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Re-sell Value


Scomi
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Hi,

 

I'm new to the diamond sceen and any help would be appreciated.

 

I'm looking to spend roughly 30K on a diamond for my girlfriend. From what I have understood, should I buy it from a high street dealer, I'll walk out with a ring that imidiatly has dropped up to 50% in re-sell value. However, if by using Blue Nile (or any other online merchant) I can obtain a diamond whose re-sell value i roughly the same as I purchased it for. Is my understanding correct?

 

Regards,

 

Scott

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In most cases no, but it depends largely on your selling skills and your access to buyers. Some people make much better merchants than others and some items are a lot easier to sell. Selling diamonds for BN's asking prices is not easy and there are dealers all over the world who work hard at doing just this with decidedly mixed results. You may turn out to be good at it but I wouldn't bet on it unless you are basing it on a solid understanding of your own selling talents.

 

Do not go into a diamond purchase expecting to EVER see your money again. Selling to a dealer at 60-70% of the BN asking prices is doing pretty well and that’s assuming that it’s the sort of thing that the dealer does well with. If you’re willing to do a consignment deal you can sometimes do a little better. If your item is damaged or unpopular or the dealer thinks it’s going to take them a while to move it you will realize less than this. Obviously if you overpay for it in the first place your resell ratio will change. Jewelry, as opposed to diamonds, is much more difficult to sell. In general, don’t expect to be able to sell the jewelry portion for anything like what it costs. It’s sort of like selling used clothing. It just doesn’t do that well in most cases.

 

At that price point the street dealers should be able to offer you prices that are pretty similar to BN and the other online merchants but each dealer sets their own pricing structure and designs their own business model. Asking for the big bucks isn't the same as getting it. Make sure you're really comparing similar items. There can be a wide range in pricing for superficially similar stones.

 

Quite a few of the dealers offer buy back and trade in type offers with the things they sell. If this sort of program is of interest to you ask about it. Read the fine print. It's always interesting.

 

Neil

Edited by denverappraiser
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I'd add a little to what Neil says.

IN terms of investment, there are other , more acceptable financial instruments that offer a better return historically.

BUT- over the years, I have softened my attitude a little about this.

In fact, there are many things we buy that will do far worse than a diamond for holding value.

Compared to a house, in general, a diamond is a poor investment.

Compared to a car? Well, a large, well cut, high quality diamond might actually be a better "investment".

Of course, you can't pick your kids up from school in your diamond.

 

But for people who bought large diamonds many years ago, some sort of return is possible.

 

Neil brought up the number one reason diamonds should not be though of as a financial investment- and that's the inability of consumers to sell the diamonds near market value.

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