If you’ve ever considered auctioning off some of your jewelry but didn’t know where to start, this episode is for you. Gina D’Onofrio, a gemologist and appraiser with Heritage Auctions, joined the Jewelry Journey podcast to talk about everything auctions, from the way prices are set, to how auction houses make money. Read her conversation with host Sharon Berman below.
Sharon: Hello, everyone. Welcome to the Jewelry Journey podcast. Today, we’re delighted to have Gina D’Onofrio with Heritage Auctions as our guest. Gina is a gemologist and appraiser, and she has received the Master Gemologist Appraiser designation from the American Society of Appraisers. When it comes to jewelry, she has extensive experience in retail and manufacturing. What she’ll be talking about today is the auction process, which for a lot of us is really opaque and intimidating, and she’s going to clarify that. Gina, thank you so much for being with the Jewelry Journey.
Gina: Sharon, thank you for having me. I’m really excited to talk to you.
Sharon: Tell us a little bit about your career path. When did you become interested in gems and jewelry? Was it when you were a child or an adult? How did that happen?
Gina: I fell into the jewelry business by sheer accident. It was a part-time job. I was, at the time, singing professionally in Australia and needed a regular income. I worked for an opal business selling Australian opals to tourists and collectors, and after that, in retail jewelry in other capacities. Then, I studied gemology and was hooked. It was the most fascinating subject and I wanted to learn more, and it sent me on this long trajectory. Here I am thirty years later.
Sharon: On the side, I know that you have sung professionally and that’s one of your passions, but your career focuses on jewelry and gemology. What captured your attention about gemology and gemstones? Literally and figuratively, what did you see?
Gina: Probably what everybody sees. It was the combination of the beauty of the gemstones, but also the science and discovery, like how you can measure how light will bend through a gemstone and decide exactly what that stone is, or all the different spectral colors that gemstones come in. Gemstones are fascinating, and, of course, diamonds are as well, but I’m a color girl. I’m definitely more captivated by gemstones. After that, it was jewelry history, and anybody who has visited me and looked at my jewelry library has noticed that I am definitely interested in how jewelry design has evolved and the history of jewelry and manufacturing.
Sharon: Not only has jewelry evolved, but it’s also so intertwined with culture. People don’t understand that.
Gina: Oh, yes.
Sharon: When I say I’m passionate about jewelry, I think that people think I’m looking at ten-carat diamonds, and there’s just so much more to it, as you know. I don’t have to tell you.
Gina: Oh, yes. Those diamond trends can catch on, but those ten-carat diamonds are utterly boring to me, but to each their own, I guess. Part of the wonderful thing about working in the auction world is that jewelry has history. Quite often, you’re meeting the owner of the piece and they inherited it from their great grandparents, and that piece of jewelry is telling me the journey of their lives. It might have some Austria-Hungarian marks, or it might have some marks from Portugal, and it’s telling me about where that piece came from or whether they traveled or where they were born. It’s social history.
Sharon: You must hear some interesting stories and see some interesting pieces. So, tell us about your role at Heritage. What are you doing? Are you soliciting pieces? Are people sending them over the transom? How does that work?
Gina: It’s a little bit of everything. We have a portal on our website that a lot of people find when they’re Googling auctions, and they will submit their pieces of jewelry, photographs and information, and ask questions. There are a lot of people that knew me when I was an independent appraiser and know that I have moved to Heritage, so they will contact me directly through my private line. Quite often, people who already deal with Heritage will refer business to me, or I’ll just bump into them in the jewelry industry or social groups. It’s from everywhere. Sometimes, people bring pieces to me physically, or I’ll get on a plane to go and look at a collection, and that’s also what makes it so interesting and so exciting. I never know what’s around the corner and how it’s going to come to me.
Sharon: You’re in the Beverly Hills office. Are you handling the West Coast? Isn’t Heritage headquartered in Texas?
Gina: Yes, that’s right. They’re based in Dallas. The company started in 1976 as a coin auction house and it branched out to forty categories after that. The jewelry category is about twelve years old. If the founders are listening, they might get mad at me for not having that one down. Anyway, it’s roughly ten or twelve years old, and you can see that. You can go on our website and look at our back catalogue of jewelry. I am representing the West Coast, particularly southern California, but because of my connections, I find myself in different parts of the country. I do have to travel to look at jewelry, and I also travel a great deal to work for the jewelry previews or to attend conferences or to speak on behalf of Heritage.
Sharon: When you think of an auction, of course you hear about Christie’s. There are very high-end pieces that have gone for $25 million. For people on the ground like me, what do I need to know about the auction process?
Gina: Heritage is a little different, in that we are not going to set a very high threshold for entry. If you have some smaller pieces of jewelry to sell, if the minimum value totals $5,000 and we feel we have a market for it, you can definitely try the auction world and see how it works. You can trade a few pieces as an experiment, because once you start going through the process and you learn about how transparent it is and how much information you have access to on the back end as a consigner, you’ll find that it’s a lot of fun. We have a lot of repeat consigners because it’s just such a fun and transparent process, and they have a lot of confidence in how their jewelry is sold. A lot of our consigners are buyers as well, including myself. I consign my pieces and I also buy pieces.
