Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com (Part 3)

Benny De-Kalo: Let’s take an example that will illustrate it. Jenny just got divorced after three years. When she got married, they had bought a $14,000 diamond ring from Steve, the retailer. Steve bought it for $9,000. Now, she’s deciding to move on. She wants to do something better with the money. She first goes to Steve because she trusts Steve. Steve says, “No, I can’t buy because I’m in retail. I’m not in the business of buying pre-owned items.”

He does recommend Jenny to go to eBay just as you mentioned. She goes on eBay and takes a picture. She also tries to describe the diamond to the best of her knowledge. Her knowledge is very limited because she really doesn’t know the color or the clarity. What she doesn’t know is she’s not alone on eBay. On eBay, there are diamonds listed for over $3 billion. 95% of those items do not sell. They do not sell because Jenny and the others are not power sellers.

Sramana Mitra: They don’t know how to describe the diamond or what creates the value of the diamond.

Benny De-Kalo: Precisely. That’s why there’s a lack of trust and there’s a friction between the seller and the buyer. If I’m a buyer and I see an item that looks okay, how can I trust Jenny? How can I know that this is actually 1.5 carat. I don’t know that. Jenny is not going to be successful and she won’t be able to sell it on eBay. She could go on Craigslist. It’s not easy. You’re not going to let a stranger into your house.

Sramana Mitra: It’s not a good place to sell diamonds.

Benny De-Kalo: You can go to an auction house, but most of the items that we deal with are middle range. We’re not dealing with $100 items like eBay, and we’re not doing hundreds of thousands of items. We go for the midrange. We get the item graded. What we say is, “First and foremost, you should know exactly what you have because we want to protect you when you sell.” We get the item shipped. It goes directly to GIA. Are you familiar with GIA?

Sramana Mitra: Yes.

Benny De-Kalo: It’s the most trusted and biggest grading company in the world. We’ll say, “Let’s see exactly what you have.” We get the grading report within the day. We put it up on auction with the GIA report and some images of the diamond. On the other side of the marketplace, we have hundreds of buyers. They look at the item and start bidding on it. Jenny can go to one jewelry store or two. She can also go to a pawnshop. She cannot go to that many places. At Worthy, we give her access to hundreds of buyers. By definition, we can get her the best price. By having this GIA report, we actually build trust between Jenny and the buyer.

This segment is part 3 in the series : Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com
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