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jake21

4 Carat Vs1 Guestion

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I am trying to sell an old platinum diamond ring. Wont go into the reasons. Been in my family for some time. made some inquiries about 4-5 months ago and approached some buyers in New York. Got a allot of conflicting info and offers so I decided to wait and re-visit the task. About to try again and thought I might glean some better info here.

 

The diamond was both GIA certified and IGI appraised for insur value.

Emerald cut 10x8.3x5.4, 4.03 carat, VS-1, F, good polish & sym, no fluores, 71%table. 64.9% depth, Medium-slightly thick girdle, same on culet.

3 corner inclusions that been appraised as negligible.

I think the current Rapaport value is just over 30,000 per carat.

current wholesale is around 80,000 or it starts around there, but I dont really know.

 

4 months ago I was offered 60,000

and yesterday I was offered 65 on a consignment basis.

those have been the best offers so far.

 

My question to the forum is how do I sell this for something close to wholesale or better, and how do I find an honorable merchant to deal with, if should that be part of your recommendation.

 

thanks

 

jake

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$60k is actually a pretty strong cash offer. Rap is irrelevant to the situation at hand and ‘wholesale’ is the price that dealers would be consigning in a store for when a client asks for it. That client may be another jeweler, a consumer, a collector or a designer. The store, if there is one, will then add their piece and everybody gets a sale. Precious few dealers are going to be interested in carrying a stone like this in inventory because emerald cuts are slow movers at the moment and big emerald cuts especially so they will only buy it for cash if they can get it for a low price where they can afford to wait. This leaves you two choices. You can direct retail it yourself if you’re good at that sort of thing or you can hire someone to assist you with that, presumably a dealer and presumably for a commission. I’m going to guess that the former isn’t a realistic option or you wouldn’t be here asking the question so lets stick with using a broker as the most likely option. You can, of course, negotiate their commission rate but it’s worth noting that the best salespeople are rarely the cheapest. Assuming the plan is to sell it for $80k based on your numbers, the folks you’ve talked to are looking for about an 18% cut. That’s a tad high but not out of the range of reasonable, especially if they’re good at it and will actually result in a sale. Consigning it to a dealer who doesn’t actually succeed in a sale does you no good at all. This will not be an especially easy item to sell and they may need to discount in order to move it.

 

By the way, ‘wholesale’ isn’t really a very meaningful term on items like this. A huge fraction of the people who are actually making sales on these things call themselves wholesalers and the days when a store could get a 50% markup on something like this are long gone.

 

Neil


Neil Beaty

GG(GIA) ICGA(AGS) NAJA

 

There's never a crowd when you go that extra mile.

Professional Appraisals in Denver

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Interesting. Thank you for the response. 60k was my best offer on 47th street...Maybe I am somewhat ignorant on the intricacies of the diamond business, but I do not think I am ignorant on the value of that offer, from that street. Of course, there may be some "good" merchants still doing business there but unfortunately I haven't met them. When the guy making the 60k offer took this diamond down below the counter to polish it on his shirt tail, I almost went berserk on him. 15 minutes later I was at IGI getting the stone verified and matched to the GIA certificate, because I was so certain something bad might have happened, and I am pretty sure it almost did. fortunately, it didn't, and here I am with the same stone trying to see my way clear to a fair assessment of how to proceed. 80k is the low end, 120k is the high end on wholesale. Insured value on this stone is 159k. If the gent who recently offered 65K is taking a high 18% commission, then he's likely selling at 79k to another merchant. Right? right! So, why cant I sell to a merchant for the fair wholesale, on the low side, for this stone? How do I find them, where can I list this stone. 60K is a fair offer from a merchant who is selling to another merchant, using the low end market value for this stone, and thats not really helping me.

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You are right, but like every fairly illiquid market, diamond traders put a rather high price on transactions with unknown parties - which you unfortunately are.


Davide - Specialised Consumer Information and Assistance,
Diamonds by Lauren (http://www.diamondsbylauren.com)
davide@diamondsbylauren.com

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Ah, the real question is what is the guy doing for his 18%? Maybe nothing, maybe a lot. This is not the sort of thing that sells terribly quickly and the worldwide market demand for stones like is on the order of a few per year. This goes right to the heart of what salespeople and merchants in general are good for. They can get lucky and stumble across a buyer, they can convince someone to buy it who might have bought something else, they can convince someone to pay more than they might have otherwise. Good salespeople grease the wheels of commerce and bad ones are an interference. Sometimes it’s luck, sometimes it’s skill, sometimes it’s connections, sometimes it’s just a matter of knowing what they’re doing. Rarely is it a matter of listing it in the right place and waiting for someone with a bag of money to come along.

