The mail principles of pricing and evaluation of non-standart and unique objects – raw large single crystals of precious and semi-precious stones, large rough diamonds, etc..

The basis of any pricing and evaluation is a market – that is statistics processing sales of similar items goods, products. Based on this data set price offered for sale goods.

However certified product (it has documentary proof of physical parameters), there will always be in times more expensive than non-certified counterparts evaluated. Market price is the basis for further definition of financial volume of goods, i.e. profit which may bring this product within a certain period being turned in banking instruments.

Financial volume is calculated by the variant Hartley formula based on the market price and a set of matching (related) this product raising factors and usually exceeds the market value of 5-14 variant times and is calculated by experts (independent appraisers or special appraiser companies) for insurance and banking purposes.

This methodology of appraisal based on experience of previously made transactions of a similar nature and modified Harthly formula.

C= b x h x I x N*
C – Replacement Value of examined object;
b – Original Price of the Object;
N – Single Increasing Factor;
h – Coefficient of Currency (i.e. USD);
I – Direct Proportion of the Increasing Factors;

Amount of increasing Factors. 100 – is 100% – i.e. all 14 increasing factors from the list figured below. Meaningful % value of each factor is about 7% (for example 13 factors – 93%; 12 factors – 86%

Increasing factors when calculating a replacement value have to be:

Size of object

Rarity of object

Origin of object

Treatment or lack of treatment

Time of the objects extraction

Ranking of object

Certification of the object

Limits to financial uses of object

Artistic value of object

Perfection of the crystallite forms of object

Amount of defects intrinsic to object

Amount and coverage of elements of the coating

Potential for jewelry treatment of the object

Potential possibilities of object being used as a financial instrument

Limits to financial uses of object


A collectable (collectible or collector’s item) is any object regarded as being of value or interest to a collector. Collectable items are not necessarily monetarily valuable or uncommon. There are numerous types of collectables and terms to denote those types.

The Different Values of Collectibles

If you are involved in the world of antiques and collectibles, you may be aware that there are several different kinds of monetary value associated with each piece. Before determining the worth of your collectibles you must decide which type of value is needed. The retail value is the price the item sells for in a collectible or antique shop.

The wholesale value is the price that the dealer usually pays for the piece. This price is generally 33-50 percent less than the retail value.

The fair market value is the selling price of the item that is agreed upon by both the seller and the buyer. Neither party must be under any pressure to make the sale and both parties must be made aware of all information that is relevant to the item.

Generally, the insurance value is the highest monetary value given to an antique or collectible. This is the cost of replacing the item if it were destroyed or stolen.

The tax or estate value of an item is determined by averaging the auction prices paid for a piece that is exactly the same or very similar to the piece.

The auction value is known as the open market price. This is the price the item would sell for when neither the seller or buyer is in a position of forced sale.

In addition to the different kinds of value, or worth, many collectors know of these additional monetary values.The price the owner of the collectible thinks it is worth.

The price the buyer wants to pay for the item.

The price that is listed in a current Price Guide.

The actual price the item sells for regardless of whether it sells at an auction, is sold to a private buyer or is sold to a dealer.

Criteria Used to Determine the Value of Collectibles

There are several other factors used to determine the monetary worth of a collectible.

The law of supply and demand plays an important role in determining the value of a collectible. As collecting trends change, the demand for an item also changes. It can become more in demand forcing prices upward or in less demand which causes prices to drop.




Aesthetic appeal

Specialty Items

When jewelry is custom-designed, handmade or from a particular manufacturer, its relative value may be substantially different from that of production pieces.  Just as certain artists command higher rates for their work, so do established jewelry designers and it is important to identify such work in the appraisal for proper replacement.


Period pieces no longer in production require research of like items and their availability on the secondary market.  An appraisal for current reproduction can also be prepared, reflecting what a jeweler might charge to faithfully reproduce a like item by modern methods.  The appraisal time and charges and resultant insurance premiums will, of course be higher if this method is requested and it would only have a use for an actual replacement (not for resale).  In the case of discontinued watches, replacement may be requested based upon comparable new models or the same model from the secondary market.  Consult your insurance agent as to which they will allow.


