January 20, 2018

Selling Diamonds: What You Need to Know

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Want to sell a diamond? It's not so simple. Read on for the different ways to sell your diamond, and their pros and cons.

The first thing to know is that you will not earn back what you paid. Not even close.

What a sentimental diamond ring is to you, is just... a used ring... to others. And people want a deal on a "used" ring.

If you get that, but still want to sell your diamond, then read on.

There are many ways you can sell your diamond ring. Some ways may get you more back than others. This article will explain which options best suit your needs.

Prepare for Loss in Value

What I am telling you may sting a bit, but it is important to know that unless you own a highly unusual or remarkable piece, the resale market is not strong. A diamond ring falls into the category of an emotional purchase and is not a savvy investment product.

You may be thinking: I just bought this, it's perfect and there are no faults that I can see. Why wouldn't I be able to get back every penny I paid?

The truth is, even brand new rings with low risk to sell (i.e., no flaws and a quality piece) present a steep drop in value from the original purchase price.

As a veteran re-seller of estate jewelry, I have experienced the decrease in value first-hand. Here's a run through of one of the pieces I sold:

I was commissioned to sell a diamond engagement ring on eBay with the following attributes:

  • Clarity: SI1 (slightly included, still good quality)
  • Cut: round solitaire (approximately ΒΌ carat)
  • Color: I (mostly clear, some warmth)
  • 14kt yellow gold prong setting/band

As you can see, this is a middle-of-the-road example. Not a complete knock-out, but certainly still in the game of being a beautiful ring. To make sure I had the information correct, I had the local jeweler do a professional appraisal, which came out to $595.00.

The ring (and others like it) sold on eBay for a mere $100.00! That's a decrease in value of just under 17% of the appraised worth.

How can this be?

Why You Will Not Sell a Diamond at Retail Value

People either need to make a profit or want a good deal. Here is why you will never be able to sell a diamond close to what you paid.

  • Retailers need to make a profit. Why would a retailer buy from you when they can buy diamonds at wholesale prices? A retail jeweler can only offer you enough so that they can make their usual profit margin (plus they have a storefront and employees to pay for). And that's the best case scenario. But in that case, they'd buy from wholesalers they already have relationships with.

  • Consumers want a bargain. A member of the public wouldn't buy a secondhand diamond at retail value when they can buy new at the same price. Plus, new options often have warranty protection, return window, and upgrade options. They'd only buy a "used diamond" if they're getting a great deal.

Most likely, you will lose 30% of what you paid if you successfully sell your diamond. And that's being optimistic. If you're selling to a jeweler, you may only get 50% of the value back.

If you understand that you're not going to get back anything near what you paid, but you still want to sell, keep reading.

How Do You Find a Buyer?

Since we know diamond rings lose a large piece of their value upon purchase, finding the right buyer to match up to your need may be tricky. Depending on the avenue you choose to sell through, you may be able to recoup some of that loss.

Selling to a retailer

If the ring was purchased through a reputable jewelry company, selling back to it may be your best bet. You also have the knowledge of the sales rep, who regularly deals with this and can guide the process.

You may have these options:

  • Buy back: Some retailers have a buy back policy where they'd buy the diamond back at a certain percentage of what you paid.

    Tip: Blue Nile is paired with Mondiamo, which offers you a cash price for your diamond based on the current selling price of a similar diamond on the site. You don't have to own a Blue Nile diamond to sell back to them. Mondiamo takes 15% of the wholesale value.

  • Trade up: Some retailers will only let you trade up. You can put 100% of the value of your diamond towards a new, bigger one. The downside of this is that you're not actually getting cash.

  • Fast sell: A jeweler may offer you a cash price to buy the diamond, but it won't be very high. Remember, they need to make a profit.

Be prepared with original documents, including return details, terms, etc. In this case, the salesperson will determine the price.

Did you know: Online jewelers usually have the most generous policies. A lot of online jewelers will even buy back a diamond that wasn't theirs.

Consigning with a local jeweler

Another option is to consign your ring with a local jeweler. This means that the jeweler will display your ring in their store and try to sell it for you. If it successfully sells, the jeweler will take a commission from the sell price (usually 25-40%).

This option saves you the stress of listing your diamond, but you may have to wait for a long time for it to sell. Pick a store that gets a lot of traffic and a jeweler you feel comfortable working with.

Online marketplaces

You can sell directly to consumers on an online platform, like eBay or Craigslist. Research what similar quality diamonds are selling for. But know that people buying from these kinds of sites are looking for good bargains, so you can't expect to sell your preowned diamond at a high price.

Work with only serious, trustworthy buyers. Also, be careful when you're meeting to exchange the cash/ring. It's a good idea to meet at a local appraiser's office. It's a safe place, and the appraiser can verify the ring.

Finding the value of what a similar diamond ring sold for on eBay is easy! Here are the steps:

  • Enter the text matching what you are looking for into the search field
  • Click the button that says "advanced" next to the search button
  • Find the section labeled "search including"'
  • Check the box marked "sold listings" and hit search

Preowned diamond marketplace

I Do, Now I Don't (IDNID) is an online marketplace that lets you list your preowned diamond and/or ring. It allows buyers and sellers to work through a secure platform. Here's how it works:

If someone buys your item, you have 7 days to send it into IDNID. The payment is held in escrow while their gemologists verify that the diamond is genuine and that the quality is as listed. If all checks out, they ship the item to the buyer and you get your payment.

It's free to list your item. However, if sold, IDNID takes a 15% commission.

A Pawn Shop

If you're in a big hurry, a pawn shop will usually give you cash for your diamond, but expect the biggest drop in price. Pawn shops are already expected to have low prices, plus, they need to make a profit. And usually, pawn shop owners aren't very knowledgeable about diamonds, so the offer may be even lower.

Auction

If you have a more valuable or unique piece, you can consider auctioning it off. Big name auction houses like Sotheby's usually only consider fancy-colored or large diamonds.

Online auctions, such as Worthy, have gotten popular too. Worthy picks up and grades your diamond and places it on their site. Then they invite thousands of professional jewelers to bid on your item. If the final bid is above your set minimum price, you'll receive the payment (minus commission).

The downside to auctions is that you don't really have control over the final price. But the advantage is that if your ring is special, it'll be seen by the right people who know the value.

How to Help Your Diamond Sell

Here are some final tips for a more successful sale:

  • Know your diamond's value. The first thing you need is to know what your diamond is worth on the current market. You can take it to a couple of local appraisers to determine the value. This will help you better evaluate the deals you're offered.

  • Get your diamond certified. Jewelers and buyers are more likely to purchase a properly certified diamond. A certification basically proves that your diamond is a genuine gem and that it's the quality you say it is. If you don't have your diamond's certification, you can send in your diamond to GIA to get an accurate report.

  • It may be easier to sell the diamond and ring separately. You may able to sell faster by just selling the loose diamond to a jeweler. Other people may not love your setting like you do, unless you have a truly exquisite or unique vintage setting.

    As for the ring itself, it's relatively easy to take it to a gold shop and sell it for scrap metal to be melted down. They can give you a price closer to the current market value of the precious metal.

Remember: The Resale Market Is Weak

Upgrading your original purchase by trading for another ring online is going to be your most financially lucrative option. Much like a new automobile, a diamond ring does not hold its value when you buy it. However, with a little bit of research, you can steer yourself in the right direction to make a sale. Good luck.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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