What is a Fair Price?
According to the Business Dictionary, fair and reasonable price is selling price that is fair to both parties considering quality, performance, supply situation, delivery time, and payment options. Fair to both parties. Here, however, I would like to take a closer look at the price issue from a buyer’s perspective. The fact is that sellers can and will take care of themselves. They are professionals in their respective field. Sales are what they do for a living. They perfectly do know how much this or that item costs. So, they know what is and what is not a fair price. Buyers, on the other hand, don’t know that quite often. Frequently they simply lack the necessary knowledge. And even more often it is because they are intentionally misled by false descriptions and inflated price estimates.
Recently I published a blog post that provides detailed information about how inaccurate descriptions, inflated price estimates, and other dishonest seller practices can lead to buying a fake or wrong item and to other unpleasant consequences. Here, I would like to simplify things a bit and concentrate on this one aspect – price. Fair price, more precisely. At the end of the day, this is what really matters – how much you pay and what do you get in exchange.
I am not saying here that every time something is sold 20% or even 50% more expensive than elsewhere it is a huge problem or unacceptable. Sellers have to pay wages, taxes, etc. They need to make a profit, no question about that. It has to be reasonable, though. If you, the buyer, end up paying 300%, 1000%, or even 5000% more than what the true market value is, how does that make you feel? Not very good, right? I know, these figures here might seem exaggerated. Well, they are not, unfortunately. Of course, from a seller’s perspective, you are the buyer of the year in this case. However, we are talking about a buyer’s perspective here. Your perspective!
An Unfair Price: The Sky’s the Limit
Sometimes the best way to illustrate what is right and fair is by showing the other side of the coin. Have a look at these outrageous examples of unfair pricing, and you will understand what I mean.
It is true that pink diamonds are among the most expensive diamonds. However, this holds true only as far as decent quality diamonds are concerned. Such low-quality (clarity “pique”) purplish pink diamonds are extremely cheap. The true market value of this one is $200 – $250. As you can see, the auction price has already reached $4000 and it is not over yet. It means that the “lucky” buyer will pay at least 16 times more than it is worth.
Another example of unfair pricing. Lead glass-filled rubies, also known as composite rubies, are nearly worthless. So, this unbelievably generous discount, just like the certificate, is merely an ugly trick aimed at convincing you that this is the deal of a lifetime. This bracelet’s true market value is $50 – $70.
First of all, it is important to note that this pendant is not vintage. This is a piece of contemporary jewelry and its real market price is $25 – $40. Here the buyer paid €440 + 9% auction fee. So, this is at least 14 times more than what the pendant is worth.
The buyer here paid $241 + 10% buyer’s premium. The real price of this Thai-made necklace is $45 – $65.
You can read more about these fake emeralds here. In reality, this is a fracture filled and dyed quartz. A fake emerald of this size and quality can be bought for $10 (including the “certificate”). The “happy” buyer paid €265 + buyer’s premium in the amount of 22.5% + €8 instead (€332.6 in total). That is staggering 40 times more than this item’s fair price would be!
This opal necklace was sold for $427 + an unknown amount of buyer’s premium. Its true market value is $60 – $80.
You can buy such earrings with treated black diamonds for about $200. The buyer paid $900 + buyer’s premium 19% instead. The price estimate here ($3,300 – $6,600) is absolutely ridiculous. It is also worth noting that these images are severely photoshopped. Thus, the real product won’t look that glossy and perfect. In reality, black diamonds tend to have quite a lot of imperfections.
These opaque, low-quality diamonds are extremely cheap. The true market value of this one is around $100, not €4500 + 9%. So, the buyer paid shocking 55 times the price! Also, pay attention to the exaggerated expert’s estimate.
Such a bracelet costs $40 – $60. The buyer paid €282.4 in total (the winning bid + buyer’s premium) instead.
The exaggeration of the price estimate ($2,200 – $2,400) is simply unbelievable here! The true market value of this pendant is $10 – $15 only.
Yet another example of unfair pricing – the true market value of this diamond is $200 – $300. As you can see, the auction price has already reached $3000 and the auction is not over yet.
The true market value of this ring is $15 – $25. So, it is nowhere near the appraised value ($450) or the winning bid ($125).
First of all, this is a lead glass-filled ruby or so-called composite ruby. Basically, it is worthless. The setting itself is worth approximately $400 – $500. It is definitely not worth what the buyer paid for it. Apparently, the buyer was not aware of this ruby’s treatment method (the description does not state that) and its true market value. The seller of this item, English Excellence (Barry), is a kind of person that requires to say a few words about.
Barry describes himself as a professional who has been in the jewelry business all his life, a respected member of the community who has reached his retirement age. So, Barry is about to retire and this is your last chance to take advantage of one of his terrific offers – that’s the message. Barry also makes it clear that “we guarantee the authenticity of all our items”. In reality, they are constantly selling items with worthless glass-filled composite rubies and cobalt-doped composite sapphires, not disclosing the truth about these gemstones. Moreover, they have sold numerous rings with fake emeralds (fracture-filled and dyed quartz) as well, claiming those are natural emeralds. Thus, if you have bought anything from English Excellence, you can be pretty sure that the only part of your jewelry that is worth something is the setting itself.
The true market value of this wristwatch is €70 – €90. The “lucky” buyer paid €350 + 9% buyer’s premium instead.
A blue topaz like this can be purchased for approximately $20 – $30. Apparently, the seller did not consider €189 to be enough to let it go.
Yet another dishonest seller trying to convince us that this is a natural, genuine emerald. In reality, this is dyed beryl that is worth next to nothing. The true market value of this pendant is $15 – $25.
Real blue sapphire… You bet it is not! This is a cobalt-doped glass-filled sapphire, also known as a composite sapphire. These sapphires and lead glass-filled rubies are in the same price range. The true market value of this ring is $20 – $30. The buyer paid €280 + 9% buyer’s premium instead.
The truth is that every emerald is green beryl, but not every green beryl is emerald. You can read about the difference between the two here. For the time being it suffices to say that green beryl is substantially cheaper than emerald. And this one here is light green beryl, not emerald. The true market value of this ring is $700 – $1000.
Fair Price Issue: The Conclusion
I could go on and on with these examples. There are literally millions of them. I have covered eleven auction sites and online shops here, but there are many more of them. Each of them sells hundreds and thousands of items at unfair prices every week, and buyers overpay millions of dollars each and every week. So, this is not some kind of phenomenon happening from time to time. This is a constant pattern of seller behavior, and you are paying for it. If you think that the situation with brick-and-mortar stores is any different, you are wrong. You are equally wrong if you think that this problem is limited to jewelry, gemstones, and wristwatches. It is not, unfortunately. This is why smart shopping is so important. So, if you want to get a fair price, you better be a smart buyer!