Get the Highest Prices for Your Diamonds and Diamond Jewelry
What to expect when selling your diamond or diamond jewelry
While the timing may be right, selling your diamond jewelry can be a major headache. Unlike gold, which has a quantifiable melt value, resale prices for diamonds have no one objective measure, making it confusing and overwhelming for the inexperienced seller.
To help unravel the mysteries of diamond jewelry selling, and in order to know your diamond’s value, it is important to understand diamond values at the retail, appraisal and pre-owned levels.
Appraised Value When you are looking to sell your house or condo, you have an appraisal done by a qualified home appraiser. The value they come up with will be very close to the selling price you should expect to sell your home for.
Nothing could be further from the truth in the jewelry industry. Most appraisals in the jewelry industry are made for insurance purposes, which are normally given values of approximately 100% above retail. Jewelry stores will often provide you with appraisals at double the retail sale price. That means they supply an appraisal for $10,000 when they are selling the jewelry item for only $5,000.
The reason is that a jewelry appraisal created for insurance purposes, has to consider the full replacement value of the item in the years to come. So if the item was ever lost or stolen, not only will the insurance company be required to cover the full retail price of a similar diamond, but an identical jewelry item may not be available for immediate purchase and will have to be re-created, which would require custom fabrication. Over time there could also be an increase in metal and retail prices, resulting in a much higher replacement value in the future.
Retail Value There are many levels in the diamond jewelry supply chain. From mining, to cutting, to brokering, to jewelry crafting and finally to wholesale and retail sales. As diamonds and jewelry move along the supply chain, expenses like rent, advertising, employees, security, shipping, lab certification, insurance, the cost of the jewelry itself as well as the profit margin at each level drive the price up. So much like any other product, when you purchase a jewelry item at the retail level, the price you pay is obviously much higher than the value of the components alone, i.e the metal and diamonds.
Pre-Owned Value If you purchase a car, an appliance or a set of furniture the value will decrease with age. Five, ten or twenty years after their purchase, you can hardly get anything for them or you just toss them away.
A diamond’s value does not drop like a car or furniture. However, if you purchase your diamond at retail, no jewelry store or professional buyer can pay you the retail value for your second hand diamond, since when they buy, they buy wholesale. So the price they will be willing to pay needs to be less than the cost of the diamond at the wholesale level. Not only that, but since diamonds are a very expensive item to carry in inventory, and given there are so many sizes, shapes and qualities available in the marketplace today, many retail jewelry stores hardly stock any diamonds, but rather order them on consignment as needed. That means they do not own the diamonds, they simply ‘borrow’ them from a wholesaler and only if sold, they make the purchase. Since consignment carries no risk for the store, if the store was to purchase a diamond for inventory, the price has to be lower than the wholesale price of the diamond.
The reason this price is the lowest is because it requires an immediate outlay of capital in exchange for only the hope of a future sale. This involves taking on risk, and risk needs to be rewarded with a higher potential profit – otherwise, it’s not worth the cost of taking the risk. In addition, a jewelry store will only pay cash if they need the type of diamond you are selling. It may be too big, too small, wrong color, wrong shape or simply lower or higher quality than the goods they normally sell.
How much to expect So you see, in reality a diamond has many different “market prices”. The lowest of these is of course the “cash value” – the price a store, pawn shop or professional jewelry buyer will be willing to pay immediately to acquire a diamond without a customer presently requesting this diamond.
Regardless of whether you are selling your item to a jewelry store, a pawn shop, or a diamond buyer, you should not expect to get your money back from your original purchase price. In fact, if you paid $5,000 for your item at a retail jewelry store, you should expect to get anywhere between $500 and $2,000 when you sell your item on the open market. Remember, your diamond or jewelry item is re-entering the supply chain somewhere between the cutter and the broker, and the price you will be offered by any professional buyer will have to reflect that.
How can you maximize your sale Now that you understand what you can expect, you probably still want to maximize your sale and get the most for your jewelry item.
There are several steps you can take in order to do so -
1. Consider your options. If you are looking to purchase a different jewelry item, trading in is always your best option. Many jewelry stores would offer a very fair trade-in value against store credit, especially if the purchase is significantly higher than the trade-in value.
If you are looking to sell your jewelry item for cash, you have the options of selling to members of the public or members of the jewelry industry. Generally, members of the public should be willing to pay more for diamonds as they’re looking to save on retail prices, but the hard part is finding the right buyer. You may consider using classifieds, Craigslist or even eBay to try and locate a buyer, however not only does these outlets possess great risk of scams and fraud, think about how comfortable would you be meeting a potential buyer at a dark parking lot or shipping you jewelry item somewhere unknown.
If you are not in a rush, you may also consider leaving your item with a jewelry store on consignment, where you will get paid when - and if - the item sells to a member of the public. Unfortunately, that may take months or years, and you end up waiting for your cash. So if you want to sell quickly and safely with little fuss over marketing, the most likely option would be selling to a member of the jewelry industry.
2. Be Realistic and Ready to Sell. Sentimental value may raise the price of the item in your eyes, but a potential buyer won’t be so moved. Additionally, having unrealistic price expectations for your jewelry item is the fastest way to disappointment with any ultimate sale. Always consider the different market values of your item when evaluating an offer.
3. Do some legwork. Visit two or three shops to get a range of opinions; in the end, you’ll have a solid idea of the specifications and state of your piece, as well as market demand for it. Obviously, the more offers you get, the better your chances are of getting top dollar for your jewelry item.
Why an auction is the best option
An auction is a place where different buyers bid and compete for the different items, typically resulting in higher selling prices. Auctions are usually very exciting venues, having great appeal to buyers given their competitive and cutthroat nature. An auction basically does the legwork for you!
There are many auction services available for all kinds of products, but most are not targeted specifically for jewelry, and therefore appeal to a wide range of buyers, not necessarily interested or even familiar with jewelry. So using the right auction service is crucial to successfully getting the most for your jewelry item. Our auction service is different. It offers a quick, easy and transparent process. You get to work directly with us, and we get your item in front of hundreds of qualified buyers within the jewelry industry. Our professional auction processing team has processed thousands of items, and has helped many sellers get the best price possible for their piece. Our buyers are pre-qualified jewelry industry buyers, eager to bid and compete for your piece. We offer a quick online auction, during which you can view the process of your item and at the end, you decide if you would like to sell to the highest bidder. Once you decide to sell, your sale is guaranteed and your payment is processed within 24 hours! There is simply no better way of getting multiple offers for your item, quickly and risk free.
To learn more about our online auction platform, please ask an associate or refer to our auction service guide.
