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 Post subject: How Much Do YOU Charge for an Appraisal
PostPosted: Sat Apr 05, 2014 10:13 pm 
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Looking for input first before I reply

You might be shocked and surprised by what I have to say and show.

But I want everyone's input first

And Lets Be Honest and Truthful :)

This IS NOT a Trick Question and There are NO Right Answers and Most Importantly No Wrong Answers

So Everyone Jump in and Post

_________________
High Sierra Gem Lab
La Shawn Bauer, G, G, GG, ASG/AGA, CGL/AGA, CGL/IJO, CDG/IJO, RMV, CM/NAJA



Coming Soon:

Bauer Gemological Products

From Simple Minds, comes Simple Answers & Even Simpler Solutions


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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Sat Apr 19, 2014 1:26 pm 
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How Much do YOU Charge for an Appraisal?

By La Shawn Bauer, G, G, GG, ASG/AGA, CGL/AGA, CDG/OJO, CGL/IJO, RMV, CM/NAJA

All too often I see Freshly Minted Gemologists, Graduate Gemologists, Certified Gemologists and F.G.A. 's that Instantly think that now they are Some-how Magically Licensed to Appraise Jewelry.

Nothing could be Further from the Truth.

They seem to think that since they began to work in the jewelry industry and they seem to have a small understanding of how things work they can now write appraisals and instantly make a living as an Appraiser of Gems & Jewelry.

Hold your horses now and let's Logically Think this Very Important Question through before you go hanging a shingle up with your name on it.

Flawed Business Logic #1.

A lot of Newbies quickly ask around and probe Their Market Area to see who their Direct Competition is and see how much they are charging for their appraisals and instantly think and wrongly reason that they can charge a little bit less than the Current Group of Seasoned Appraisers are charging and instantly make a living because they assume that if they can do it a bit cheaper than the others then more people/clients/customers will instantly come to them in droves because of Price Alone.

Think about this for a moment and really let this settle and sink into your naive brain.

If you believe this is the way to go then what happens when in a couple of years a new batch of Gemologists sprout up in your area and then do the very same thing you are doing?

They are going to under-cut you!

So you under-cut the older more seasoned appraisers and now you are doing it for 10% or 25% less than the Seasoned Appraisers and now a new One or Two or Five appraisers want to do the same thing and guess what, they under-cut you as well.

So what are you going to do to counter this problem of new so-called appraisers with ZERO Experience under-cuts the Under-cutter?

Are you going to Match Prices and Drop Your Prices even more to keep the clients/Customers you currently have?

Will you Honestly be able to make a living at lower wages now that someone else is now trying to Under-Cut you, after you Under-cut The more Seasoned Appraisers in your area.

Then Five years later another couple of Newbies come in and do this to everyone else again in a Vicious Circle of Under-cutting one another trying desperately to scrape out a meager living on almost slave wages because every few years a New would-be appraiser or group of appraisers think they can instantly jump into the deep-end and start swimming with the Big Fish of the Pond.

Do you all see where this is leading?

Is that Sustainable?

Can you truly and honestly make a living, a truly descent living and provide for you new girlfriend or boyfriend, a new baby on the way, a new car, a new house, mortgage payments, car payments, saving for retirement, saving for college funds for your children, Health Insurance not only for you but your wife or husband and children and on and on and on with the list of expenses that actually increase during the first 25-years of your Working career?

FLAWED Business Logic #2.

It is a Universal Perception that new workers entering into the work-force start at a lower wage and lower over-all income earned as to the workers who are more experienced.

We see this in just about every field no matter what, be in general laborers or Business Professionals.
A Starting Bank Teller DOES NOT make the wages of the Senior Bank Teller, Loan Officer or V.P. Or even the President of the Bank do they?

This holds true if you are a Doctor or Lawyer or a Factory worker working on the assembly-line.

They have to start at the Bottom and Slowly work their way up getting pay raises over a period of time and through increasing their knowledge of their chosen field they are employed in.

