| If perfect timing is a gift successful | | | | changes in the economy, the gold-buying |
| entrepreneurs have naturally, consider | | | | industry stands to prosper if consumers begin |
| Michael H. Gusky naturally gifted. | | | | to sell more of their gold jewelry. Aronson |
| | | | maintains there will be a certain portion of |
| The Weston-based businessman, who last year | | | | the nation's population that always wants to |
| sold his leading gold jewelry manufacturing | | | | sell jewelry. Gusky agrees. |
| company, Aurafin, to billionaire investor | | | | |
| Warren Buffett's Berkshire Hathaway, launched | | | | "I looked at how consumers struggle to sell |
| online gold buyer GoldFellow on Feb. 6. This | | | | jewelry," he said. "Retailers don't buy it. |
| came just as the price of gold was hitting | | | | Pawn shops aren't dealers in precious metals, |
| historic highs and consumers were paying more | | | | and local independent jewelers aren't there |
| attention to it. During March, his Web site | | | | to buy it, they're there to sell it. Some |
| reported 43,000 visitors. | | | | people don't have access to gold buyers |
| | | | unless they drive a distance." |
| Gusky's idea is to offer consumers a fast, | | | | |
| more secure way to sell their gold, platinum | | | | Gold-buying companies advertising on TV often |
| and silver; pay better than most competitors; | | | | pay consumers a fraction of what is fair, he |
| and boost business by educating people about | | | | said, and ask consumers to mail them their |
| the cash potential in gold jewelry. | | | | jewelry - only offering to insure it for |
| | | | $100, even when the items' value greatly |
| Advertising has primarily been via the | | | | exceeds that. Sometimes, they don't insure |
| Internet, taking prime spots with search | | | | it, leaving no trace of packages. Some buyers |
| engines like Google, which trigger his ads to | | | | also mislead by only posting what they pay |
| appear when consumers search for items such | | | | for larger amounts than most people have to |
| as plasma TVs and iPods. GoldFellow's | | | | sell, he added. |
| national radio campaign is to begin on 450 | | | | |
| stations in May, and TV spots are planned for | | | | Gusky: 'i'm raising the bar' |
| July. The campaigns center on "raising the | | | | |
| bar for gold exchange." | | | | "Everybody is in business to make money, but |
| | | | I was disappointed to learn some companies |
| "We want people to understand they can turn | | | | are taking advantage of people who need the |
| their broken and unwanted jewelry into money | | | | money the most," Gusky said. "I'm raising the |
| for other things by working with a company | | | | bar on how consumers can sell jewelry. The |
| they trust," he said, noting more wealthy | | | | time is right because of the price of gold |
| people are selling their gold - even | | | | and the public's increased interest in it. |
| Kruggerands and high-karat jewelry - due to | | | | The business should be more transparent." |
| increased awareness of its current high price | | | | |
| or the pressures of the slow economy. | | | | The Jewelers Vigilance Committee, a nonprofit |
| | | | trade association supported by the jewelry |
| Within the year, Gusky hopes to buy $4 | | | | industry, lists tips for selling gold on its |
| million worth of gold a month and do $1 | | | | Web site, and noted prices buyers pay for |
| million of advertising a month for the | | | | gold are not regulated, "so parties are free |
| company he started with his wife, Robin | | | | to negotiate a price that's acceptable to |
| Gusky, and friend, Janis Rafkin, former | | | | both sides." |
| editor of the Business Journal's SoFlorida | | | | |
| Magazine. GoldFellow's start-up costs are $2 | | | | To see what their unwanted gold is worth, |
| million, Gusky said, and it has seven | | | | consumers can print GoldFellow's free, |
| employees. | | | | in-bound FedEx shipping materials via its Web |
| | | | site, where the company posts daily what it |
| In the past month, GoldFellow bought $1.65 | | | | will pay per pennyweight ounce for gold. Each |
| million in precious metals from consumers. | | | | package is insured for $500 - or more under |
| The company processed 300 packages a week for | | | | special arrangement - at the company's cost, |
| an average payout of just under $700 each, | | | | and consumers can trace their mailings from |
| with some worth thousands of dollars. | | | | drop-off to delivery. The company videotapes |
| | | | the opening of packages, assesses the value |
| GoldFellow isn't the only South Florida | | | | of the jewelry by testing its gold content |
| company panning for business success in gold. | | | | and pennyweight, then posts its offers online |
| | | | for consumers within 24 hours. There, they |
| Cash4gold is competition | | | | can accept or decline it, and are paid within |
| | | | a day via check or direct deposit. |
| Pompano Beach-based Cash4Gold has bought gold | | | | |
| for eight years, now averaging about 20,000 | | | | On April 8, when the price of gold was $915 a |
| packages a month with payouts that range from | | | | troy ounce, Goldfellow was paying $15.53 per |
| $20 to $5,000, according to CEO Jeff Aronson. | | | | pennyweight for 14-karat gold when the |
| The company, which employs 65, owns a | | | | customer was selling five to 10 ounces, while |
| refinery. | | | | Pompano Beach-based Cash4Gold was paying |
| | | | $6.30. The five to 10 pennyweight range is |
| GoldFellow's competition also includes, Gold | | | | most typical of the amounts consumers have to |
| Kit, Broken Gold, US Gold Buyers, My Gold | | | | sell, Gusky said. On April 14, when gold was |
| Envelope and Sell-Gold. | | | | about $928 an ounce, Cash4Gold's site did not |
| | | | list that quantity range as an option. Its |
| Having sold more than 300 tons of gold | | | | price per pennyweight for 14-karat gold when |
| chains, bracelets, rings and earrings with | | | | the customer was selling 10 to 50 ounces was |
| Aurafin, which he founded in 1982, Gusky is | | | | $16.59, while GoldFellow's was $17.04. |
| seeing familiar pieces return to him as | | | | |
| changes in fashion leave much jewelry unworn. | | | | Aronson said pricing changes on Cash4Gold's |
| If Americans join their international | | | | Web site may be made several times a day. Its |
| counterparts in understanding gold has | | | | payouts fluctuate with any change in gold's |
| intrinsic value - not just as adornment - | | | | price due to the company's high volume of |
| they will learn to sell, and perhaps replace | | | | business. Cash4Gold's extensive marketing |
| gold jewelry regularly - selling when gold's | | | | costs also affect its pricing, he said. |
| price is high, Gusky said. | | | | |
| | | | Cash4Gold's client procedure is similar to |
| Gold's mostly upward price trend over the | | | | GoldFellow's, Aronson said. But FedEx |
| past 10 years has seen a troy ounce (24 karat | | | | delivery is not always used, there's no |
| 0.99995 pure gold) go from $300 at the | | | | videotaping of packages' openings, extra |
| beginning of 1998 to a record high of $1,030 | | | | insurance on packages whose value exceeds |
| on March 17. But, by March 20, gold fell to | | | | $100 in insurance must be approved and |
| $919 a troy ounce. Recently, the metal seen | | | | payouts made by direct deposit carry a |
| as a hedge against oil-led inflation and an | | | | service fee. |
| alternative investment to currencies was at | | | | |
| $928. | | | | "My goal is to bring disruptive innovation to |
| | | | the industry," Gusky said. "Gold is very |
| Regardless of gold's fluctuating price or | | | | misunderstood in terms of its value. |