 

You are making an awful lot of assumptions about pricing and things like the wholesale and retail marketplaces as well as what constitutes a high and low price for a particular market. I’m not going to get into that issue involving a stone I’ve never seen and with a client who isn't paying me but you might want to discuss the market and the related topics with the expert who provided you with this information. Presumably it was an appraiser at IGI but you may be using a ‘4 out of 5 jewelers said xxx’ sort of approach. I understand that selling diamonds is a frustrating process and you’ve been given a $100,000 range of ‘values’ without explanation of any of them. This is a disservice to you and you need to pay attention to your sources. You are right that there are lots of sharks out there and that 47th street has more than their share. Pay attention to who you are using for information sources and don’t rely on those you consider to be unreliable. Free advice on an Internet forum isn’t a good approach either by the way.

Frankly I think you need to find a better appraiser.

 

You might consider one of the major auction houses as a marketplace. They generally work for about 15% although there are some stealth fees for photography and such. They have sales including items like this several times each year in New York, London, Hong Kong and elsewhere.

 

Neil

Edited by denverappraiser

Neil Beaty

GG(GIA) ICGA(AGS) NAJA

 

There's never a crowd when you go that extra mile.

Professional Appraisals in Denver

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Thanks for the response again. The auction houses are a good suggestion. I am curious if there are any listing services that merchants check into that are not exclusive to the industry? Concerning my #'s, I think its fair to say they are accurate and not unreasonable. Most all the offers have been reflective of the appraised value and the Rap if you factor in commissions etc... If I can sell to merchant without 10 other merchants in between that would help. All the buyers I have met disregard IGI out of hand. Understandable at face value, but its also too easy to accept why. Thus far I have learned the most about the stone and its particulars as well as the industry and how it works from the time I spent with the singularly up front and professional people at IGI. The numbers are not "relative". They are relative when folks take advantage of them and claim the inscrutable this or that factor about what a stone is worth. A little over a year ago this stone could have moved at 120k, and thats what they tell me when they offer me 60-65. 115-120k was also the high end appraised value from IGI.

80 is the low end, obviously, not 60-65. We don't have to walk on this topic any more, but if someone has any other helpful suggestion I would be happy to check it out. Thanks

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The reason IGI is being disregarded is their value conclusion and their stated purpose. Their report is not intended as an advertisement to convince buyers of something, it’s intended to give you the client some useful information for whatever purpose it is that you told them. Based on your first post, that was to provide documentation and funding for insurance purposes. I would fully expect a buyer to base their bid on their own expertise or their own experts, not yours. It's like getting legal advice from the opposing council. There are definitely some good people at IGI and it sounds like you’re pleased with the service you received. What you said in your original post was that you had an IGI insurance appraisal. This isn’t useful for either the buyers purposes or yours. It turns out they provided more than that, which is good. Ask them what they think an effective consumer resale marketplace would be and how you can tap into it.

 

How much it theoretically was worth a year ago is even more irrelevant than the insurance replacement value now. Your big variables are what market will you sell to, how will you set your price so that you are reasonably likely to result in a sale and what commission, if any, you are willing to pay to make it happen. I think you will find that the direct consumer listing sites will not do you a lot of good but they are plentiful. Not the least of which is the free classified section here on this site. Good luck with your sale.

 

I point out that the auction market is no more or less than a consignment sale. One thing to bear in mind if you go this route is that there are usually substantial fees to list an item that fails to meet your reserve so it will benefit you to choose this number carefuly.

 

 

Neil


Neil Beaty

GG(GIA) ICGA(AGS) NAJA

 

There's never a crowd when you go that extra mile.

Professional Appraisals in Denver

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What a mind game is all I got to say.

 

I suppose you can call it that. It's nothing that doesn't happen with pretty much every other item that you buy and sell ranging from collectibles to cars to houses. The only real exception I can think of are stocks (public stocks, that is, private equity is far worse).

