We feel that the information you are about to read is quite valuable and will be profitable to anyone who buys from the public. We are providing this free of charge. Please consider us when you have coins, watches, silverware or military items for sale. Good luck buying! HOW TO BUY DIAMONDS By Art Arbutine "Trader Art" (A TRAINING MANUAL FOR ESTATE BUYERS) HANDLING THAT FIRST PHONE CALL Dealers spend thousands on Yellow Pages, newspapers, and other advertising yet they don't know how to answer the phone. Most purchases begin with a phone call. People usually call first to find out if they need an appointment or business hours, directions, or if they have a question about the item they want to sell. Your success or failure may depend on the first impression they get from you over the phone. I once read that successful sales people learn to mimic the customer. If they talk slow, the salesman should do the same. Buying or selling, you want the customer think you are one of them. Always be on their level, in person or phone calls. You should learn to use the friendliest phone voice you can muster, and never be impatient or short even when asked stupid questions. When you are asked if you buy diamonds, don't just say yes. Hit them with a short commercial message, "We sure do! Our buyers are all GIA, Gemological Institute of America trained diamond experts. We are members of an electronic trading network of thousands of diamond dealers throughout the world. We always need diamonds for our retail jewelry department. We have been buying diamonds from people just like you for more than 30 years, and you can be sure you will get a fair, honest price here. We never charge for looking and there is no obligation to sell. We are friendly and easy to get along with." That sounds like a real mouth full but you have told the customer what they want to hear: One, that you want to buy their diamond; two, that you know what you are doing; and three, you will be friendly and treat them right. This short commercial message takes care of all three and it can be modified for coins, watches, antique jewelry, or whatever the customer has. The customers often introduce themselves on the phone such as, "Hello this is George Brown. I'd like to know....". Try to remember the first name or jot it down and try to get it in there now and then as you impart information during the conversation. It will help establish rapport but don't over use the name or you will sound like a salesman, and if you refer to him as Mr. Brown or sir, it would defeat what you should be trying to do. If you really want to impress the customer, jot the name down and as you talk make notes on the conversation. Keep track of this and put the information somewhere near the buying counter, where you will handle the transaction. While I have been typing this section, I have handled two phone calls. Peggy told me she would be in with her grandmother's Scandinavian coins. Angeline has a set of Rondo sterling flatware for sale that I quoted "about $300". Angeline sounded like she must be at least 80 years old. When an older woman comes in with a set of Rondo I will say, "Hi Angeline. Glad to meet you! I could tell from your voice that you would be a good looking girl"  This should bring at least a chuckle and Angeline will be very impressed that you remembered a phone conversation that might be a few days old. When Peggy brings in the Scandinavian coins, I will do the same. Give the potential seller the impression that you are very happy to hear from them and that you really want to help them sell whatever they have. Be enthusiastic but sincere. Avoid saying Sir or Madam. Talk to them as you would if an old friend were calling. Try to get on the same conversation level as the customer. You can actually strike up the beginning of a friendship on the phone if you know how to handle the phone calls. I know this because they often say, "Can I ask for you when I come in? Or, I'd like to deal with you when I come in." When you start to hear that from callers you will know you have done a good job on the phone. Try not to say anything negative, like, "Yea, we buy those but they are hardly worth anything now-a-days." Most dealers have a tendency to tell it like it is which you may have to do in the store, but over the phone avoid being negative or blunt. Howard Cosell would love you for it but Donald Trump wouldn't think it a good idea. You want them to come to your store. Scenario: You have told Mrs. Jones that what they have isn't worth much. Husband to wife, "What did he say about them?" She replies that they didn't want ‘em." You have turned them off with your negativity. They might have other things you do want. Your responses on the phone should be something like, "Yea, we like those a lot! We always deal in those. Everyone here likes them. We need some for our retail jewelry department. We buy those all the time. Those are great items!" You have to use common sense here depending upon the situation. You don't want someone to drive 20 miles to your store if they have just one thing worth only a dollar or two, or if you are sure they don't have anything that you would want. Any good sales person knows what an add-on sale is. Any good phone buyer should do the same. Whenever you have answered all the questions and completed your friendly phone presentation to the potential seller, the last thing you should say is, "By the way we buy….", and let them know what else you want. A lady who said she had an old purse full of buffalo nickels asked what we were paying for them. I told her and then gave our standard add-on, "Keep us in mind if you have any old jewelry, diamonds, silverware, pocket or wrist watches, military items or stamp collections. We are always interested in buying them." She said she had her mother's and grandmother's old jewelry, wanted to get rid of them, didn't know how or where. That afternoon I bought $30 worth of old coins and $5000 in jewelry. If you do buy from the public, don't restrict yourself to jewelry. Learn to buy other things. The best way to learn is by doing. You may get a call from a potential seller and they proceed to ask you what seems to be every question in the world. They might tell you about the ring they inherited from Uncle Charlie and how he died. If you don't have time or you are getting tired of the questions you say, "I'm very interested in what you have, but I am waiting on a customer at the counter right now and she is starting to look a little impatiently at me. If you can please bring your jewelry in, any time Monday through Saturday 9-5 we will gladly tell you what each item is worth. There is never a charge for looking, nor any obligation to sell. We are friendly and easy to get along with. I