Buying and selling the old-fashioned way
"Hey man, do you have a corkscrew?" asks a long-haired, pleasant fellow who has probably lived in the Williamson Street neighborhood for
Ricardo "Rick" Paoli, 51, owner of Rick's Olde Gold looks at him from behind a glass jewelry counter. "Man, you know I buy and sell gold and silver. Why are you asking me that?" After some back and forth, the friendly gent flashes a peace sign and leaves, but returns a few minutes later, this time with a corkscrew he found elsewhere, and an unopened bottle of wine. He asks for help uncorking it. Paoli sighs, complies, and sends the guy on his way. He shakes his head. "I can't ignore him," he says. "But I won't let him get out of line. He's been coming in here for years."
It's part of what makes Rick's Olde Gold tick – the people, the deals, and the respect the owner insists each customer demands, deserves, and, quite frankly, receives.
Upon entering the store, the visual stimuli of the two-room shop, cluttered with eclectic items – many valuable, some purely odd or handmade – sets the brain on overload. There's jewelry under several glass cases, furniture, musical instruments, stained glass, gum ball and slot machines, Asian statuary, Buddhas, brass giraffes, antique clocks, iron bird cages, and ivory, porcelain, and turquoise pieces.
Yet this is not a junk shop. Paoli himself meticulously arranges each item. "It takes a lot to make this place look like this," he says. "I like to arrange things, see things at ground level, then at eye level, and then high up. Dark things should have a light background, and visa versa. Items should be at least 12 inches high." For all of the arranging, he sells about one non-jewelry item a week.
Rick's is also not a pawn shop. The difference, Paoli explains, is in the licenses, rules, and regulations. Rick's Olde Gold buys and sells, but does not loan money or sell anything on consignment. All transactions are completed on the spot, at the counter, and once the store purchases an item from a customer, it becomes store property.
Paoli was once the operations manager for the Ovens of Brittany restaurants, and, in fact, still owns the corporation, name, and all the recipes. He left the restaurant in 1989, and purchased the Willy Street buy-and-sell shop in 1992. At the time, it was open three days a week and run by an older couple that agreed to sell him the business for $30,000, then upped it to $35,000 at closing, saying they'd revalued their inventory. Paoli laughs, remembering the transaction. "If you want something, don't ever let the five or eight percent get in the way."
And he wanted this business. He had checked into others ÃÂÃÂ¦ restaurants down the street, an upholstery shop. "I was ready to buy anything that was run poorly and had potential," he admits. At the time, the store was generating $33,000 a year.
Paoli has seen revenue increases every year since. This year, he says, Rick's Olde Gold is on track for $1.5 million.
It didn't happen overnight, and wouldn't have happened, Paoli insists, had he not been willing to adapt to market changes. Running the business takes, as he so adeptly states, "grandma-like friendliness, the tenacity of Pete Rose, the foresight of Nostradamus, and Wall Street adaptability."
For example, he explained, years ago, when the neighborhood changed over from gangs to students and young couples, furniture, ivory and oriental pieces, and '70s stained glass became hot commodities. Then in the economic boom of the late 1990s, jewelry took hold.
Now, in the post-Great Recession recovery, gold, silver, and other metals have become the cash cows.
"It's all about the metal," Paoli said, "not about the pretty jewelry anymore. It's, 'what is it worth?' in gold weight, and 'what are diamonds worth?' on the wholesale market, in bulk. The store pays sellers 80% of the value of the gold they bring in, measured in penny-weight and in accordance with market prices set by the Kitco Index.
Customers begin to file in.
A woman named Darcy dumps a pile of old jewelry on the counter that she and a friend collected from auctions, other thrift stores, and sales. Paoli's full-time assistant, John, uses a jeweler's loupe (magnifier) to inspect and weigh each gold piece, calculates the 80% price, and cuts her a check for $145. What the store doesn't purchase, Darcy will take home, dismantle, and reuse in her own jewelry business, or donate to thrift stores.
Then a young man comes in, smiling. "I'm here to collect my money," he says to John, and leaves with a check. He is what Paoli calls a picker – someone who goes around to thrift stores and garage sales looking for under-valued, under-priced gold, silver, or other items, which he turns in for cash. "In a good week, he might get between $200 and $300," Paoli says.
Another man walks away happily with a $70 check after John inspects and weighs two pairs of gold earrings the man's mother dropped off to the store the night before.
Nobody receives cash.
Typically, a nine-to-five day at Rick's might attract 25 to 30 customers and feature between $7,000 and $10,000 in payouts. For security reasons, the store must keep all items it purchases for 21 days before they can be resold. And while jewelry sales from under the display case can add up, the bread and butter of this business is clearly made every two weeks, when Rick's Olde Gold sells the jewelry it has purchased, in bulk, to large refineries. "They pay us 99% of the gold value we send them," Paoli says.
So what if someone comes into the store trying to sell stolen goods? "I buy everything," he says, "but I get a thumbprint on all transactions."
Indeed, in the bottom right corner of every receipt is a box for the seller's thumbprint. Provide a thumbprint and a valid ID, or don't do business with Rick's.
Almost daily, the store hears from police, asking it to be on the lookout for certain people, or items. That happened in March, when a couple of teenagers from Chicago ventured into the store with a gigantic batch of stolen estate jewelry. "I couldn't let them walk," Paoli said. He blocked the entryway while another employee dialed 9-1-1. A brawl ensued and spilled out onto Willy Street and the police nabbed one of the suspects. The other was reportedly found in Illinois. A dented, misshapen chair propped against a wall with the words "Willy St. Brawl, 3-31-11" scrawled on the back serves as a reminder of the event – only the second melee the store has had in 20 years, Paoli says, then shrugs. "You can't set yourself up and be afraid of your own place."
Paoli is extremely proud of the reputation Rick's has built over the years, primarily because he did it his way. "There are two different ways to start a business," he notes. "Get a $20,000 loan from five friends, propose your idea to the bank, get a loan, get a restaurant, order new supplies from catalogs, then get nervous as your costs go upÃÂ¦.
"Or, there's the TV Lenny/Rick Paoli Way," he smiles. "Buy a ring, sell a ring. Now you have more money for two rings. Eventually, you have enough money for liability insurance." He's proud of the fact that the store's jewelry cases were once used at a bakery down the street. "You have nothing to lose in the beginning because you have no money. You build a business with your hands and your heart and your blood, and you end up with an iconic Madison business. There are a lot of them around.
"It's not the business school approach," he laughs, "but it's the common-sense approach, and the old-fashioned way. It's about kissing up to a customer that comes in at the very end of the day and giving them the same respect you gave an earlier customer, even though you know there's nothing in it for you. After your 80th hour, you still give them the respect ... or you lend them $3 for gas money."
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