full prices.

 

The retail outlet adds the final mark-up after a series of sometimes staggering mark-ups by various 'middle men' as the stone makes it from the miner, to rough dealers, to cutting houses, to bulk dealers, specialist dealers, wholesale importers and jewellery store suppliers before reaching the retailer. As you can see this supply chain can mean that a gemstone travels through many conduits before reaching the retailer and the successive mark-ups can add up to staggering amounts.

Some of the gem sellers on BoB are jumping across and skipping half or more of these levels and therefore able to offer much more competitive prices. Especially considering that the standard wholesale price is +- 30% of retail.

 

A lot of the sellers on BoB do in fact also supply dealers who wholesale the stones to retailers.

 

That said, if the stone was sold on auction then the final price was decided by the highest bidder, if the seller made a loss then it is his or hers to deal with.

 

I hope this helps.

Edited by Lukeness

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MsPlod    10
MsPlod

Part of the issue as far as I can see comes from carat values and exchange rates. If one uses one of the international websites for "retail" gems as a basis for valuation then the values come in as dollars. These gems are also overpriced in the main and the dollar/carat value is usually based on a perfect (i.e. flawless) and impeccably cut gem. These dollar values are then translated directly into the rand exchange rate which is inaccurate.

 

In reality, highly unlikely that these gems indicated as being worth R115,000 and selling for R2,500 are actually valued as such. There is a bit of a trend amongst certain of the gem dealers on BoB (sadly condoned - or at least not prohibited outright - by BoB) to advertise these auctions at the totally inflated prices.

 

Depending on the dealer - my usual take is to check a few of my favourite international websites for the retail gem prices, divide by the exchange "ratio" and subtract the postage. So - if a gem is valued at R7,500 (by one of these dealers) - To me that means it might actually be worth R1,000 - but only if it is flawless and perfectly cut. The value drops off fairly sharply for lesser clarities (except for one or two gem types). On such a gem - if it is supposedly very slightly included (VS) I might bid no more than R100 depending on the cut and the actual gem type. But that is me - and I have run out of energy to keep lobbying for BoB to stop these ridiculous estimates from being used as value estimates...

 

OK - off my soapbox now... bye! - quietly wanders off into the distance whistling... "Another one bites the dust..."

 

BLUSH - Lukeness, you got in there before me! Your explanation takes precedence! Trust the expert (Lukeness) FOL, not the novice (me)

Edited by MsPlod

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Lukeness    10
Lukeness

lol

MsPlod's approach is sensible.

The advantage of a gem with a report is that you don't have to rely on the sellers description or pictures to know the quality of the gemstones to get a realistic comparison.

Also, remember that most internet 'retailers' are doing exactly what bid or buy sellers are doing and can offer lower prices than brick and mortar jewellery shops for the above reason and also the obvious reduction in overheads by not needing additional expenses such as rent, staff etc etc.

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Cali Craft and Gems    10
Cali Craft and Gems

As a gem seller, when I first got into this trade I thought I could never afford certain "rare" gemstones - especially Tanzanite. But after doing some homework / research, I was shocked to find how "cheap" these gems actually were by comparison to what a jeweller would charge for the exact same item!

 

Following up on what Lukeness stated regarding all the "middle men" of the trade - a good example being a transaction I did locally around this time last year. I bought a variety of Sapphires from various sources and was asked to take them to a local distributor. I let him "set" the prices he was going to offer me and these were already higher than what I'd originally paid. He in turn took these gems to his customer (a well-known PE jeweller), put on his mark-ups and sold them for even more! Then the customer comes along, and the jeweller charges them even more - sometimes a ridiculous mark-up especially if the gem has to be set into a final piece!

 

So basically something that truly only cost a few hundred rands at most to start with, costs the customer literally thousands when he finally gets it at the end of the line!

 

But ultimately at the end of the day, you will still get the seller's on BoB who insist on misleading the buyers by indicating what I term as pathetic or ridiculous fabricated values just to drive the price up! Suppose that is my downfall as I refuse to put a value on a gem and as such never get to be on the receiving end of these "fabulous" bids that you see on BoB every day! I had a gorgeous Tanzanite listed recently which only sold for R350... I can only imagine what the selling price could have been if I'd fabricated a "value" to trick a buyer or few!

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Guest Guest   
Guest Guest

OK - off my soapbox now... bye! - quietly wanders off into the distance whistling... "Another one bites the dust..."

 

BLUSH - Lukeness, you got in there before me! Your explanation takes precedence! Trust the expert (Lukeness) FOL, not the novice (me)

 

 

Fantastic!!!

 

I so-oo just Love that part, EVERY bid of "that" part in your letter!!! :biggrin:

 

 

PS Sorry! I was a bid off the topic! :angel:

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