4 replies to this topic

[Skins28]

I am not going to purchase another EGL diamond but I do want to know what this particular stone cost new. EGL 1.01 G VS1 Very good Cut. I do not have the cert in front of me, therefore I am unable to provide the Table #'s at this time.

I am trying to determine how much profit the store made when I bought this diamond a few years ago. This information will be vital for my negotiations with them for a new stone.


Thanks

[davidelevi]

A diamond like the one you describe is currently priced between $5000 and $5500 online (assuming the "Very Good Cut" is an EGL evaluation, and not a dealer assigned grade).

There's two problems with your question:

1. Since you purchased the stone "a few years ago" from a store (I assume a physical rather than online one), the cost structure of the industry has changed a fair amount, and while online competitors have caused a convergence of margins (on the low side), there is very little indication of whether at the time you overpaid or underpaid compared to a "fair" market price taking into account the cost structure of the store you bought from. This invalidates any projection we can do based on what the stone is selling at now, and makes it quite difficult to figure out what the margin was simply based on what you paid at the time.

2. The amount of profit they made (or didn't make) at the time is totally irrelevant. That money has long since disappeared, and neither you nor the dealer can change that amount. The variables that matter are how much margin the dealer is going to make NOW on the new stone (ignoring the part exchange deal), and how much the dealer can make on reselling your stone, given its intrinsic desirability and his stock at the moment.

Edited by davidelevi, 29 October 2009 - 08:51 AM.

[denverappraiser]

I'm curious. Even if we could somehow provide you with the dealers cost and selling price from when you did the deal years ago, how would this information be useful in your negotiations for the deal on a different deal now?

Neil

[jan]

There is no way anyone can answer that question accurately without seeing an invoice that the store paid for the stone. There is no way to tell what the source is that the store is using or how good of source that they use. They could be using a jobber or middle man, wholesaler or direct from the cutter.

[diamondsbylauren]

Hi All!

Skins- you mentioned that you would not buy an EGL graded stone today. I agree with that decision, especially if you want a diamond in one of the higher grades.
A question- I can assume you have knowledge of grading reports now that you did not have back then.
Did the seller inform you of the difference at that time?

Maybe that's not relevant- but I have found that a lot of the places selling "certified" diamonds are offering substandard reports as though there was parity with GIA.

In any event, depending on what it is you want to buy, you may be in a better position if you buy your new diamond from a dealer you feel more comfortable with.
Even if you sell your existing one on Craig's list- or maybe try and work a trade with a dealer that will provide you all the info.
As Davide pointed out, the business has changed quite a bit due to the internet.
You're likely to get that much a better deal on a new one so as to blunt the positive effect of trading back to the first place.

ON he other hand, maybe I'm reading this all wrong, and the first place is a place you trust and feel comfortable with. In that case, please ignore my advice.