Transactions outside of the retail environment will depend upon an item’s marketability and the method of sale. An appraisal is beneficial to both parties because it establishes quality and gives a comparative retail value for comparison. Consult your appraiser for further information.


A branded diamond or jewelry item is one that receives a value reflective of a  particular dealer.  Tiffany & Co. does not compete with Costco.  You are paying for a name and an experience.  In an insurance replacement you would go back to Tiffany. Since Tiffany & Co. has published prices and never discounts, it is a straightforward appraisal application.

If you are on a cruise and buy  a Crown of Light diamond cut, your only source for replacement is from Diamonds International, the parent company.   A patented cut, this diamond  has its own price list, but the stores selling it offer varying discounts, so the appraiser needs to research overall transaction prices to establish a “normal” replacement value.


For insurance purposes, a relative retail replacement value is typical. Since retail values vary from source to source, you may see discrepancies between appraisers depending upon their interpretation of the market. It is important to remember that the appraisal “value” allows the insurer to charge premiums based on that dollar amount but does not obligate them to pay it out.  Their obligation is to indemnify you – make you whole again.  As long as you get back the quality of item lost, you are considered covered.  If the  insurer only has to pay a vendor $10,000 to replace your $20,000 ring (appraised “value”), you just paid excess premiums (about $120) each year to insure that ring.  Since insurance companies don’t always scrutinize a submitted appraisal, and a lot of appraisers routinely over-value items, consumers pay millions and millions of dollars for “hollow” coverage.

Some insurers will even “partner” with dealers, accept that dealer’s in-house appraisal at elevated levels, then replace through that dealer, again making  more money (yours) from excess premiums.  Fortunately, more and more insurance companies are on the lookout for excessive appraisal amounts in an effort to get values closer to actual replacement costs.

Estate Appraisals

If the purpose of the appraisal is for an estate settlement, a fair market value is required. This type of value is generally much less than retail and is a requirement by courts and the Internal Revenue Service for legal purposes.  This type of valuation may also be appropriate for other  purposes such as marriage dissolution, charitable contributions and for some criminal proceedings with  adjustments from the IRS description of fair market.  Terms like “orderly liquidation” may be used with qualifications applied to the specific case.

How is an appraised value derived?

For insurance, contemporary jewelry usually has like items readily available which allow for a market approach to the appraisal process.  Not unlike methods of the real estate appraiser, comparable items are used to establish a replacement value.  In a cost approach, components of the item are and added together to establish value.  Major diamonds are valued from comparable ones in the marketplace and with recognized trade price guides and a markup reflective of the retail environment.   Colored stones, on the other hand require extended experience in the field with industry sources for each specific gem and their quality.  Price guides are merely that and it is the expertise of the appraiser that really shows here.  Mountings in the cost approach reflect metal content, method of manufacture, accent stones and a retail markup.

A jeweler’s retail markup on center diamonds is very little (due to competition with Blue Nile, Costco, etc) while that on colored stones and mountings is higher.

Fair market appraisals reflect the anticipated sale of jewelry.  An appraiser will research comparable items in the secondary market, such as auction houses and re-sellers for some items and resort to scrap value on others.  This means there is no magic number or percentage  – it reflects a best-use scenario for the assignment and for each item appraised. And, there is no one standard for fair market value.  The IRS definition reflects the price the item realizes (adding an auction buyer’s premium, for instance) while most other applications reflect the previous owner’s return (or cash received).

Don’t assume all appraisers know how to handle fair market situations.  Estates for probate, distribution or planning, divorce, bankruptcy, collateralized transactions or criminal proceedings each require proper treatment.

In estate situations, formal appraisals may not even be necessary.  If there is no need to document individual values – for the Feds or concerned family members,  an informal consultation may be all you need.  The appraiser can also provide a total value for declaration purposes.