hope you can come in some time." This will cut most conversations short. MAKING PHONE QUOTES You will often be asked, "What do you pay?" Many other people ask if you make appraisals. Actually, they almost always mean, do you price things for a possible purchase. Be sure to clarify that before your proceed. If it is some simple thing like scrap gold or a silver coin, tell them. If it is a diamond or something that has to be seen, quote them a range or ball park price. We feel that a curt statement like, "Sir, we do not quote on the phone. You must bring it in.", goes against the friendly phone attitude you are striving for and it turns people off. Over the phone you don't really need to know what they paid for an item, or what they want for it, or if they have an appraisal. I like phone conversations to be friendly, cordial but not especially lengthy. If the customer wants information, answer all questions as nice as you can. Encourage them to come to your store. We advertise free verbal appraisals, no charge, and no obligation to sell. We try to avoid quoting on the phone but sometimes it is necessary. We feel that this policy brings more people in the store and is much more profitable in the long run. Every store should decide their policy and stick with it. Don't let clerks answer phone inquiries. Have someone who knows something about phone selling and also has extensive product knowledge and can intelligently answer the many questions the customer will ask. Nothing turns people off more than talking to someone (a dummy) who doesn't seem like they know what they are talking about. Many people call from the Yellow Pages. If you don't sound professional and well- informed or seem like their kind of place, they will go right down the page. Since we are also a coin shop and advertise to willingly make phone quotes, we often have to quote on generic items, such as silver and gold bullion coins and bars, Krugerrands, coin sets, items that have a standard price which doesn't have to actually be seen to be priced. When I make the phone quote the customer says, thanks, or OK or some acknowledgement. I always ask, "Is that about what you expected?" Most often they say OK. Sometimes, though, you will get an answer like, "Joe's coin shop quoted me ....." This is very valuable information, and you can react to that accordingly. ALWAYS get their reaction to any quote you might make, buying or selling. Scenario: The customer insisted that you make a phone quote on an item based on their description or their appraisal or a GIA cert. You reluctantly quote a very realistic figure of $1500-$2000. They tell you that they have a phone quote of $5000-10,000. You reply that many places quote prices that they know they won't pay in person but they exaggerate on the phone to get you in the store. You don't feel that this is an honest policy, that most who quote sky high on the phone, pay low in person. You can assure them that you almost always pay more than other places and not to sell the item till you get a look at it, or whatever response you deem appropriate for the situation. THE CUSTOMER IS IN THE STORE It might be polite to say, "May I help you sir?", but I don't like it. You don't greet friends like that and you want to strike up a friendship in most cases. I always give them a friendly, "Good morning and a smile. You don't have to say "How may I help you?" They will tell you without any prompting. If you can work in the name that you remembered during the phone conversation, that works wonders. Instruct your staff that anyone who makes eye contact with a customer should also give them a smile and a friendly greeting (and everyone should be trying to make eye contact!). It really impresses people if everyone behind the counters is friendly. If they have a bunch of coins I say, I'll bet there is something rare and valuable in there. Or if it is jewelry, "Looks like the crown jewels might be in there…" If they don't react with a smile or laugh, you have a clue about their demeanor and can act accordingly. Do what you can to get the customer relaxed and at ease. Husband and wife often come in together. This is especially true for retired or older couples. It would be nice if the customers came in one at a time and didn't have to wait to sell their goods, but some days it will be wall to wall sellers and then hours of none. It is very comforting to people, especially the older ones, if they can have a place to sit while they are waiting to be helped. We strongly recommend at least a couple modest but comfortable chairs in the area where you do the buying. Remember, that you are in your comfort zone behind the counter in familiar surroundings, have done thousands of transactions. You are relaxed. For most customers, on the other hand, it is just the opposite. Many have never done this before and they aren't sure what they are doing. Most are nervous or scared and some are petrified. Try to set them at ease. Be naturally friendly but don't go overboard. Make some off hand remark about the weather or something you might have in common. If they have a football shirt make some friendly remark about the team, anything that will get them to relax a bit. You can gauge their reaction to your comments and proceed accordingly. Some dealers introduce themselves, asking the customer's name and then shake hands. I feel that many don't really want to press the flesh or get to know you that fast. If the customer likes you, your chances of a successful transaction increase greatly. As any salesman, you sell yourself and then buy the customer's goods. Not every jewelry item that comes in will be desirable. In fact, most will be out of style or just plain ugly, not something you really would like to buy, but most all can be profitable if bought right, so take a shot at them. The more time you spend with a customer, the more rapport you establish, the better chances are for a transaction. However, you will learn to size up the customer and often it is just better to hit them with a quick number. Then, if they resist, you explain the difference between modern, out of style, and antique, explain the reason for your price. Some customers have to be schmoozed while others don't want anything but a price. You will often see items the customer tells you that they paid a relatively small fortune for, or the appraisal is sky high. It will often seem too embarrassing to make an offer. Sometimes we completely pass on an item but most of the time we make an apologetic quote, something like, "I know you think this is worth a lot more (or you paid a lot more for it), but we can pay only _dollars. If they decline to sell you can explain your seemingly low offer. If they refuse, you tell them to check around and they will find