4 replies to this topic

[sms]

Is there an industry standard or benchmark that is paid for a diamond referral?

I have a repair shop that gets a lot of work from one of the customers that they deal with through the repair shop's affiliation with a diamond appraisal entity. The repair shop would like to offer the diamond appraisal entity a referral fee for the work they receive from the diamond appraisal's entity other than the work performed on behalf of the diamond appraisal entity.

The diamond appraisal entity believes it is entitled to a share of the revenue the repair shop has received as a by-product of its work for the diamond appraisal entity.

What is a fair referral, or commission?

Anything authoritative out there?

Thank you.

[denverappraiser]

With several of the appraisal societies , notably ASA, it's an ethics violation to recieve commissions from referrals at all. Many jewelry stoes offer appraisal services as well as selling repairs, diamonds and lots of other things. Using outside suppliers is both reasonable and common and the relationship with those suppliers is entirely up to them but it's completely inappropriate for an 'appraisal entity' to describe themselves as independent while doing this. Is this entity something other than a jewelry store?

Many repair shops, jewelers, websites and other merchants use commission sales people and the compensation paid varies wildly from store to store. There is no industry standard. It can range from a few percent to more than half. It will depend entirely on the sales program and the various people involved. You are under no obligation to pay a fee, and they are under no obligation to refer you customers unless you've got some sort of contract in place.

Neil

[sms]

Thank you for responding.

The entity is a diamond appraisal and certification company. The diamond appraiser is a gemologist.

Would this additinal information change your answer?

[denverappraiser]

No.

I ask because some appraisers claim to be independent and this is part of their sales pitch while others are very proud to be associated with or even own a jewelry store. A jewelry store that makes a profit on the repairs and products they sell strikes me as both expected and entirely reasonable, even if they are delivered by a 3rd party while an appraiser receiving a commission for referring clients to a particular dealer or repair shop strikes me as inappropriate unless this relationship is made VERY clear to the customer.

Neil

[sms]

You have been very helpful.

Thank you.