A new business will buy your unwanted gold at specially organised parties – but is such an enterprise sustainable in a country the size of Ireland?

‘WE’LL TAKE your gold teeth, but we won’t pull them.” It’s not often you hear the managing director of a new business come out with a promise like this. Richard Walsh, the person who would like your already-detached gold teeth, launched his new business, Goldparty, last week.

Walsh, who’s based in Athenry, Co Galway, has previously run an accountancy business as well as developing and selling 250 apartments in Budapest that sold for €30,000-€100,000. His latest venture, a concept that is well- established in the US, is a countrywide network of “gold parties”.

The idea is that you rummage through your jewellery box, the bottom of a drawer, a plastic bag or wherever else you keep any unworn, unwanted or broken gold jewellery. You take it to the gold party in your locality, get it assessed, weighed and valued at that day’s market prices. You then have the option to sell it on the spot, and be issued with a cheque for the amount it’s been valued at, or you can choose to hold on to it.

“I thought it was a concept that would work well in Ireland,” Walsh explains. He got the idea when he saw an ad for a similar type of party in the Chicago Tribune while travelling in the US earlier this year.

“I thought the quirkiness of it would work, the fact you could go to a party and leave with more money in your pocket than you had when you arrived.” Walsh needed someone to work with who had practical experience of the gold business. He found London-based Malcolm Magee, whose background is working in pawnshops in the UK – a business seeing a surge in trade from “all social classes” in recent times, Magee confirms. Magee will be training the people who sign up to be agents.

Walsh has already invested €18,000 in Goldparty and his plan is to train and establish about 70 agents in all 32 counties. He’s currently looking for people to sign up, and their newly established website, Goldparty.ie, is already seeing brisk traffic.

The website does not mention in its section on agents that each person who signs up to work as an agent must pay a fee of €3,900. This includes the necessary equipment (which is kept by the agent) to test and weigh gold, a marketing package, and Magee’s training programme.

If you sign up as an agent, you then must connect with someone in your county who will host the event. Walsh anticipates that the parties will primarily be held in people’s homes. “We’re not expecting people to serve champagne,” he says. “Modest refreshments.”

The deal is that the host receives 10 per cent of the total price of gold sold on the night, and the agent gets 5 per cent. The gold then gets sent to companies in Britain and the US to be melted down and recycled into the jewellery trade. Part of the training the agents will receive from Magee is to recognise and acknowledge the difference between a broken, unworn chain and a piece of gold jewellery that has an innate artistic value in its design. If you turn up with a fabulous piece of antique jewellery, the agent will advise you against selling it. You must be over 18, and presumably known to the host, to safeguard against the possibility of receiving stolen goods.

Walsh is expecting agents to hold in the region of three parties a week, with at least 12 people at a party. You have to wonder how sustainable the business model is for Ireland. While there is certainly unwanted gold out there that people will wish to sell, there are surely a limited number of rainbows around the country with pots of gold at the end of them.

There will be an average of two agents per county, depending on its population. Is there really enough unwanted gold in Leitrim or Carlow or Offaly to sustain the proposed target of six gold parties a week? The business model is thriving in the US, but they have the population size to sustain it.

Consider that agents will need to buy almost €80,000 worth of gold to just make back their initial investment of almost €4,000, since they make only 5 per cent on the total raised at each party.

“We see the business as being sustainable for three or four years, but probably not beyond that,” Walsh admits.

To see how the process of valuation works, I’ve brought along a gold chain bracelet I received many years ago as a gift. It’s been lying unworn at the bottom of a jewellery box ever since. I have absolutely no idea what it’s worth, which is probably the same level of knowledge as most people who go to gold parties will have. I don’t even know what carat measure it is, although I do know that the higher the gold content, the higher the carat, with 24-carat gold being the rarest as it’s pure gold.

MAGEE TAKES THE bracelet up and immediately starts cooing over it. He points out to me that each link is individually hallmarked, which is apparently quite unusual. He reads the assay marks and tells me it was made and hallmarked in Ireland, again not so usual.

I look at the bracelet with renewed interest and respect, but know I’ll never wear it – I just don’t like gold.

Magee is such a professional he can tell without testing it that the gold is nine-carat (37.5 per cent) gold – but he shows me the equipment the agents will be trained to use to assess the gold content.

All the agents will be trained in two methods. One is the traditional method of gold acid testing. The other is a new method, a microprocessor that involves placing the gold in a tiny clamp and letting the machine do the work for you. It’s all about measuring the resistance of electricity through the gold: the higher the gold content, the faster the electricity flows through it. There’s also a little electronic scale, to measure the weight.

My bracelet weighs 9.4 grammes, and Magee has already told me I mustn’t consider selling it, as it’s far too beautiful and unusual and, due to the design, literally worth more than its weight in gold. The day’s price per gramme for nine-carat gold is €7.04. Or at least, this is what Magee tells me is the day’s price for nine-carat gold, on the day I’m there.

In fact, this is not true. If you look at the company’s website, it states: “based on the weight of the gold and the gold prices on the day (provided for the agent by the goldparty.ie team in Galway), agents will offer guests cheques for the exact value of their gold as weighed and evaluated”.

The company set the pricesthemselves, to factor in a percentage of profit. The “gold prices on the day” are the lower gold prices set by the company, and not the actual market price of gold. Magee later confirms this by phone and says, “Our prices are pretty competitive for gold. It’s like walking into a pub – you’d pay a different price for a pint depending on the pub.”

It’s strange: even though I’ve never worn this bracelet – and, in theory, it makes perfect sense to sell it and buy some other piece of jewellery I might actually wear with the money – I don’t want to part with it. It was a gift from someone now dead, and I value the gesture of the gift more highly than I value the money I could make from selling it.

My little nine-carat bracelet is worth €66 as scrap gold, although perhaps more at what the actual day’s prices are. I don’t sell it.

I don’t know how many gold teeth an agent would need to sell on their five per cent commission before they’d make back their initial investment of almost €4,000, but I do know they’d need to sell 1,212 of my bracelets.