Think about this for a moment and keep reading.

Let's now Switch Gears for a moment and talk about, “The Cost of Doing Business” before we get to the Meat and Potatoes of How Much Do YOU Charge for an Appraisal.

Planning Ahead and Mapping Your Future Out

#1. The Cost of Education:

We all know that Education doesn't come cheaply.
The Price of Knowledge is Quit Expensive.
Take the Cost of Your Total Education for your chosen field and divide it by say 25.
As that is a baseline average of how many years you will stay in your career before you even begin to think about retiring.

#2. The Cost of Continuing Education:

Continuing Education is even more expensive over the Long-Haul of Your Career than your Basic Education, Especially in the Filed of Gemology, and Appraising Gems & Jewelry.
You have to take time off from work, making money and spend money to attend these Critical Educational Seminars and Events.

You have Travel Expenses, Airfare, Travel Time, Car Rental, Hotel Expenses, Food and Beverage, The Cost of Attending the Seminar, Educational Event.

For Most professional Appraisers THIS IS A REQUIRED COST TO STAY CURRENT TO KEEP YOUR Certification, Accreditation or whatever.

In most cases this is an Annual Cost / Expense!!!
Easily Topping $3,000.00 to $7,000.00 a year!!!!
and the reason being is not only do you have to add up all of those expenses but you should also take into account the amount of money you are losing by not working as an expense as well and your time away from the office and your family as well.
Because you now have fewer hours available to make your money and profits to pay for your expenses.
And MORE Importantly a PROFIT so YOU can actually make a descent Living, hopefully.

You can make More Money but You CAN NOT MAKE MORE TIME!!!
Remember This Above All Else!!!

#3. The Cost of Laboratory Equipment:

You have to have Gemological Equipment if you are going to Appraise Gems & Jewelry
and all of that is not cheap.

So you start with just the basic Gem Ident. Equipment what about adding more later?
How much a year are you going to set aside to purchase more and more equipment until you have enough equipment to have a Fully Certified Gemological Laboratory?

What is the Time-Frame involved to get to your Goal of having a Fully Certified Gemological Laboratory?

It better be less than 3 to 5-years!!!

If it takes you 10-years to get a Fully Certified Gemological Laboratory then what is the point, one third 1/3 to One half 1/2 of your professional Career is now over!!!

If you are going to do a Professional Job and Advertize that YOU are a Professional you better have the correct and necessary tools and equipment to do the job in a Professional Manner, Don't you think?

A 5-Stone, 7-Stone or 9-Stone Set of REAL Diamond “Color Master” Set of Diamonds, Camera Equipment, Photo Light Box, Microscope, Photomicrography Capabilities, Computer Appraisal Program, Additional Computer programs to help you do your job better and faster and more accurately.
The list is long and expensive.

#4. The Cost of Business Equipment:

Office Rental Space, Signage, Desks, Chairs, Computers, Scanners, Printers, Shredder, Paper, Report Covers, Printer Ink, CD's/DVD's

All of those little odds and ends add up quickly more than you expect, that is for damn sure!!

#5. The Costs of Running and Operating Your Business:

Building or Rental Space. Unless you are thinking about Operating out of your own home residence and if you do that then you have to deal with a brand new set of expenses and something you might haven't thought about, Security!!

Do you really want to endanger yourself and your kids with the possibility of a night-time armed home invasion because they (the Criminals) think you might have a lot of your client's jewelry in your home safe?

Let me tell you, if you work out of your home, YOU are going to be near the top of the List for Criminals looking for an EASY MARK!!!
BETTER RE-THINK YOUR PLAN!!!
Kidnapping or Hostage Situation........can you deal with that?

TAXES and FEES they suck the lifeblood right out of you and you can't bypass them no matter what.