yours is a fair price, and it isn't likely they will find a better offer anywhere else. Thank you for coming in. I hope to see you again sometime. Many customers do not bring all their goods in at one time. This is especially true with coin collections, and some do it with jewelry as well. They often bring just a few items to feel you out. If they like you or get the impression that you have made a fair offer it is very likely they will bring in the rest. Quite often they will tell you as you leave that they are coming back, maybe to bring some of the add-on items that you have reminded them that you would like to buy. As you write up the purchase order or the check you will see the first name. For example, it could be Richard. You ask, "Do they call you Richard, Rich, or Dick?" When you get that information you make a mental note or write it down somewhere. When the customer comes back with the rest of the goods in a day or two, you greet him, "Hi ya Rich! Good to see ya again!" This is very, very impressive to customers that you remembered them and called them by their first name. It certainly helps in the rapport department. If you know the customer has been in before and you have forgotten the name you should say, good to see you again, in your initial greeting. Scenario: You have just bought a diamond ring from Hazel S Jones. You have reminded her that you also buy silverware, watches etc. She has told you that she will bring in two flatware sets and some old watches in a day or two. As you are typing the check on the computer (or by hand) you mention that you don't see the name Hazel very often and ask if that what is what they call her. She says that she hates the name and everyone calls her Sally, her middle name. Two days later she comes in with the other items. You greet her, "Hiya Sally. Good to see ya again!" She says, "You remembered!" Sally is about 65. You reply, "I always remember good looking girls." With this approach, your chances of a successful transaction greatly increase. BUYING BIG DIAMONDS When the customer hands you the diamond, you don't want to give them the third degree, as it makes them defensive and may break any rapport you might have established. As you are examining it, you work into the conversation the following, preferably not all at one time: Are they thinking about selling today or just want to find out the price? Is there an appraisal? Do they have a price in mind? These are very important things to know. If this is a big diamond, with the simple probing questions you have worked into the conversation, you will mentally put them into one of the two categories below: TOUGH DIAMOND SELLER: They might have an accurate appraisal from a local gem lab or even an EGL or GIA report and might even be quoting Rappaport or the Internet. This type usually plans to shop their diamond everywhere in the world. Whoever wants to make the least money will win their diamond. If you realize this is the situation and you don't feel it is worth your time, you might want to make a respectable offer and let them go their way. However, if it is something you really like or want or need and you have time to be really aggressive, you may say something like, "I want to buy this but I think you know pretty much what you want for it. Is there a price I can buy this for, right now, today?" Most of the time they will insist you make an offer. Then you hand them your card and tell them to please call you when they come up with a firm price. Meanwhile you will check with some of your customers as a pre sold diamond might make you a stronger buyer. If you do this with an intense, "go for the throat", manner they will be intimidated and never come back. Try to impart the idea that you are trying to help them get as much as they can for their diamond. If/when they call you back and ask again for a price quote, you tell them that you have a couple customers interested in that exact size stone, but you can't ask your customers what they would pay, you have to give them an exact price. In order to do that, you have to know what it takes to buy the diamond. Insist that they give you a price. If this is still a phone conversation, be sure you have done your homework and remember the deal and your maximum price. If they quote you a price you don't like, you can always make them a counter offer. Keep in mind that people are often less than truthful, especially this type customer. This is a lot of work for a small profit. You have to decide if something like this is worth your time. When buying mounted diamonds, be real careful when the stone has crud on the back. This is usually whitish household soap residue and in most case it causes the diamond to face up a few color grades higher than it actually is. If you can't clean the diamond before purchasing, give yourself some room on the color. It is very discouraging when you have cleaned a diamond and lost three color grades and you discovered you have paid more than Rap for it. When you are buying a mounted diamond that is supposed to be 1.02 per appraisal, or by your Leveridge gauge, you can tell the customer you will pay, say $2000 if it is over one carat, but less if it is below that. Most customers realize the importance of the one carat mark. The same goes for a 2.04 estimate. You can pop the diamond from the mounting and then weigh it on your portable diamond scale in front of the customer. Most of the time it will be over your estimate but there is no need to take chances, especially if you are working close on the deal. Before you go through all this, be sure the customer will sell the diamond per your offer. EASY DIAMOND SELLER: This is a person who knows little about jewelry. Their diamond was purchased a long time ago or they inherited it, or it was a gift. You can gain this customer's respect and confidence by giving them a short diamond lesson. If the diamond is an old mine or European cut or has a very spread table you can give them a short presentation on cut. I usually draw a pair of two or three inch pictures of an imaginary piece of diamond rough side by side and explain that before about 1920 the cutters didn't have the technology to cut a diamond in half, but they were able to grind them down. On the first rough diamond you have drawn you show how the old cutters at the mines wanted to save the greatest weight and how they ground down the sides (You doing the grinding with your pen or pencil), that they ground just a little off the top, thus the small table, and they cut the big culet thinking it would let more light through and make the diamond whiter. When you are done you explain the finished diamond resembled an ice cream cone. Show how the imaginary ray of light went through the table and was absorbed into