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Branded Gemstones
Published April 2009
By Richard B. Drucker, GG
President of Gemworld International, Inc.
A recent appraisal assignment on a “branded” loose gemstone, developed into a challenge in determining a fair wholesale and retail price. In this particular case, the client had been to a jeweler that undervalued the gem because a trademark was not considered. The assignment also raised the interesting discussion regarding the branding of loose gemstones. We are very aware of trademarked and branded jewelry, but when it comes to gems, can you brand a colored gemstone and if so, how would it be valued?
Certainly, after a gem has been set into designer jewelry that is trademarked, the branding process can be identified easier and valued accordingly. However, with gems, it is not so clear. If we were talking about a Glen Lehr torus ring or a Richard Homer concave faceted gem, or many other unique cuts that are available, the answer would be easy. Yes, these creative cuts have been designed, patented and marketed by individuals and are easily recognizable. Many of these craftsmen have enjoyed honors in the annual AGTA Spectrum award competition for their unique cuts, so they have earned the right to charge for their labor, fame, and demand for the gem. <br>
However, when the gem is a species/variety that is readily available, and of a standard cut, can a trademark be established and a possible premium? Well, that depends. If I decide to brand my own line of gemstones, say Richard’s Ruby™ for example, they would be branded but they would not carry a premium. If I develop my brand over time, especially if my brand carries benefits such as quality, guarantees, etc., then I might be entitled to a premium. Notice the operative word, might. It takes time to establish a brand and it takes a great deal of marketing effort. If my brand is accepted and people are willing to pay me a premium for my brand, then I have established a market with unique pricing associated with my brand.
An example of a line of branded gems would be those marketed by Columbia Gem House. They have managed to successfully trademark and brand several gems such as Grape Garnet®, Nyala Ruby®, Seafoam Tourmaline®, Fire Citrine®, and several others. Some individual gems are standard cut and some are specialty cuts of their own trademarked cuts. With these gems comes the name, quality guarantees, promotion, and possibly other details unique to each gem. For this, there might be a premium, often referred to as “added value” above the inherent properties of the gem. But the important thing to consider here is that if you are an appraiser, you need to do your research and find out exactly what these gems sell for—because they are branded.
So back to the appraisal assignment. When the gem in question was evaluated in our office, research for this particular brand established that the price paid was fair and represented a slight premium over our published gem prices in the GemGuide. We found several exclusive retailers of this brand so it was not difficult to defend the premium.
Whether it is a loose gem or a signed piece of jewelry, if any trademarks or brands exist, you must use due diligence and find out what those brands sell for in the appropriate market. As a tip for those that appraise, since a gem of standard cut may not be recognizable as a brand, be sure to ask clients for all the pertinent information and paperwork before you do the assignment and take notes for later. Many things can influence value and you need to know them all.
Richard Drucker is President of Gemworld International, Inc. Gemworld International is the producer of the GemGuide, a wholesale diamond and colored gem pricing publication since 1982. The GemGuide is distributed to more than 25 countries and is a standard in gem pricing, quoted in every major trade publication. For information on the GemGuide to wholesale gem pricing, or the GemGuide Appraisal Software, go to www.gemguide.com.
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