Business License and Taxes, Business Insurance, Building and Personal Property Insurance, Liability and O & E Insurance, Utilities, Phone, Internet, Professional Dues and Fees, Professional Publications Subscriptions and Price Guides, Accounting Fees, Tax Preparing Fees.
We haven't even started to look at or even figure in other expenses if you have office personal on your staff or their wages or taxes or insurance.

#6. The Cost of Advertizing and Promoting Your Business:

Advertizing Costs Money and MORE IMPORTANTLY TIME!!!!

Do you do all the Advertizing and Planning Yourself? Do you farm it out?
If you do it yourself, once more, YOU are taking time away from Making Money to once more Spending Money and your ever growing small amount of Precious Time to Make Your Money!!!
That is kind of Counter-Productive isn't it?

How do you advertize, where do you advertize, do you track your advertizing dollars to see if it is really doing what you hope it will do?
If you keep track then that is spent time once more subtracted from you limited amount of hours available to do your work to make money.

Educating the Masses and Your Target Group:

Do you give speeches and Lectures to Professional Clubs, Groups and Organizations?
Loin's Club, Rotary Club, Professional Secretary Organizations, Professional Dental Assistants Organization, Professional Nurses Organizations?
Do you provide Continuing Education Class for the various Insurance Companies and all of their Agents and Support Staff?
Do you speak at Attorney Groups and Organizations on Divorce, Estate, Trust and other issues that you can be called upon when they deal with these issues on a Daily Basis?
MORE IMPORTANTLY!!!! DO YOU REALLY KNOW WHAT THE HELL YOU ARE TALKING ABOUT!?!?!
The Last thing you want to do is BULL-SHIT Someone because once they find out they will Black-Ball you and tell everyone else they come in contact to Black-Ball you as well.

What about Internet Presence?
Web Page? Domain Costs, Inserting and Up-dating your Web Content to keep it Fresh and New and not Old and Static?
Do you do all of this yourself? If you do you are burning and wasting more time!!!
YOU CAN NOT MAKE MORE TIME!!!! Haven't you learned that yet!?!?!

On-Line Videos? Educating the Consumer about Appraisals and How to Pick and Choose a REAL Professional from all the other Local, Regional or National Schlock Appraisers who have ZERO Education and ZERO Credentials in Valuation Science.

Is SOMEONE Locally or Nationally Highjacking and Stealing all of YOUR Content and Videos for their own use? What do you plan to do when someone does that?

Do you show your prospective Clients YOUR Finished Professional Work Product (Appraisal Report) as compared to your Local Competition?

Can YOU Prove you have a Better Product than your competitors?

Remember all of this takes Time!!!!! TIME IS MONEY, PEOPLE!!!

Most make the Grievous Error thinking they can do ALL of this after-business hours.

What about Enjoying your Family and Friends and more importantly enjoying and Living Life.
Why waste such Precious Time away from the wife, husband and kids and friends to do EVEN MORE WORK on your business after hours?

Is this Really What YOU Signed Up For!?!?!

LIFE IS WAY TOO SHORT!!!

#7. The Cost of Living:

The REAL COST OF LIVING is MORE EXPENSIVE NOW THAN EVER BEFORE!!
And the worst part is, it shows no sign of decreasing, ONLY Increasing over your lifetime
This is a Proven Fact!!!

Youngins start out renting at first, unless you are born into a Rich Family.
While renting you have to think about saving and putting away money to put a down payment on a house.

You now have a car and car payments and cars wear out so you have to replace that car once every 5 to 7 years that means Constant Car Payments, Insurance, Gas and Service and Maintenance Fees and Expenses, Taxes and Tags and Tires and on and on and on.

Next comes a wife or husband and then kids and we all know kids aren't cheap.

Look at the Current Shape and Health of the Economy.
The Crushing Debt Load Our Country is carrying.
Who is going to pay that Debt? YOU ARE and EVERYONE ELSE!!!

Can you survive a down-turn? A Lay-Off, a Slow-down?

Can you and your family survive on One (1) PAYCHECK?

Unseen health Emergency?

