Worthy.com has built a consumer-to-industry selling model
Consumers looking to unload used fine jewelry, watches, and loose gemstones have historically looked to their local jeweler for appraisals and acquistions.
Worthy, a new online marketplace built for consumers to sell their jewelry, diamonds, and luxury watches directly to a group of prescreened buyers, is making a play for that business online.
The e-commerce site is not consumer facing on the point-of-sale side; only prequalified partners are able to bid on items. The company says these buyers are largely diamond cutters, gold smelters, watch collectors, and other industry pros with the expertise to view the pieces as raw materials (when appropriate) rather than finished products.
A home-page screen shot from recently launched jewelry marketplace Worthy (courtesy of Worthy)
The selling point to consumers is that because the buyers are able to refurbish or melt down any piece, they will likely see more value in a piece than a general consumer might. And unlike eBay, Worthy guarantees the best “spot-market price” for the seller within a 24-hour period (once the company receives the item from the seller).
The company—which is headquartered in New York City and has an operations center in Tyler, Texas, and an R&D facility in Israel—asks sellers to submit a description and image of the item they want to sell. The site then shoots over an intial market-value estimate based on the description, similar item transactions, and the opinions of expert buyers.
When the seller agrees to the estimate, he or she ships the piece to the company’s Texas operations facility using a pre-paid FedEx overnight shipping label.
The on-site appraisers in Texas then clean and professionally photograph the item, preparing it for online auction. Prospective buyers are sent an alert, and a 24-hour auction begins soon after. Payment from the highest bidder is processed, and the funds are transmitted to the seller electronically.
Worthy charges a sliding-scale commission for transactions—seller fees range between 5 and 20 percent of the final price, while buyers pay Worthy between 2.5 and 10 percent of the final price.
As a business, Worthy also plays to buyers, offering a steady stream of pre-authenticated luxury goods to snap up in easy-to-navigate online auctions.
“We have created a total win-win solution for the sellers and buyers of pre-owned luxury goods that addresses the inefficiencies and limitations presented by current marketplace liquidity solutions,” said Ben De-Kalo, founder and CEO of Worthy. “Pawn shops, traditional jewelry stores, high-end auction houses like Christie’s or Sotheby’s and online auction sites such as eBay and eBid don’t pre-qualify their buyers, offer multiple bids, or guarantee that items won’t be sold below market value.”
And for consumers, says De-Kalo says the company provides two critical services: “volume and authenticity.”
De-Kalo, who’s an entrepreneur, investment banker, and angel investor, adds that the idea for Worthy came to him when “my wife and I were looking to sell her diamond necklace and use the cash towards a newer, better one. First we went to a few local jewelers and got low-ball offers. While they clearly explained to us the differences between retail and resale value, we thought there must be a better option.”
So the couple turned to eBay. “But low and behold, we were shocked by the fact we weren’t receiving any real offers. It was explained to us that being new to the platform, and thus not a “power-seller,” makes it very difficult to sell luxury items on eBay.”
In response, De-Kalo launched iPawn in 2010, which was one of the first upscale online pawnshops dealing in luxury goods. “From this experience, we felt even more individuals could be served by our expertise—with a focus on selling re-owned luxury goods, we knew a secured marketplace would be the best solution.”