So in preparing for my next international trip abroad, I was on a forum where people were getting frustrated trying to plan for purchasing gold jewelry on a tour in advance through the tour company, where a local jeweler was offering to design via his Facebook profile and deliver the jewelry for review / payment (with the option to cancel on sight) at their hotel.
There was this whole flurry back and forth from various people in the tour trying to help each other and not understanding why they were having trouble getting a fixed price from the merchant in advance. Let’s delve into why, and how you can avoid the various pitfalls these folks are circling.
There are a few layers to their frustration, namely because in America we do not know or understand the actual gold market, and because we are a fairly young, insular, and backwards country in many ways, we are unevolved on this aspect. Why?
Most American “gold” is costume jewelry
Basically — gold has been around for thousands of years. It’s the financial standard that backs banks, and everybody abroad knows how to trade with it, including everyday people. The average person from India, Singapore, China, UAE, and North Africa, and probably Switzerland, Germany, etc., are all going to know how to navigate this, just like navigating SIM cards when switching from country to country. It’s just part of life. Even if you’re from a country that doesn’t manage large quantities of gold production or trade, you’re still generally going to know better than the average American about how to buy and sell gold.
And our American / Western jewelry industries, and tourism industries, take immense advantage of us for this reason. In short: you pay a substantial markup on “gold” that no one would ever deign to buy from you either in America or abroad.
Let me repeat that: What you can buy on average at a major national jewelry chain or a boutique shop or a pawn shop or a store like Target/Walmart/Macy’s, or whatever, is NOT considered “gold” abroad. It is too poor of a quality, and it is absolutely useless for resale. This jeweler explains a bit, amusingly trying to fluff over the part where the markup happens and saying things like “expect to pay double” what the gold is worth. Hilarious! Ridiculous! She can say this, because she’s an expert, and has access you don’t. But, if you are clever and do your research and you can find jewelers from other countries who have settled in your area, or you can visit other countries — that is the time to buy gold (or gems, like a diamond for an engagement ring), and your markup will not be double.
The point being — most Americans traveling the Caribbean, Central America, the US, and Canada are being sold total crap. Generally plated gold (worthless in that quantity) on top of a poor quality metal that is likely not pure silver but some amalgam of cheap metal that is going to tarnish and even if it doesn’t, it is still not resellable and no jeweler or pawn shop would buy it back.
The key to measure the worth of your gold is: is it worth this in resale at least, or will the value go up? If it isn’t, or won’t, am I OK with the kind of money I am paying for it? If you want the Tiffany name — fine. Make sure you’re really buying a quality diamond that isn’t just pretty because if you attempt to resell it you will not be getting what you paid AND — nothing hurts more than knowing you paid Mercedes Benz prices for a used Honda with no upgrades.
How to shop for gold
Ok, so you’re dealing with a local jeweler in your town who has brought his craftsmanship and relationships to your area. Or, you’re abroad, entering a gold soukh or a local shopping area where this is how things get done. The windows are caked with gold so yellow you’d think the windows were on fire, and your eyes are dazzled by gemstones in colors more vibrant than you’ve ever seen before and you are breathless with the beauty because you have never seen luxury and quality like this in your life.
And it’s true. You really haven’t, unless you’ve seen it under these circumstances or it’s a part of your family’s culture to obtain and wear gold for major milestone events in life, something your community has done for thousands of years.
So it’s time to order something. Here, everything is made by hand. No one is form cutting your bracelet from a pattern unless you’re doing something pretty standard (basic wedding band, bracelet, earring studs, etc.) They aren’t making jewelry at that scale here. It’s like the guy selling carpets around the corner and the guy selling leather goods down the street. Almost everything here is handmade. And now you’re really buying gold. Performing an act traders on the ancient trading routes of time.
The price of the shinies
1) There is one price you will be quoted, and it is an estimate only. All things, in this trading culture, are negotiable. The price of gold is one price in August. It’s another in January. Keep that in mind. The price is made up two prices:
Metal value (a fixed market rate as currency – it is universal, standard, and is applied to the weight of your item). You can find this price easily on the internet, and you can find it, if it’s a legitimate shop (pawn shops in America don’t count) as a sign on up on the wall, just like a money changer puts up rates. Here, there are rates for the various gold types. If this is a quality shop that knows what they are doing 14K doesn’t even make it on the board.
2) Artistry/craftsmanship. This is utterly subjective and to the discretion of the seller, who doesn’t make it himself. He owns the shop. He has the guys in the back doing the work and he’s taking his cut.
TOTAL: You add them together.
And now, the game is afoot
- A cartouche or your name in Arabic, if it is a common name, are not going to require much effort so be mindful to calculate how much you are being charged for anything simple or premade on the “craft” portion.
- Define the make and WEIGHT of a piece for custom; evaluate the make and weight for a piece you walk in and find.For custom designs, if you have jewelry at home now, weigh it and determine grams. Multiply that by material. White gold is most expensive. Never buy plated – you lose money and value. Buy solid silver, or solid gold, and minimum 18K. 22K is too soft for jewelry and 24K is the purest and most expensive but not something you are likely to wear unless it is not easy to lose and you wouldn’t freak out (financially freak out) at its loss (a ring is one thing, a thick bangle is another).But 14K is considered crap beyond the US. The reason a craftsman will be difficult to give you a price are 1) in the culture you haggle 2) they are counting on you not understanding how gold works abroad 3) it is difficult to define a price if you are not extremely explicit about weight. That is “I want an 18K white gold band with my name inscribed size 8.5 and a lily on the top and it should weigh no more than X grams.” They will weigh with their tools in store to calculate cost, then add “workmanship” on top.
- You can only haggle on the workmanship part. This is also the the subjective part, so really think about how much work something really took or will take. Was it just a chain they already had and made a tweak to? Chains take very little work, and so do common and popular patterns for neclaces and earrings (the simple gold bangle, for example, costs them almost nothing in time to produce).Price is always an estimate until you haggle in person. You can confirm the day’s market rate for gold online and a legitimate store always has it up on the wall like a money changer. Also before you pay, you must inspect for flaws and weight. If there are flaws you haggle the work price further. You must weigh to confirm the market gold rate so you pay for the actual value of your gold piece. Note, too, you may have asked for X oz or Y grams but this is an art, not a science, so they may end up slightly lower in weight or slightly more. In either case double check your price to be sure it has been adjusted accordingly. (Obvi, if you magically luck out on a lower price although the weight is a little over, I wouldn’t look a gift horse in the mouth).
- You can get haggling with deals like: if I buy 3 rings can I get the 4th free? If I bring my friend back tomorrow and we buy more, can we get 15% off? If I pay you in cash, can I get 10% off? If you’re a regular customer, always ask after the family and the business, and then after you shop and as you set pricing, bring up 10% off. 🙂
- For custom work, you need to be very very specific — like measurements, scale, samples to copy (literally bring cheap American earrings in, and they will copy them with real gold and jewels), pictures, drawings, etc., It’s an art, and they can’t read your mind. And they may demand a deposit to get to work on a custom piece and if you get all sloppy and change your mind or can’t figure out what you really want, they will keep it and the gold they didn’t sell to you, so make sure you know what you want before you start a project — this is an expensive project that can’t be done half-ass unless you’re filthy rich. In which case, enjoy!