Are you saving and have a Rainy Day Fund / Account?
Along with a 401K account, Kid's College Education Fund Account, Vacation Account?
Did you BUY THOSE LOTTERY TICKETS YET!?!?!

OH WAIT!!!! What about Clothing and Dry Cleaning?
If you want to be a Professional YOU have to Dress and Act the Part as well.
Stage Presentation, just like Hollywood, is all about IMAGE!!!
The Image you want to project to your would be Clients / Customers, Jewelry Store Owners, Insurance Agents, Attorneys, V.I.P. Bankers, Trust Fund Planners, and the list goes on and on.
Nice Professional Business Clothes are not cheap and they don't last forever and they don't stay in style forever either.

#8. Are YOU a Fully Independent Appraiser or do you rely upon jewelery stores and their owners to send you clients?

Can YOU Truly make it as an Independent without any of the jewelry stores or their owners and employees sending you clients?

Do you Deal Directly with the Clients / Customers or Do you only Deal with the Jewelry Store and the Store Owner or Employees?

Does the Jewelry Store and the Owner Mark-Up your Appraisal Report and Charge their Clients more?
What is their Mark-Up? 50%, 100%, 125%, 150%, 200%?
Will the jewelry Store and the Owner Price You Out of Business because of their Markup to their own customers / Clients?

Do you have a written and signed Contract with the Jewelry Store and Owner as to all of the ins and outs of your so-called Business Arrangement?
Just a Word-Bond and a Handshake? (Gentleman's Agreement?)

Do you give a % (Percentage) of Your Fees to the Jewelry Store and those Owners for Sending Clients and Customers Your Way?

If so how much? 50%? 33%? 25%?

(Our Family Owns a Farm and we have Tenant Farmers who work and plant and tends the Fields, Crops and then they give us a % for using our farm ground. It use to be in the Good Ol'Days that we got 50%, Half-&-Half. Now it is down to a mere 25% and We have to pay 25% of all expenses as well, seed, fertilizer, irrigation, cutting, hauling, storage and on and on and on. PLUS!!! We have to Pay 100% of the Land Property Taxes!!)

Did the Jewelry Store and the Owner Set Your Fees or did you?

Who Really works for who?

Can You Really Trust Them, now or in the Future?

If You Raise your Prices and Fees will the Jewelry Store and Owner start looking for the next new low-ball appraiser and instantly replace you in a couple of years?

Once again, the New World Order of 2014 has and uses this NEW WORD way too much, “Sustainability”

Another Word everybody needs to jump on and seriously think about is “Longevity”.

Do you go and set up shop at various jewelry stores throughout the work-week and then move to the next store to do their work as well?

Packing and Un-Packing Time, Travel Time?
This instantly cuts in the limited number of hours you are available to make a living.
This is expensive down-time doing this on a daily basis.
You should keep meticulous highly detailed records of these missing hours and review them on a weekly or monthly basis and you will be shocked and horrified at how much Money you are losing chasing the elusive White Elephant.

TIME IS MONEY!!! You CAN NOT MAKE MORE TIME only MORE Money!!

Wear and Tear on YOUR Personal Vehicle and the costs associated with using your car so much during the week just to get you from location to location.

Did you take that into consideration in YOUR MASTER PLAN to Conquer the So-Called Competition who already has a Steady Flow of Clients at a Reduced Cost? Really?!?!?! Seriously!?!?!?!

#9. How are YOU going to Compete against the More Professional Seasoned and Experienced Appraisers in Your Area?

What Do You have that is So Special and So Unique that they don't have, other than your inexperience and foolishness?

Do you have a Fully Certified Gemological Laboratory?
Do you have a Fully Stocked Research Library?
Do you have a Superior Work Product (Your Appraisal Report) than them?
Do you have More Skills and Knowledge and Experience than them?
Do you have more Certifications, Accreditation than them?
Do you have a Better Advertizing Program than them?
Do you have a Better Business Plan than them? Not only for the short term but long term as well?
Do you have Better Hours and Longer Hours than them?
Do you have a Better Location than them?

