PHILADELPHIA — Digital commerce has been rough on the jewelry-resale business, including the little stores across Center City Philadelphia, where prices used to vary with the hopes of customers trying to raise cash by unloading small treasures and the street smarts of veteran buyers who knew what they could sell to melt shops or other buyers and keep a profitable cut.
“The internet killed everything. Now everyone knows the price before you come in. All the stores gotta be in the same price range, and everyone’s fighting for that same nickel,” says the owner of 8th Street Gold & Diamond Buyers, half a block from Jewelers’ Row, who does business under the single name Eric.
Jewelry and coin buyers have been among the last retailers to go online, says David Crenshaw, Georgia-based executive director of the National Coin & Bullion Association. He says it’s taken longer because fewer young, digital-native people have been going into the field, as Baby Boom-era collectors, hobbyists and practitioners pass on. “It’s been a challenge making collecting attractive enough, technology-wise, to draw younger people in.”
Practitioners say the pandemic brought a welcome spike of energy, as more Americans stayed home, inventoried items for sale, and even caught the collecting bug. Here’s how two Philadelphia retail gold buyers are working to feed that interest and build modern businesses in their trade.
Tech-first
A former Deloitte consultant who says he grew up in his family’s Norristown, Pennsylvania, metal-forming business, Allied Tank, Brandon Aversano says he was shocked by the low prices he was offered for family jewelry when he visited Philadelphia shops to sell pieces to ease the cost of his cancer recovery in 2022.
So he started his own online alternative. “We’re trying to disrupt an age-old industry with a tech-first solution,” says Aversano in the Newtown, Pennsylvania, office of TheAlloyMarket.com, his investor-backed, 12-employee, year-old online precious metals- and jewelry-buying start-up.
“It’s terrible what they’ve been paying,” Aversano said. “Jewelry is like cars: the minute you walk out of the store, it loses a lot of value. You’d think online it would be better, but what I found online is the same business model, with a lot of opacity as to how the market really works. I thought, there must be a clean, simple, digital solution for this messy business.”
Aversano raised start-up cash from an Asian-Canadian-American “angel” investors’ group, Unity Holdings. He made arrangements with precious-metals buyers and melters, including Reldan, at the Keystone Port Industrial Complex (the former U.S. Steel plant) in Bucks County.
He opened an office in nearby Newtown, Bucks County, where he says the local pawn ordinances allow commercial jewelry buyers to resell items faster than in big cities. He set up his own propane-fueled melting location for small items. And last June Aversano launched the website, promising customers better prices.
As of April the site had sold material worth $1.2 million for clients, many of whom sent their unwanted valuables to Aversano’s secure drop. Aversano says sales are growing rapidly, and he’s soliciting more investor cash.
Physical presence
In November 2021, Mark Schimel opened a gold-resale store in Philadelphia — not a crowded storefront around Jewelers’ Row, but an expansive suite of rooms on the ground floor of the BNY Mellon tower, in the city’s main office district west of City Hall, a neighborhood studded with brokerage and investment offices.
The store is the regional outpost of a national company, Stack’s Bowers Galleries, formed through a string of mergers over the past 25 years, and affiliated with A-Mark Precious Metals, a publicly traded company that posted gross sales of over $10 billion, much of it to industrial customers, last year.
Schimel runs the East Coast stores, including a newer, busier outlet in Boston, and another in New York, where a company predecessor started in 1933. “We decided a couple of years ago we were going to expand and build, going against the grain,” bucking the wider industry move away from “brick and mortar” stores, said Schimel, who is based in Philadelphia.
“A good segment of our community likes the physical presence,” he said. “We put a lot of time into the colors we pick, the music in the background, to bring their stress level down and help them trust the person at the counter.”
Schimel says coins in good condition are sold for close to their precious-metal value; the premium has always been less for jewelry and other collectibles, and there has been a long decline in the number of collectors looking to buy many items.
There was a collectibles revival during the pandemic, but business is still not back to the “lines around the block” that used to form at Center City shops like the one where he worked as a kid in the 1980s, when gold prices occasionally spiked and sellers hoping to pick up ready cash and buyers worried about missing out rushed to do business.
Schimel caught the gold bug early and worked for a popular Center City store (now closed) in his 1980s youth, driving the owner’s car to deposit items at a Delaware gold refinery, or carrying 100-ounce gold bars in a lunch bag up to the wholesale buyers on New York’s West 47th Street.
“It was safer than you think,” Schimel said. “Half the people walking around in that neighborhood were undercover cops.”
Schimel has a lot of experience explaining why the personal items customers bring in don’t fetch the prices their gold weight would suggest.
“No one will pay you the full spot market price for gold” jewelry unless it’s made by a handful of high-end jewelers, like Tiffany’s, that command a premium. Coins and bullion items fetch prices much closer to their intrinsic value. Gold and silver are still thought of in many places as a hedge against inflation — Schimel likes to call it “the only true form of money” — though “you don’t know what the price of gold will do in a few months.”
