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Tuesday, December 9, 2008

What's a Fair Price to Pay?

We all like bargains. When we buy something at what we consider to be below market price, it makes us feel good! We're one up on the world!

So, when we go shopping for sterling silver flatware, we hunt and hunt for the best deal. There is absolutely nothing wrong with this and, unless we're driving around hunting, it doesn't cost us anything. I recommend a more analytical approach. Before shopping around, I recommend developing a price at which you will feel like you have received proper value for the money you spend.

First, define what you're looking for, especially with respect to condition.
  • Do you want something that is "nearly new" in terms of condition or are you willing to live with abrasions and nicks from years of use?

  • Will the piece be a gift or for your personal use?

  • If it's for personal use, what's the condition of the pieces you already own?

Then, you might investigate the retail price at department stores or other retail sellers. In your mind, what percentage of the retail price would constitute a reasonable price for a used piece?

After you've considered these points, start your search. For this article, we performed a test search for a very popular piece, a Gorham Chantilly place fork. We made sure the seller indicated that the fork had the "diamond-P" hallmark on the back to so we knew we were comparing apples-to-apples.

This hallmark is Gorham's indicator for "place" size. Here's what we found:

  • The retail price in December 2008 appears to be $115.00. We verified this at several seller web sites on the Internet, including department stores.

  • We checked the web sites of three popular, reliable sellers of used sterling flatware. We have found that they can be depended upon to sell only "excellent condition" used pieces. These are the prices we found-
    - Seller 1 (very large mail order seller) - $49.99
    - Seller 2 (large mail order seller) - $51.00
    - Seller 3 (smaller mail order seller that also has a shop in a major city) - $59.00
    The average price of these three was $53.33 or 46% of the retail price

  • We checked eBay and found actual completed sales st these prices:
    - $38.95
    - $33.99
    - $32.00
    - $25.00
    The description of the cheapest fork indicated more wear so we dropped it from consideration. The average price of the remaining three forks was $34.98 or 30% of the retail price. The fork that sold for $32.00 was sold via the eBay "auction" format whereas the other two were sold via the "Buy It Now" format. The seller of the $32.00 fork had an eBay feedback rating below 100 whereas the other two sellers had very high feedback ratings.

Based upon this cursory research, a reasonable target price to set for a used piece in excellent condition would be between 30% and 50% of the retail price. Expect to pay toward the higher end to a seller with a very good reputation and an acceptable return policy. If you are willing to settle for a piece in less than excellent condition, a target of 20% to 25% of the retail price is probably appropriate.

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