So PLEASE Tell Me again, about YOUR Master Plan to Conquer and Crush the Local Competition on JUST PRICE ALONE!!!

And explain to me how you can Miraculously and Magically keep others in the very near future who will undoubtedly come along and do the very exact same thing to you as you just did to the ones before you.

Hummmm......are you now beginning to rethinking your Ultimate Master Diabolical and Ingeniously Simple Plan to Conquer and Crush the Competition by Price Alone?

The Funny and Sad Thing about The Gem & Jewelry Appraisal Industry is that it doesn't really teach nor educate their members how to Own and Operate and Run a Successful Appraisal Business.
They teach and educate their members on gemological issues and appraisal issues but next to nothing on Business issues and what works and what doesn't work.

Maybe that will change over time.

Sure, I see a few things and have attended a few sessions on various aspects of business and technology and such but nothing that is the Heart and Meat and Potatoes of Running and Operating a Hands-Down Winning Appraisal Business. Only broad vague strokes covering a few topics and subjects.

And Sadly most of the Older Successful Appraisers rarely share much less give away their Secret Business Knowledge and Hard Learned Experiences that they have gained through hard-work and more importantly hard lessons learned by the Costly Method of Trial and Error before coming across what works best for them.

I have a lot more to say but let this sink in for a bit before I write some more and talk and discuss a few other Subjects and Topics that are Relevant to the Original Question I asked at the First of this article.

“How Much Do YOU Charge for an Appraisal?”

But then again, MAYBE THE REAL QUESTION I SHOULD BE ASKING IS, “Do YOU Really Want to become a Professional Appraiser of Gems & Jewelry!?!?!”

More to Come

Later

La Shawn Bauer, G, G, GG, ASG/AGA, CGL/AGA, CDG/IJO, CGL/IJO, RMV, CM/NAJA

Now in the mean time I need you all to Design and Build a Spread-Sheet Listing all of your Personal Expenses and list them out on a Daily, Weekly, Monthly and Annual Columns.
List everything!!!!

Here is a Small Sample List of what you need to write Down and then add up

Apartment Rent - House Mortgage Payment
Apartment - House Insurance
Apartment - House: Utilities, Water, Gas, Electricity, Trash, Sewer, Phone, Internet,
Special Insurance for Expensive Items, Computers, Cameras, Guns, Jewelry, so-on-and-so-forth
Purchasing items for Apartment or House, Weekly, Monthly, Annually
Car Payments
Car Insurance
Car Taxes and Tags
Car Gas - Weekly and Monthly
Car Maintenance Expenses
Personal Expenses
Birthday Gifts, Christmas Gifts
Girlfriend / Boyfriend / Husband / Wife Expenses, Daily, Weekly, Monthly Expenses
Clothes - New Purchases
Clothing - Cleaning Expenses
Food Expenses at Home and Away, Daily, Weekly, Monthly
Coffee, Candy, Lunch and Dinner Out
Mad Money - Free Spending Money, Daily, Weekly, Monthly
Vacation Allowance and all of the Costs Involved with a Vacation
Hobby Expenses
Entertainment Expenses, Daily, Weekly, Monthly
401K Savings
Investment Accounts Above and Beyond your 401K Saving Plan
College Fund for Kids
Rainy Day Fund Saving Account
Emergency Fund Savings Account
Are You Saving for a Down payment on a House?

If you have Kids you need to start a Brand New Long List for all of their Expenses
Do You have Pets!?!?! Pet Expenses need to be listed as well

Now Your Business Expenses:

Rental Space Monthly
Rental Insurance
Rental Utilities, Utilities, Water, Gas, Electricity, Trash, Sewer, Phone, Internet,
Business Equipment
Business Supplies, Paper, Toner, Report Covers, CD's, Staples, and on and on
Lab Equipment Purchase / Replacement / Maintenance
Business Advertizing
Business Travel Expenses, Daily, Weekly, Monthly
Professional Fees and Subscriptions
Professional Education and Continuing Education Expenses and Travel to those Events

As you can quickly see this is only the Tip of the Iceberg!!!!

