Internet auction sites such as eBay can be a cost-effective way for retailers to sell off old inventory or unload items that aren’t moving. But bargaining in the online bazaar requires a time investment of at least several hours a week, even if you’re listing just a few items. To make the venture worthwhile, busy jewelers must find the best auction sites and use them effectively. JCK‘s guide will help you find the most jeweler-friendly sites, let you know where to get help, and show you how to list an item for auction.
Use well-known sites. Analysts say go where the action is, such as eBay-the most widely used Internet auction site. “Don’t set up your own auction site or use a ‘backwater’ one,” advises Vernon Keenan, president of Keenan Vision, a market research firm in San Francisco.
Bidbay.com, headquartered in Tujunga, Calif., is also popular, according to Topnine.com’s general auction site category (Topnine.com ranks unique visitors to many Web sites). With three million registered users vs. eBay’s nearly 20 million, Bidbay.com fosters a cozy community, says George Tannous, the company’s CEO. “People stick around on our site longer than they do on eBay’s,” he claims. According to PC Data Online, a Reston, Va.-based research firm that measures consumers’ Internet habits, the average viewer to Bidbay visits for 2.2 minutes per page versus 46 seconds on eBay.
There are even some online auctions with distinguished industry names, including www.dickeranddicker.com. This auctioneer of higher-end jewelry hosts online and offline auctions, which can be viewed and tracked from its Web site. “Bidders know we’re credible,” says co-owner David Dicker of Beachwood, Ohio. “They know they’re getting value when they buy a piece from our auctions.” And by the end of this month, Dicker & Dicker’s jewelry auctions will increase from five times a year to every day, 24 hours a day.
Watch other jewelry auctions to get a sense of what’s selling. Most auction shoppers are looking for a bargain. Jewelers and analysts agree that mid-grade fine jewelry products-such as diamonds that are I-J in color and SI in clarity-sell best.
Many wholesalers touting lower-end jewelry sell on eBay. Most claim they list items at retail prices, thus not jeopardizing relationships with jewelers. Ted Samul, co-owner of Amber Gift in New York, has more than 400 jewelry auctions ending daily. In previous years, he sold amber and sterling silver jewelry exclusively to jewelers. Now he sells pieces to jewelers and consumers. He’s not alone.
Mike Dickson, vice president of PGR Gems, a wholesaler in Harrisonburg, Va., says his average retail sale on eBay is $50. “Shoppers expect better-quality goods in a jewelry store,” he says. He has some 1,500 loose stone auctions ending on a weekly basis.
Dickson knows first-hand that it’s tough to auction some jewelry-store items on the Internet: his family owns a store, also in Harrisonburg. “Typically, you don’t get the money you think you will for pieces on the Internet,” he says. Still, if an item has been sitting in a case for months, you don’t have much to lose by listing it at a fair price.
But Dickson doesn’t completely rule out selling big-ticket items on the ‘Net: “In the past month, I’ve had four $10,000 sales of tanzanites, emeralds, rubies, and champagne diamond briolettes,” he says.
Billig Jewelers, Marlton, N.J., has been listing items priced from $50 to $5,000 on eBay for the past several months. Steve Billig, president of Internet sales for the company, says generic items, such as diamond studs, can be listed at competitive prices online. Profits on auctioned jewelry range from 10%-50% above wholesale cost, depending on the piece listed.
Put consumers at ease. Internet auctions are the source of 80% of all U.S. online fraud, according to data from Internet Fraud Watch, a division of the National Fraud Information Center, Washington, D.C. To reassure bidders, list credentials such as a Jewelers Vigilance Committee (call 800 JOIN JVC for more information) or Better Business Bureau logo in your description area. Be honest in product descriptions, show several product photos from different angles, package pieces carefully, and deliver items quickly. If possible, include certifications with all gemstone purchases to heighten consumer confidence.
Offering an escrow service also can take some of the stress out of bidding by allowing shoppers to inspect products for a period of time before remitting payment. Escrow.com is one such service.
Letting bidders know you’re a professional jeweler can help boost buyers’ confidence. For example, in Billig’s product descriptions, he notes that his retail jewelry store has been in business for 15 years.
Getting paid. Contacting bidders and collecting money from them can be frustrating, say sellers. Usually, however, accepting payment from “winners” is simple. Most vendors take personal checks or money orders, but more are using online payment services such as PayPal and Billpoint, which set up electronic bank accounts for users. (See auction sites for information.)
Keep in mind that sometimes the time and effort expended for the auction exceeds the profit. Such is the case with some international auctions. An Indonesian customer “won” three items in Billig’s eBay auctions. But to insure and mail the pieces overseas was complicated with red tape and risky in terms of security for the jewelry. Billig wound up canceling the transactions because trying to mail the pieces to the South Pacific region was too stressful. The bidder was disappointed but understood Billig’s decision and didn’t leave negative feedback in Billig’s eBay profile.
Getting help. Established sites such as eBay provide thorough instruction centers on their home pages to help novice auction sellers get started. If you’ve still got questions, step into a chat room to get advice from other members. According to e-commerce experts, auction managers-such as andale.com or auctionwatch.com-can simplify the process for sellers who have lots of auctions running concurrently. (For the easiest auction setup, refer to our step-by-step instructions on pages 102-105, “How to List an Auction.”)
Additional research provided by Maria Miriam, JCK Web Manager