the side instead of coming back as a sparkle. On the second imaginary diamond you explain that the modern cutters were able to saw a diamond in half (sketching this on the second picture of rough) and they were able to make two diamonds, one smaller. Then explain why the spread table was created, and follow that with a drawn picture of the more ideal cut diamond. If at any time this information seems to be falling on deaf ears or they show little interest, skip to the price. Next, show them how the price is determined, the whiter the more valuable etc. Explain the colors in groups, DEF GHI JKL, etc. Briefly explain clarity and then quickly show where their diamond would plot on a Rappaport sheet without any great details. Few buyers ever take the time to explain something like this, and most customers find this fascinating. If they have an inaccurate appraisal this is the time to show where you disagree. Now you are ready to make an offer. I like to write the number on a piece of paper, say $2300, hand it to them, and say that I can offer $2300. I think you will find that it is a very fair price. Then you shut up for their reaction. If they say OK, the deal is done. Often they will say they want to think it over or have to check with someone first. Be sure and ask them if they thought your price was fair and their intentions. This is where many dealers raise their offer in an attempt to buy it on the spot, what I like to call, bidding against your self. This almost always has a negative affect, causing the customer to wonder if your first offer was really fair or that maybe they should ask for more no matter what you quote. Many times after I have made offers, the customers have gone to the parking lot or to lunch or came back the next day and sold the ring at the price I quoted. Not many people have the time or inclination to take a diamond a whole lot of places. You have been so kind and friendly that the people might consider you as someone who can be trusted. I have had people walk and come back later to tell me that they were offered about the same or a little more at other places but they came back to me because either they didn't feel comfortable there or the other guy was too pushy, that you were nice and friendly and they would rather you have their valuables. Don't ever let the customer walk till you find out why you didn't get the deal. Once I offered a lady $1800 for her old cut diamond ring in a platinum filigree mounting. She scoffed, grabbed her ring and was six steps away from the counter before I could ask what she wanted. She said not less than $2000. The reason I remember is that I bought it for $2000, and it was 15% heavier than calculated on the Leveridge gauge and when I removed the crud off the back it went up two color grades instead of the usual down two color grades. BUYING TECHNIQUES Customers who have a lot of desirable items naturally will require more attention, more explanations, others less. If a young guy drops a used 20 gram 14K chain on the counter and says how much, he will still get a warm, good morning greeting. I will drop the chain on the scale and give him a price. If he declines, I'll still ask him why. This is all that required in a situation like this. You do only what needs to be done. Quite often the first item the customer hands you will be the one for which they have the highest regard. I try to offer a strong price for it and gauge their reaction. Always try to get the customer to sell the first piece or something, anything. Once the ice is broken you can usually buy most everything If the customer has multiple items, you should ask if they would like one price for everything or would they like it broken down. If they just want just one price for the whole thing they are probably shopping their goods. Figure it and give them a number but try to find out their status so you can bid accordingly. We strongly recommend that each buying station has a printing calculator. We wouldn't be without one. If they want things itemized we pull a long strip of paper tape out of the calculator and lay it horizontally on the counter. I group all the 10K 14K 18K that will go for scrap, weigh them and lay them together with one price for each group. I like to avoid saying the word, scrap. "These are worth only the gold price." sounds better. If there are unmarked items to be tested with stone and acid, I usually say, "I'm sure you have heard of the acid test. Let me show you how it works." Rub a streak of 14K and 18K and apply the 18K acid which will show how one or the other fades out, and will also show the reaction on the stone when there is no gold content. Show them how to test for silver using the 18K acid. The customers love it as it's very fascinating to them, and you have taken them into your confidence by showing how the test works. Again, if the customer shows little or no interest in what you are doing, just cut to the price. Most customers appreciate having things laid out with each piece or group itemized. For one thing, it saves any arguments on the price that you have quoted. If you are pricing several items it is embarrassing to have forgotten what you said, and sometimes the customer remembers a higher price. Seeing prices on each piece of jewelry gives the customer something to focus upon. The written word carries more weight than verbal. I often tell them that I could zip through their jewelry and give a quick total price but wanted to make sure I don't miss anything, and I want them to see what I am doing and that they know I'm offering fair prices. I want to get them involved in the process and I answer any questions as I go. They appreciate that and it will improve your image. When you have priced everything, it has been our experience that most will sell you all or occasionally they will pull one or two and sell the rest. If you are making either verbal quotes or writing prices on the printing calculator paper strips, it is very important that you observe the seller's reaction to your quotes. If you are giving verbal prices and the customer wraps the item up and puts it back where it came from, you are probably not going to buy that item. If they leave some on the counter and put some away it usually means they are going to sell the ones they left on the counter. Be sure you remember what you offered for them, and better yet, write it down. If it looks like they are going to put everything away you should politely ask them if they are going to sell anything today. Try to clarify the situation. It is always good to know where you stand on any deal. You might also politely say something like, "I know we offer free verbal appraisals and there is no obligation for you to sell anything, but we would like to buy something to