 

Again, I wish you the best of luck with your sale.

 

Neil


Neil Beaty

GG(GIA) ICGA(AGS) NAJA

 

There's never a crowd when you go that extra mile.

Professional Appraisals in Denver

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Had a small manufacturing and engineering business for 20 yrs. Used to buy and sell everything from machine tools to foundry equipment, to just about everything else. I had a good handle on that. Lots of recourses and communities where one could learn to swim, deal and be fairly successful. This is almost entirely opaque. You can get a GIA certificate, read a little, talk to some people, but basically you get nothing, except a fair idea of what its worth, which apparently, is meaningless. There is no access point for someone like me to sell at a fair price. That is not the case with the markets I'm familiar with, nor is it the case with most of what you mention above. In my opinion the diamond marketplace is unique in this regard.

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I guess we just see things differently. You seem to be using the term ‘fair price’ to describe the price that dealers would be expecting to pay for new inventory through their regular suppliers. I know of no industry where typical consumer resales are anywhere near this. Most are a tiny fraction.

 

I do know of a few other industries where market data is more readily available to consumers, houses come to mind, but even with those it's a minefield for people who are trying to game the system. 'For sale by owner' is rarely the best approach for inexperienced sellers. If it weren't so heavily regulated I think the individual real estate market would be total a disaster for both sides.

 

 

Neil

Edited by denverappraiser

Neil Beaty

GG(GIA) ICGA(AGS) NAJA

 

There's never a crowd when you go that extra mile.

Professional Appraisals in Denver

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Diamonds are not described fully by looking at a GIA report, or indeed by the most sophisticated analysis tools available. Many attributes are valued as a matter of taste and/or trust rather than having the opportunity to rely on brands and engineering specifications. In addition, the market for large stones in fancy cuts is rarefied and thus (even more) illiquid.

 

Try selling any other luxury item with those characteristics, and you'll find that diamonds are by comparison in an extremely transparent market. You have tons of info on retail prices, lots of appraisers and a couple of well regarded labs whose word is pretty much law (at least on clarity, colour and treatments).

 

You seem to be fixated on the idea that a "fair price" for your diamond is $80k - yet you are finding no-one that approaches this value in their offer; this should tell you something. The fact that someone else may be able to sell the same stone for $80k to a dealer or even for $120k to a private buyer is totally irrelevant; you don't know what else they offer: it may be continuous relationship and a steady supply of rare items, it may be advantageous financial terms, it may be guarantees on the quality or a generous trade-in policy - or all of the above. As a private seller, you cannot offer any of these reliably from the perspective of potential buyers, yet they are all worth something.


Davide - Specialised Consumer Information and Assistance,
Diamonds by Lauren (http://www.diamondsbylauren.com)
davide@diamondsbylauren.com

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Thank you for all the lucid prose and timely responses. Ultimately I do not think we disagree on any of this. My numbers come from your industry, and they are basically behind every offer and conversation I have had about this stone. I am not "fixated" on 80k, I would be willing to part with the stone for just about anything between 65 to 80k. If I was desperate to sell on the spot, 60k is good, but I am not, and therefore it isn't. I will take a bit more time and see what I can do.

 

For anyone else who reads this post and who is in my position to any substantial degree. It is so important to find someone to talk with who knows their stones and does not have something to grind or defend. The only thing better is to have a family member in the business. Otherwise, good luck.

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I think your attitude is healthy - part of the difference in value between the 60 and the 80k is exactly the urgency in selling something that is not readily resaleable. If you are not in a hurry, consider good consignment companies like Pearlman's, New York Estate Jewelry or Lang (or - dare I say it - Fay Cullen). You know what you have, and don't seem to be easily taken in, but be careful of taking what seem to be the best conditions only to get onto the slippery slope of "not selling, must lower the price...".

 

Best of luck!

 

(Oh - just for the record, I am a consumer (or collector) of jewellery, and this is not "my" industry, but I have dealt with enough jewellery purchases and resales)


Davide - Specialised Consumer Information and Assistance,
Diamonds by Lauren (http://www.diamondsbylauren.com)
davide@diamondsbylauren.com

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that is one beautiful gem. I love the Portuguese cut. I have a really small under one carat peach tourmaline here, cut that way, it is just a work of art, as is your topaz. Congratulations

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