This is a picture of a typical advt. published in print. It came out in the

middle week of February and is a perfect example to talk about the

current state of affairs in jewellery retailing. I have deliberately

blurred the name and contact of the jeweller because this isn't about

finger pointing but more about education. To make it simple I have

numbered the issues I will bring up in this post.

So lets

consider the advt. Its really straight out of a thriller and can set

your pulse racing by the time you finish going through it.

1)Bombay Rate Showroom

Price of gold in Bombay is calculated as (price of gold today * 22/24)

for 22k jewellery with additional making and wastage charges whereas in

Delhi the wastage component is included in the gold price and only

labour is charged extra.

2)Today's Gold Rate

The

gold rate of Rs. 9590 per 10 grams advertised during the second week of

February when the gold rate was hovering close to 12,000 is almost a

20% below market rate. You may rightly argue that you are being passed

the benefits of "frozen gold prices". Gold purchased by the retailer

when the prices weren't blood sucking.

3)Low, So Low Making Charges

Almost

as important as the "frozen" price of gold is the oh-so-low-making

charges. So low that its hard for even a seasoned bargain hunter to

come up with any reason not to give it a second thought.

4)100% Buy Back Guarantee

Usually accompanied with " Hum hain Naa, Behenji". This guarantee will unarm a naive or seasoned customer alike. A 100% buy back guarantee is sure to convince you of the value you are getting.

5)Rs.4000 per Carat Diamonds

Diamonds so affordable. Now who wouldnt give in to that.

Now consider these simple questions YOU as a consumer can ask.

1) Is It HALLMARKED?

Just

this question is enough to dilute the positioning, first 3 points in

the ad had taken. I have done some back of the envelope calculation to

show how this one critical question can make the gold look copper and

low making charges look a big sham in disguise. The economics of

selling below market price is questionable. I have raised this issue

earlier(Check out the related articles).

2) Is Buy Back equal to Cash Back and not Exchange Back?

It

is a guarantee of taking back the jewellery but assuming its going to

be a cash back offer can put you in soup. It might well be an exchange

only offer. This brings to the next question. If exchanged, Do I lose

10% of the value or 20% 0r even 30%? Beware most of the branded jewellery follow this practce for sure.

3) What color, shade are these diamonds for?

Knowing

that you get what you pay for is especially true in case of diamonds.

The diamonds at this price are usually brown in shade, which is not

clearly evident because they are mounted.

Marketing can be

cleverly used to disguise real issues like hallmarking, buy back etc.

Hope this makes you a more informed buyer.

Related Articles:

Handling Volatile Gold Prices: A Jeweller's Perspective

Take a hard look at buy back policy

How to avoid the Low Making Charges trap when buying jewellery