Sharon: Do people stop by the office and bring you pieces? Are they sending them in? How does that work?
Gina: All of the above. FedEx will deliver packages. People will make appointments to come and see me at the office, or I might see them in their homes. I do travel to different parts of southern California on a regular basis. San Diego is usually about once a month, Santa Barbara and Palm Springs. I’m going to be in Phoenix in a couple of weeks, so even though that’s not California, that still falls under my territory. Arizona, Las Vegas, and everything that is closer to the West Coast. Also, because of all the conferences and trade shows, I sometimes meet people close to a conference that I’m attending.
Sharon: So, why should I consider the auction process? To me, it seems interesting, but it seems a lot more cumbersome than bringing a piece to a dealer and saying, “What are you going to give me?” Why would I consider the auction process?
Gina: Well, you would consider the auction process because there is an incentive for the auction house to get you as much money as possible because we’re partners in this. You are still the owner of the jewelry, but we are representing you and we’re getting a cut, so, because we’re getting a percentage of the sale, we want it to perform as well as possible. You are also able to watch it happen. We’re not hiding anything. The market is deciding what your piece of jewelry is worth. We’re trying to drive the market as much as possible through exposure and information and marketing. The piece sells for as much as it possibly can within that market level, and that’s why the auction market is, I feel, preferable to selling it directly to the trade or putting it on eBay. Yes, eBay is auction, but it is a very narrow type of exposure, because people cannot physically touch and hold the piece when they’re purchasing it. Whereas with our auctions, we’re a combination of the live auction market, where you can come to the preview and try something on and inspect it personally. It travels around the country and, in some cases, around the world, and I feel that’s really combining the best of both worlds.
Sharon: I was looking at auction estimates, and I mentioned this to a retailer once. I said, “I was reviewing the catalogue, and there were some really interesting things and what looked like intriguing prices,” and he said to me, “Oh, you can’t believe those. They set them low on purpose.” So, when I see an auction estimate, should I think, “Oh, it’s going to go for a lot more.” How does that work?
Gina: Your retailer is absolutely right. We do set a lower reserve because we want to attract as many bidders as possible. If the piece is desirable, it’s going to attract more bidders, and the more bidders that we attract, the more likely the piece is going to go higher and higher. If the piece is not desirable at all, then the market’s going to decide what they want to pay for it. But, in most cases, yes, we do want to attract bidders; we do want to tease you a little bit.
Sometimes people will get lucky. That’s why when you come to our previews, if you are in the jewelry industry, you’re going to recognize your dealer friends out there inspecting the jewelry, because they’re opportunists. They want to try and get the lower end, because there are private individuals attending the preview as well. Occasionally, a piece might slip through the cracks because there are not enough private individuals that are interested in it, but the dealers might be more interested in looking at the long game. They don’t mind holding onto it a little bit longer until they have a client for a piece that’s in our auction. So, we get all different types of bidders. We do start low, but it will always inevitably sell for what it’s worth.
Sharon: That’s interesting. I remember once I did go to an auction preview, and then I saw the same piece in a dealer’s case. I don’t think the dealer appreciated that I was like, “Oh, I saw that at the auction.” What about the reserve price? Who sets that?
Gina: We set the reserve, the jewelry specialist. When I meet with clients, I set the reserve and it is not my opinion, it is based on my observations of the market. What did it sell for in the past? What has something similar sold for? What has the market been doing with this type of jewelry? That will drive my opinion. Quite often, if I have a client sitting with me and they have what we call “vanishing appraisals,” where a retailer has provided an appraisal to a client for significantly more than they actually paid for it, we know that it is not realistic retail price. I have to sit down at the computer and go through auction archives and show my client what similar pieces have sold for. As much as I would love a piece to sell for more than they think it’s worth, the market is going to do what it’s going to do, and we have to reflect that in our auction estimates.
Sharon: If they say, “No, I want a higher reserve,” what happens then?
Gina: We will decline the consignment. However, I have been in situations personally, and I have seen my colleagues go through the same thing, where they wear us down. Sometimes, we’ll take in a piece at a very high reserve and we watch the page views, we watch how many people are tracking it, we watch and listen to opinions during the public previews and realize, “Oh dear, this is not going to sell.” Then, the piece doesn’t sell for the reserve and we basically say that piece bombed. In other words, the piece is exposed in a high-profile auction and it is in our auction database as unsold, and the seller of that piece now has a public record of it not being sold for a particular price. So, they have to hold onto it until people have forgotten about it.
Sharon: If somebody’s coming to you and you’re the expert who does this day in and day out, it makes a lot of sense to listen to your opinion. It points to the fact that so many people don’t listen to an expert’s opinion, but that’s just an aside.
Gina: Denial is a tricky thing.
Sharon: People always see skits where people have scratched their nose and the auctioneer says, “Now I have a million,” or whatever, so what are people paying?
