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What is it Worth?

 

Of course, the main question the public wants to know is "What is it worth?"

Most often, the value of an Oriental Carpet is based upon the following factors:  Condition, area of production, age, colors, design, quality of wool, knot density (KPSI, RAJ, Line, etc.), rarity, at times provenance, and current market prices provided who is in ownership of the piece.  

We were over on another blog a few days ago and saw something interesting.  Although your typical entry/response regarding the value of a rug, perhaps the way in which it had been answered sparked our interest for this post.  We're curious if anyone else notices something about this:

"The carpet is worth about $... to you."

Catch the last part?  A pretty cut-and-dry way to approach the question: "To you"  If this is the "average Joe" submitting their rug in the interest of value, what does this "to you" mean? 

Part of this phrasing has to do with addressing a value chain.  The main way we approach value of a rug here is on three levels:  Private party, Retail, and Replacement value*.  This is neither an exact science, nor is it a blanket pyramid which may be applied to all rugs.  A loose example:  There are thousands of hand knotted carpets which sell everyday online which would conceivably never be assigned a retail or replacement value.  Simple reason being these are rugs which often may never be represented by your typical brick-and-mortar retail store due to extreme wear & tear, color run, and heavy commercialization.  

The phrasing of "to you" is what may best be considered a private party value.

So lets address a concern for typical situations.  Say someone purchases a 9'x12' carpet for $3,000.  As soon as the rug leaves the showroom does this mean the item automatically falls into the private party value range?  You lay the rug down at home brand new from the retail shop or online, and immediately loses resale potential by 66%? What about all the information rampant throughout the internet about how rugs only appreciate in value?

The majority of today's commercially available oriental rugs will likely not appreciate in value.  Additionally, the process of assigning value to a carpet is much different than say your typical interior furnishing:  In majority of instances, rugs and carpets are an "unbranded" item, which leaves value ranges varying greatly. 

Back to "Joe's" Rug.  When you purchase a carpet, it does not necessarily follow an ascending or decending value curve.  Price paid does not automatically fall into a new category of "private party" value unless actively pursing the interest of immediate sale.  Hopefully within this time frame you have the option for return, or purchased the rug with professional assistance  :)  

If a "retail price" is paid, often your rug may have a "replacement value"  Why?  What we consider "Retail Price" here at Rug Rag should be what a similar item of similar condition, shape, size, quality, design and colors has actually sold for in the past given your location and provided the purchase was made from a seller whereby marked final sale prices correlate with the active market in a fair and resonable fashion.  

If retail is what a given item would sell for provided the above criteria, then replacement value may also reflect the appropriate "retail value" (not inflated retail value) plus, the inclusion of time, effort and process of locating a simlar rug.  The exception to this may be instances whereby a rug or carpet is branded (e.g. a current, program line carpet with importer MSRP), where MSRP may indicate a replacement value although this is not always the case.

The problem with the above structure is private party, retail and replacement values may vary considerably from dealer to dealer depending on many factors including a rug's condition, age, desirability and other facets to the industry.  With the above being said, there still exists no single rule of thumb: However, it's our sentiment that unless the "average Joe" is actively pursuing sale of their carpet, the best indicators are active and current market prices.  Bear in mind, even some of the best indicators such as auctions also may present skewed information as a great deal of value in rugs with high "decorator demand" are fetching healthy hammer prices, pushing certain types of rugs into what may be considered "Retail Value" ranges +.

What's the best way to determine the value of your rug?  Short of bringing the carpet to your local dealer, we highly recommend making good use of our...

Oriental Rug Forum

 

*  Several reputable sellers we know in the business do not differentiate between retail and replacement value, and may consider the two one-in-the-same.  However, our this is our take on what retail value should be.  

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