FOR MANY YEARS, there were jewelers who bought over the counter and ones that didn’t. Often, there was a stuffiness from the ones who didn’t toward the ones who did.
Then the world changed as clients aged out. As the baby boomers started retiring, the stuffy jeweler recognized both the need to adapt to the times and the enormous potential that buying OTC afforded. Customers’ lifestyles changed, and in many cases, their children — those pesky millennials — had no interest in the lifetime collections of jewelry and watches.
OTC buying became necessary for survival.
But jewelers new to the OTC business get caught up in old ways of thinking.
- Many higher-end jewelers have sold incredible pieces over the years but are scared to offer fair market prices for fear of upsetting their customers. It all has to do with presentation. In approaching a customer like this, it is important to recognize that you are coming alongside of them, not fighting with them. You are a partner in helping them achieve a goal. Explain to them the changing tastes in styles and the huge disparity between the primary and secondary markets. In most cases, a customer will recognize the advantage of cash, an appreciating asset, over having a piece of jewelry sitting in a safe, a non-appreciating asset.
- I have always believed that someone who has grown up on the retail side of the business has a difficult time making the switch to the buying side. They have been ruined by years of customers paying key, triple key and more for new merchandise. They think in their minds, “I sold this once for $10,000, I’m going to steal this for $3,500 and then sell it for $8,000 to the next person who walks in.” Only that next person doesn’t walk in and now you have buried $3,500.
Your local bottom feeding diamond broker has offered you $2,200 for the piece and it just pisses you off. The problem is, the diamond broker is probably right. And it’s likely that you could have bought the piece for $2,000, because everyone else in your town is likely approaching it that way.
If you don’t know where you can sell your OTC piece tomorrow and make 10 percent, don’t buy it! That doesn’t mean you have to sell it, you just have to know where you can go to make a right-now small profit in case you need to turn the dollars.
Remember, you’re not running a museum. I’ve always approached OTC as a volume business, never a high margin.