justify our time. Don't you like my prices?" This will stimulate some conversation and might clarify their status. Proceed according but maintain your polite, friendly demeanor. If you have written five or more prices on the strip of calculator paper and you have gotten no reaction from the customer, you might smile and inquire, "How am I doing?" Again, if they leave some on the counter and put some away you can assume as in the previous paragraph. If they pull something you really like, you might ask them what price they had in mind. Don't raise your offer unless it will result in an on the spot transaction If you are purchasing the items from a strip of adding machine tape as previously suggested, it is easy to figure out the total, just add the items that you have priced, preferably on an adding machine that prints. You hand the customer the printed paper tape that has the total price. Carefully go over each item to make sure you have gotten everything correct, not missed anything, nor made any mistakes. The customer has checked the tape with the final totals against the items and knows that nothing has been missed. If you are writing prices on an invoice pad as you go, write clearly. The tendency, especially for older people, is to wonder if they got paid for something or other after they got home. If there are multiple items, however you do it, be absolutely sure the customer knows that each one has been accounted and paid for, whatever method you use. You have to remember that for some, this selling of precious heirlooms is a traumatic experience and when they get home they are still numb from it, especially older people who will make up most of the sellers. Sometimes the customer will decide to keep the one item you really like, something that would definitely do well in your retail jewelry department. It could also be something you have made a relatively low offer for. You are fairly sure that there is no chance this will come back later, that this is a one time deal for this particular customer. When that happens you politely ask, "May I have another look at that one?" And of course you ask if they have any price in mind. Usually you will get an evasive answer than a price. You reexamine it and casually ask, "If I can come up with a better price would you consider selling it? I'll check with our jewelry department. They might like this." If they say OK, you tell them you are going to get a second opinion. You will see if you can get them a better price, giving the impression that you are trying to help them get more, rather than trying to buy something for which you have bid low. You can consult with the jewelry department, or someone, anyone and then tell the customer, "Our jewelry department really likes this. They think they might have a buyer for it, so we can offer more. Would you take ___ dollars for it?" You can do a little coaxing here if they still resist: "You know, I really would appreciate it if you would consider selling this. Everyone in the jewelry department really likes it. The more I look at it, the more I like it." Getting the second opinion maintains your credibility and is much better than bidding upward by yourself. This could be considered bidding against yourself, but not really, as you are fairly sure this item will never come back. Many customers will walk and then come back, ready to sell at a quote you may have made earlier in the day or even days in the past. Often they mistakenly remember a price higher than you actually quoted, and some just outright lie. If there is more than one buyer they will say that the other gentleman quoted ____. This is an uneasy situation. You don't want to go back on an offer you or someone there quoted, yet you don't want to be conned either. If the customer is correct and you offer lower they will feel that you went back on your word. People do not understand that once they refuse your offer it is a new ball game. Even if you buy it at the lower quote they will leave with a negative feeling about your store. You could write the number you quoted at first contact on the back of your business card and give it to the customer. The drawback there is they might use that against you while shopping other buyers. You may want to start a Quote File. When you make an offer on a significant item and the customer wants to think about it, you can file their name, a short description of the piece, and your quote on a 3X5 card. Something of a more significant value should require a more detailed description on the card. There are many times here we wished we had done this earlier in our business experience. You should be buying sterling flatware and hollowware. Many dealers identify the flatware pattern, and then call our Silver Queen Division at 888 436-6463. If we have quoted, say $14 an ounce for the Chantilly pattern, it is easy to dump the customer's flatware on a scale and then offer, say $10 an ounce. Many customers will show great concern and figure that you are buying their flatware for scrap. The recommended way to handle this transaction is to estimate the weights and keep track of things on a calculator, preferable one that prints. You pick up 8 spoons, estimate they weigh an ounce each and then hit $80 on the adding machine. You pick up 8 place forks and estimate they weigh 1.5 ounces and then hit $120 on the adding machine, etc etc. With a little practice you can become very accurate with your estimates. After you have figured everything, you pull the adding machine tape, verbally tell them the total and then show it on the tape. If they have any questions, you simply tell them you are very familiar with this flatware pattern and you figured the price at the resale value and not the scrap price. On hollow ware it much more difficult. Most of what you see will have no resale value and you explain to the customer you have to figure it at "the silver price". You can just drop it on the scale and make a quote. If the customer is sensitive to this or if you know you can get $20 an ounce for and you want to pay a little over $10 an ounce, you might want to tell the customer you want to consult with someone and have another scale in the back room. Or you can say that you aren't figuring it for scrap, you just want to know how much silver is there. Examine the items very critically and point out any dings, nicks, monograms or problems. You can always consult with our Silver Queen Division to help you while buying any and all silverware. HOW TO HANDLE TOUGH CUSTOMERS You will discover that some customers exaggerate what they were offered elsewhere or tell outright lies. It is pretty easy to spot the outright liars. Their "elsewhere price" is something no one would possibly pay. When this happens you want to nail them