In its second-largest acquisition, Amazon buys the company for $970 million.
Refinement Services, a new company launched by Goldspeed.com CEO Neil Kugelman, offers a web-based system to let customers sell gold pieces to online jewelers.
Kay Jewelers is one of the first jewelers to use the web-based platform of Refinement Services LLC, a new company launched by Goldspeed.com Inc. CEO Neil Kugelman, that allows retailers to buy unwanted gold jewelry from consumers.
Refinement Services’ web-based offering targets jewelers and others looking to capitalize on a strong gold market and a cash-hungry public. Refinement Services processes the gold a customer sells to the retailer and sells it back to the commercial market. The proceeds are divided among the consumer and the jewelry retailer, with Refinement Services keeping a commission. Participating retailers also pay a small set-up fee.
Kay’s program is powered by Refinement Services’ software but branded on its web site as the Kay Gold Exchange. Refinement Services’ system lets a consumer go to the retailer`s web site to see a video of her jewelry being unpacked, spread out and weighed, with the weight of the gold immediately visible on a scale.
Sellers register when they make an online request at the site for a gold-selling kit that includes a prepaid insured UPS label. All packages are videotaped when they are opened, and registered sellers receive a password via e-mail that lets them view the video of their package being opened. “The customer sees their order being opened and weighed, so there is no question but that what they put in the envelope is what we received,” Kugelman says. Consumers are issued a check the same day their jewelry is received, indexed to the day’s gold market price.
Kugelman notes that refined gold brings a higher price in the commercial market than consumers would receive for selling gold jewelry pieces to local jewelers or pawnshops. The price difference between the two marketplaces is what allows both participating jewelers and Refinement Services to make a profit, he says.
Kugelman, who also is CEO of Refinement Services, says it took eight months to develop the web-based software for the new company, which launched last year. While he would not disclose their names, he said other retailers besides Kay’s are using the platform to buy customers’ gold jewelry. The company also is in talks with financial services companies, including check-cashing services as well as banks, he adds.
Kugelman also uses the technology to buy gold on his own site, Goldspeed.com, No. 413 in the Internet Retailer Top 500 Guide to Retail Web Sites.