I will Write a lot more but you have to first do your home-work and fill in the blanks and make your Spread-Sheet and then once you do that I write some more using those figures so we can see the REAL Answer as to "How Much Do You Charge for an Appraisal".

Later

La Shawn Bauer, G, G, GG, ASG/AGA, CGL/AGA, CDG/IJO, CGL/IJO, RMV, CM/NAJA

Next We will Talk and Discuss "Time - What is Time and How Much Time Really Costs You".

What is Time Really Worth?

_________________
High Sierra Gem Lab
La Shawn Bauer, G, G, GG, ASG/AGA, CGL/AGA, CGL/IJO, CDG/IJO, RMV, CM/NAJA



Coming Soon:

Bauer Gemological Products

From Simple Minds, comes Simple Answers & Even Simpler Solutions


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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Sat Apr 19, 2014 4:42 pm 
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Posts: 657
Well said my friend!
In so many of our lives, the bullshit undercutting of our expertise/knowledge/income stream is common.
Right down the line to the poor bugger, who decides to buy a lawn-mowing business, and then cut not only grass, but price as well, to try and make a success of it.
I hope Misto reads your story, and appreciates that real estate valuation, and gems are not even in the same universe.
It's not quite the same, but the thing that is likely to make my lady get real pissed off, and leave the coffee behind to go back "downstairs", and pick up her jackhammer again, is when some-one looking at gems asks for some "cheap ones".
I can hear her saying under her breath, " you come down here, sweat, bang your head, hurt your knees/back/neck, get covered in dirt, get blisters, even thru the gloves, dehydrate, etc,etc, and then see if there is any such thing as a "cheap stone".
I hope that anybody joining the forum reads what you have said, and reflects on the sentiments you express.
Barry.


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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Sat Apr 19, 2014 10:13 pm 
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I think my price just doubled. :|


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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Fri Oct 03, 2014 2:13 pm 
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Location: Devon, UK
Good topic. One thought. Would the lower price not just indicate that they accept they are not as experienced?

In my local area there are a few experienced and established valuers. If I was asked why a client should use me rather than the others, for all but one I would say "because I work harder to keep up to date". The other guy? I can't compete, he's great. I just have to wait until he retires!

I'm not the most experienced, qualified or have the largest range of equipment, but I am trying to get there. The shop that takes the number 2 spot in my area uses a bank note checker as their UV light source! So they have no short wave UV, but more business than me.

Within 3 years, I'm hoping to have a lab set up that will equal, if not exceed the AGA requirements. But I'm sacrificing everything else to get to that stage. It would be one hell of a talking point.

I'm hanging back on the charges a bit, just to see what goes on with the rest. But yes, my charges are pitched lower than the established guy and if asked why, it's simply because he is more experienced, respected and is nationally recognised. I charge more than the number 2 guy as I feel I can give the client a better package.

That's all for now. La Shawn: I like your style and I'm using your comparison of lab equipment list as a template. Did you get the pyrography tool/hot point info? Now you'll be able to find out exactly who I am.

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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Wed Jan 06, 2016 12:58 pm 
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Undercutting has and will always exist . As someone looking into a gemolgy diploma , I cant find anything but negative comments .. Anywhere , on getting employment or it being nothing more than something of interest once you retire. Kind of sad really . Was hoping to have a go at it. The cheap Chinese products have ruined my industry and I'm looking at a course that has update seminars with some only in mandarin ? And I'm in Australia? I must be trying to jump out of the frying pan into the fire . Still thinking about it though . Maybe some one could sell me a success story?


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 Post subject: Re: How Much Do YOU Charge for an Appraisal
PostPosted: Wed Jan 06, 2016 1:02 pm 
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Great post too:)...


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