down a bit. Say something a little sternly, like, "You are telling me that someone offered to pay you that much, cash or check on the spot?" You will seldom get a straight answer. It is usually what my wife was offered, years ago in New Jersey, or it was a consignment price or you will get some evasive answer. If the customer continues to lie and says that it was a firm cash offer on the spot, you have the urge to tell them they can go to hell for lying, but you don't. You still want to buy it so you shake your head and act like you believe the lie. You say something like, "I'm pretty sure that buyer will realize they made a mistake and will change their mind or tell you it was a consignment price. If that happens, bring it back and I will still offer exactly what I quoted today." Chances are you have not quoted the top price you would pay, if forced to, for this item, and again, the natural tendency here is to raise your offer. This person is a liar. There might not even be another buyer. Then who are you bidding against? Yourself of course! Don't do it. Don't bid against yourself! I have had instances just as I described in the previous paragraph where the customer said, "You are probably right. I'm tired of fooling around. Take it". We don't like consignments, so we rarely take a customer's jewelry on consignment. If you can convince the customer to do so, more power to you. You have increased your inventory at no cost. Since we don't, we try to convince the customer that consignments are not always a good idea. We tell the customer that the reason many stores take goods on consignment is that they can't afford to buy them. Does the customer want to leave their valuables with someone who can't afford them? Things get shoplifted. Stores get robbed. It is rare but diamonds get switched, that there are just too many things to worry about and you don't want that on your mind. This may be a little tough on people who take in a lot of consignments, but this is a matter of us against them. We don't feel this is unethical unless it is in reference to some specific store. I have advised against bidding against your self. You should only raise your offer if you are sure it will complete the transaction, on the spot. When the customer is ready to walk, I often ask, "What price were you thinking here?" Usually they are way out in left field or they won't say but occasionally they might have a number where you can still make a small profit. A bird in the hand might be worth two in the bush. But keep in mind that if the price is close to what you would pay, it still might be negotiable. Say, for example you have offered $1000 for something that you don't actually want for inventory but you think you can blow it out on the Bargain Channel or elsewhere for $1500. The customer says $1400. You want to counter with $1200 but you don't just say, OK how about $1200? You use a little salesmanship and say something like, "I realize you want to get all you can for this and I truly appreciate it. You owe it to yourself and family to do that. However, I think $1400 is about all I could get for it and you have to understand my situation with overhead and all, I have to make a profit. Tell you what, Ill pay you $1200. We can do this right now and you can get this off your mind." He says $1300 and you buy it for $1250. I don't believe this is bidding against your self. If the customer is stubborn with the $1400 it is likely he was offered about that for the item somewhere. It is up to you to decide if you want to do this for $100 gross profit in this situation. YOU STRUCK OUT. WHAT NOW? Let's say that you have been on your A-game, you were polite and patient, took a lot of time pricing and explaining the value of the customer's goods and you completely struck out, bought nothing. Mentally you are a bit upset, wasted as much as a half an hour. Maybe the customers have been a bit of a pain in the ass. You even get the feeling they really didn't want to sell anything, just wanted a free appraisal. Never the less, you hide your feelings, warmly thank them for letting you see their goods, that if you can help them with anything in the future to let you know, and thanks for coming in. If you decide to sell please come back. Hope to see you again soon. You can't read people's minds. Maybe they are going to go home and think about it and sell you everything later, maybe much later. It is not rare that people come in and say, you quoted…. You don't remember and they say it was over a year ago. You never know. You can't win them all. If you appear to be irritated or give them hell for wasting your time, for sure, they are unlikely to come back, and they will tell their neighbors how rude you were. You don't always get to deal with people you like. Some days you'll feel that the free, friendly appraisals that you willingly give might not be such a good idea. Sometimes the seller will take your numbers as a base and shop the goods to other dealers. You must realize that you aren't going to really make any real money, nor will anyone else from this type of customer, so don't worry about it. You'll win some and lose some, but in the long run you will be way ahead of the hard assed dealer who is all business and doesn't have any class or patience with the customers. SEND THANK YOU NOTES TO THOSE WHO HAVE MORE TO SELL It is a good idea to send a thank you note to people who likely have more significant goods to sell or if there is a good reason to do so. It should be simple, something like, it was a pleasure meeting you and doing business. If you have anything else to sell or any questions about anything we just purchased. Don't hesitate to write or call if we can be of service. Hope to see you soon. You could have the basic format on your computer, print out the letter easily on your letterhead. If you talked about the football team, golf, or military experiences or something like that, personalize the letter with a comment about it. That will keep it from looking like a form letter. Don't go overboard on the thank you note. Keep it simple and sincere. Don't let it look like a commercial advertisement. If you think this could be a potential retail jewelry customer you might put a 20% off certificate in with it. Sometimes we include a few old interesting banknotes. The kid that sold you one 20 gram gold chain will not usually require a thank you note. PROPS CAN BE HELPFUL My friend the late Marvin Leib and I were at a conclave discussing how cheap small diamonds were becoming and the difficulty of buying cluster rings and tennis bracelets from the public. He said he showed the customer a copy of a mail order catalog he had that offered promotional grade diamonds in cluster jewelry for a buck or two a point, throw in