Gina: So, if you’re selling, what are you paying? You are paying a seller’s fee. We’re charging you a fee to professionally catalogue, market, photograph and present your piece at public preview and insure it during the traveling previews. We’re basically charging you a fee to do all of that, and of course the auction itself. This doesn’t always cover the cost of the sale, but we certainly hope that it does. The fee that we charge you depends on the pieces that you are consigning to us. If you’re presenting something to me that is highly desirable and highly valuable, and you’re working with us on the auction estimates and you’re being realistic with us, we’re going to be much more amenable with the fees. If you’re presenting something to us that is fairly generic, is below a certain price point and is going to cost us a lot of money to bring to auction compared to what we’re actually going to get in fees, we have to factor that in. The standard seller’s fee is 20 percent, and that is going to be adjusted according to what is being consigned. We also charge a buyer’s premium. All auction houses charge a buyer’s premium. The theory is the seller’s fee will cover the cost of us bringing your piece to a successful sale, and the buyer’s premium hopefully will bring us some profit. It doesn’t always work out that way, but that is our ultimate goal.
Sharon: So, I’m paying when I buy. You’re covering the cost to the seller, and the theoretical profit comes from what I’m paying when I buy something.
Gina: Yes.
Sharon: You said that the combined value of what I’m bringing has to be $5,000. If I have something that’s worth $2,500 or worth $25,000, what’s the difference?
Gina: We have our traditional auction catalogues with beautiful photographs of the jewelry, and those catalogue sales occur four times a year. There are also the traveling sales, the ones that have the exhibitions in New York, Chicago, Dallas, Beverly Hills, and sometimes Hong Kong, and that particular catalogue sale is divided into two parts. The first half, which is called session one, is pieces that have a lower estimate of $4,000 and up, so the $4,000 flat cutoff point. Those pieces go through one month of exposure on the website and internet bidding, but then on auction day, there is a live auctioneer standing at the podium and we’re on the telephone taking our firm bids from people around the country and the world. It happens in real time in the traditional sense. When that stops, the second half of the catalogue goes live, but it is internet auction only, and there is an internet bidding platform that happens in real time.
Then we have other sales. We have weekly internet auctions. They’re very small and they happen every Tuesday evening. They’re for pieces that generally are below $2,000, although I’ve seen pieces sell for as much as $15,000 in an internet sale. For the most part, though, they’re for the lower price point. They’re a wonderful place to start if you’re curious to try bidding in an auction without too much risk, because they’re lower-value pieces and the pieces in the weekly internet sales do not have a reserve. Bidding starts at $1.00. A lot of my consigners get very nervous because they say, “I don’t want my pieces of jewelry to sell for $1.00.” Well, we’re not going to take something in and put into the auction if we don’t think that there’s a minimum value to cover our cost of bringing it to sale in the first place. That would be an interesting place to start, just to get used to how our website works, because we have a very developed online bidding platform. We were the first to do it with a combination of live and online. The company has gone to great lengths and great expense to build a sophisticated platform, and once you get used to using it, you can find the power of it. There is so much information at your fingertips just as an observer, even if you don’t want to participate in the bidding. You just need to create a username and password, and you have access to all the pricing and the back database.
Sharon: Wow! I’d be afraid to get addicted, but it sounds like a great way to go. You also mentioned Hong Kong. That reminded me, I was talking to an auctioneer at an auction house maybe six months ago, and they said they were holding back all of their really high-end gemstones because they were going to have an auction in Hong Kong. Just last night, I was talking to somebody who had talked to a London dealer about how Asians are starting to get very interested in antique jewelry. Tell us a little bit about the market and what you’re seeing.
Gina: That’s very interesting because I’m seeing the same thing. The Asian market was traditionally more focused on very, very high-end colored gemstones, and colorless and colored diamonds. The perception was they were interested in purchasing fine diamonds, gemstones and top-tier designer jewelry more from an investment standpoint, whereas here we buy jewelry for all kinds of reasons — to celebrate an event, what have you — but we may not be as focused on the investment aspect. They would not buy antique jewelry because they did not want to be perceived as buying secondhand jewelry, because culturally in Asia secondhand jewelry is a no-no, but recently I’m seeing a change in what our Asian buyers are doing at our sales. I’m watching them buy period jewelry, and they never did that in the past. I’m also looking at what all auction houses are presenting in their Asian-only auctions, and there is definitely more antique and period jewelry in these sales. I’m finding that the Asian market is getting more educated on the collectable nature of period jewelry, and maybe that stigma is starting to fall away with the younger generations. I certainly hope it is, because it’s such a fascinating part of the jewelry world. Period jewelry is to me the most interesting, and hopefully that continues.
Sharon: Yes, it’s very interesting. What millennials and Generation X think about antique and period jewelry is the subject of another podcast. Gina, thank you so much for being with us today. Everybody, that wraps up another episode of the Jewelry Journey. If you like what you heard and would like to hear more, you can subscribe on iTunes or wherever you download your podcasts. Gina’s contact information and Heritage contact information will be in the show notes, so if you want to talk to her further or you have some pieces that might pique her interest, then please get in touch with her. We’ll be back next time with another thought-provoking guest who will give us a professional take on the world of jewelry. Thank you so much for listening.
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