Before we get into the Strategies, keep in mind that when it comes to gemstones, the term “investment grade” seems to have no specific meaning. It was too broad and had too many exceptions, just like the terms “precious” and “semiprecious” stones. For example, a gem with excellent grades in all Four Cs may be beautiful and expensive, but you may never recoup your investment if you try to resell it.
Nonetheless, such treasures are sometimes referred to as “investment grade.” The term is frowned upon by the United States Federal Trade Commission (FTC). Although using the term in marketing is not illegal, it has been so misused by fraudulent sales representatives that many buyers cringe when they hear it.
If you are a gem dealer or intend to resell gemstones, describing them as “investment grade” can damage your reputation. As a result, don’t do it.
Let’s move on to the Strategies.
Strategy No1: Manage Your Cost Basis
You must “buy right.” It is possible to profit from gem investing, but your cost basis in a given gem must allow for a built-in profit on the day you acquire the gemstone. You must have a safety margin. The single most important determinant of whether you’ll generate a good return on investment is paying the correct price. As with any investment, you must be knowledgeable and exercise extreme caution and common sense.
Strategy No2: You’re unlikely to get back From a Poor Gem Purchase
Strategy No3: You require buyers capable of selling your gemstones at retail prices.
This is because they can, at the bare minimum, pay you full wholesale prices for your gemstones. Jewelry stores, auction houses, and online purchases are all potential buyers. Maintain in mind that you are unlikely to get a retail price unless you own a business. Making connections to these potential buyers is also more difficult than simply calling your broker. Prepare to go out and discover your own customers.
Consider carefully your profit margin before purchasing Gemstone Jewelry(like Gemstone Rings, Gemstone Earrings).
Lower-priced gems are marked up more (often five times or more) than more expensive gems. For example, jewelers may have a reasonable minimum price when ordering stones for a customer. It makes no difference whether the stones cost one dollar or five dollars; jewelers may believe they require a minimum of 10 dollars only to justify the workforce of ordering the stones.
Consider Increasing the Value of a Gem Deal
Two processes cause a significant price increase in gems: rough and cut between the loose gems and finished jewelry. These require more effort, but they are some of the most efficient methods for boosting gem values.
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