the gold. I clip out those mall store ads you see in the local newspapers, 1 carat diamond cluster rings for $99 and one of the most recent, last Christmas, 14K gold tennis bracelets containing 5 carats of diamonds for $595. Start a folder. I have created a one page flyer, JEWELRY with SMALL DIAMONDS, explaining how Debeers lost control of the small diamond market. I often let the customer read it while I am estimating their jewelry made of mostly small diamonds. Any props as mentioned this paragraph might make buying jewelry with small diamonds easier. OVERCOMING BAD APPRAISALS Anyone who buys from the public knows that about 80% or more of the appraisals that come in with Mrs. Gotrocks jewelry are vastly inflated or inaccurate. Many are from the "Reputable Local Jeweler" in Podunk Ohio. You know the story. His daughters went to school with her daughters. They attended the same church. He was in business for 30 years, most of them as the only jewelry store in town. He appraised the customer's ring for $6000 back in 1987. You know it is a $2500 retail item tops, that you could easily get something just like it from your supplier for $1000 cash, $1200, 90-day terms. Who is she going to believe when you offer $5-700 for her ring? You must explain that the appraisal is like a worse case scenario, that mall stores give incredible credit terms, years to pay, etc. Their markup is as high as four times and they themselves get everything on credit so they pay a wholesale price higher than most all other stores. Many appraisers feel that their price should reflect a number where anyone could walk in, even at a mall store, and replace their lost item at full sticker price, no discount, not at a sale price. Appraisers virtually never get in trouble for high appraisals, but all realize that if they appraise something too low and it gets lost and cannot be replaced for the appraisal price, the appraiser could be sued for the difference. As a result, most all appraisals tend to be very high. Scenario: You have offered $1500 for a diamond ring. The lady pulls an accurate appraisal out of her purse for $5000. You pretty much agree with size, color and clarity of the center diamond as assigned by the appraiser. Note: This is a rare occasion, an accurate appraisal. The customer expected at least $2500 and is disappointed and very concerned about the (to her) low offer. You have to do a little math here to convince her that your offer is fair. Do not do the math verbally. Pull out a piece of paper and write down $5000. You explain that appraisers, based on standard practices, typically figure a mark up of at least 2.5 times wholesale value. (If you want to get a short commercial message in here, you might mention that your store never marks up that high.) This covers the store profit and takes into consideration 25-50% off sales, trade-ins, overhead, sales commissions, etc. This means that the piece probably cost the jeweler about $2000. Write that number down below the first one. You explain that you could get a ring like this, or one that you might even like a little better, from your wholesaler any time you wanted for $2000, and even get 90 days to pay for it. Therefore you feel that your offer of $1500 is justified. You write $1500 at the bottom. In the previous scenario the appraisal was fairly accurate. If you buy jewelry you will soon discover this is not always the case. Most appraisals are either inflated or inaccurate. Let's say, for example, that this exact same ring came in with a $7000 appraisal. Here is the suggested response, "Wow! The appraiser really got carried away on this one. He got it wrong. We buy and sell rings exactly like this all the time. We know this market better than any appraiser. I don't know why this is so high. It should be around $4-5000." You write the $5000 figure down on the piece of paper and completely ignore the $7000 figure. In fact you physically turn the appraisal face down on the counter. Then you proceed with the previous explanation using four or $5000 as the should- be price. If you have established good rapport with the customer, and you appear confident and sincere in your explanation, you may be able to buy the ring for $1500. DRESS CODE You should dress comfortably, within reason. You want to look neat and professional. Most of the young male movie stars and the cool stud models on TV and in magazines have the appearance of not having shaved for several days. Most of the people selling jewelry or coin collections are older and generally they don't think it is cool to be unshaven. To them it will mean you are a crud, too lazy to shave. Beards and moustaches are OK if they are not scraggly. If you or your staff has tattoos keep them covered. Many people associate tattoos with drugs or prison. If your clients are mainly business and professional people who wear shirt and tie, you should too, to be one of them. You can be a walking billboard if you go to your local trophy or printing shop and buy a two to three inch plastic name tag engraved with your name and name of your store. These attach to clothing easily with a magnet backing. These are very professional looking. The cost is way under $10 each. You probably have seen real estate people wearing them. Where ever you go, people will see the name of your store. Mine reads ART ARBUTINE, Belleair Coins Gold and Diamonds. I get many comments when people see it as I go about town. They either say they have been a customer or ask if we buy coins, and some didn't know we bought or sold diamonds. Whatever the conversation I'm always sure to get in a little commercial message about our jewelry department or the fact that we buy coins and diamonds etc. BUYING AND SELLING IN THE SAME LOCATION ARE COMPATABLE Many jewelers feel that being an active buyer of jewelry will interfere with their jewelry sales. This is not true. Our jewelry department sells $2-3 million a year and every customer has to walk right by it to get to our buying section. Almost all could care less what you sell your jewelry for. Their main interest is what they can get for their jewelry. It is rare that someone will say tell you that theirs is just like one in your showcase for a much greater price. It is easy to answer that as it is rare that two pieces of jewelry will be exactly the same quality or type. When you have successfully purchased the customer's jewelry or whatever, they either have your cash or a check, and they are leaving the store. You have done your duty. Your job is over, right? Wrong! These people have new found cash in hand. They may not really need the money and some might need a birthday or Christmas or other gift or want something for themselves. Remind them that you have a terrific jewelry department, good deals galore and that if they see something they like there, you will deduct it from the check and they can avoid the state sales tax on what they might purchase. If they seem interested you might tell them you can make them a great deal on a trade, offer a discount, or whatever you think might motivate them to buy jewelry or other items in the store Most buyers won't be interested in the offer but we definitely get some money back every year. A few years ago a well to do gentleman and his wife cashed in 5 Krugerrands. They were a very pleasant couple and we had been chatting and joking around. When I handed the husband a check for over $2000, I joked that if he were a really good husband he'd give it to the wife for jewelry and mentioned the sales tax break. She snatched the check out of his hand and said it was a great idea. She bought a ring for $5000. We made a purchase and a great sale, AND added a new jewelry customer to our data base. The husband came back to me and jokingly said, "You are an evil man, Art. I'm never coming here again." We both laughed. This reciprocation between the buyers and the jewelry sales people should work both ways. The jewelry department should remind all customers that you buy old or unwanted jewelry, and also suggest a trade. When I find a customer might be interested in trading for jewelry I ask what they are interested in buying. If, for example, I have bought their goods for $300 and they want to trade for a gold chain (low markup), I write a very informal credit slip, like $320 store credit. If it is a strand of pearls (better markup), I write $350 store credit. If they don't find anything, they come back and I give them $300. The cooperation from the buyers and jewelry department will bring each other new customers. It works both ways When buying jewelry, most cities and counties have some sort of police reporting requirements. A few customers will seem concerned at getting their names on a police report. When I start the procedure I always tell them that we trust them but this is a routine form we must fill out as it is the law. When you ask for ID don't say, "I need to see some ID." "May I please see your driver's license?" is correct and more polite. Always do what you can to stay on the best of terms with your local law enforcement. From time to time you are bound to make some mistake or submit the forms late, or do something the police won't like. If the police think you are a good guy, cooperative and respectful they will usually let it slide. If you are ever asked to buy tickets to the local policeman's ball (or such), you ask, how many? If they don't like you or your attitude they might fine you for small mistakes or worse. FINAL COMMENTS Some who read this will be skeptical about much that is written about establishing rapport and being friendly with the customers. They will believe that, "It's not all that complicated. You hit'em with a price. They either sell or walk…." You know, this is right about 75% of the time, maybe even more. This paper was not written by someone immersed in academia who did research and wrote a paper. I have been buying over the counter from the public for a little over 33 years. You follow what is written here and you will be a better buyer. You will get more customers in the door and fewer will walk. An additional benefit will be the friendly, solid reputation you will establish in the community. Few will remember the price or details of the transaction, but they will all remember that you were friendly and polite and will recommend you to their friends and neighbors. What should you make on any particular purchase? What do you offer the customer and still be fair? You want to make some money and still maintain your reputation, but keep in mind the taxes, air conditioning, rent and all the tremendous overhead that all dealers must pay. When making an actual offer on something you should be thinking, what can I blow this out for, and not what would it go for retail. Those items that looked wonderful when you bought them might turn out to be dogs. You must give yourself some room in case this happens. You have to decide what is fair and offer accordingly. Don't forget that although some pieces will bring great profits, some will be losses and ALL are subject to unexpected surprises, plus a lot of overhead. (Surprises like a CZ getting by you or a GF piece bought for 14K, or a claim of stolen jewelry resulting in a loss, etc.) The total AVERAGE has to be in the profit zone. The more carefully you buy, the more likely that is to happen. You must make your profit the moment you buy an item. When you are making an offer, don't worry about what the guy down the street might pay, or offer too much because of the customer's wild expectations. You know at what level your need to buy to survive the overhead and show a profit. If you buy something that you have to sell retail to see some daylight you might as well close down your buying counter and concentrate on just selling jewelry. To be a successful buyer you must be able to use common sense and make snap decisions. Not everyone is cut out to be an estate buyer. It is not for the timid or faint of heart. You have to take some heat and keep your cool. Prices you offer will occasionally bring moans and groans, even resentment from some customers, most often due to the customer's unrealistic expectations, previous bad buying habits or an inflated appraisal or confusion about internet prices. Some will even leave the store very upset and heatedly tell you what they think about your offer. You have to have some balls and you better grow a thick skin. The more rapport you establish, the less static you will get. The best way to learn is by doing it. You will profit by your mistakes. As an estate buyer you will be automatically enrolled in the College of Hard Knocks. You just keep learning, taking more courses. You never graduate. Note: This is sensitive information, just for the eyes of professional dealers. Please use it only for the education of yourself and for training your employees. Do not post it on the internet or disseminate it elsewhere. It is copyright and cannot be reproduced without our express written permission. All my thoughts and recommendations here are based on how we do business at Belleair Coins Inc, and the Silver Queen Inc., 1350 W Bay, Largo Fl 33770, phone 888 436-6463, email address: art@belleaircoins.com. We are 1768 on the Polygon network and FL15 on Coinnet. Everyone has their way of buying and some might not agree with everything here. This section of our website is not static. As we get good suggestions in reaction to this, we will include them. We welcome comments and suggestions. Good buying out there   Copyright M B Arbutine 2006