Selling diamond jewelry can be an extremely frustrating and overwhelming process. First and foremost, the item up for sale is most often a wedding ring or engagement setting, which can bring with it its own emotional challenges and difficulties.
Second, most people selling a diamond expect to receive a great price in return – at least, a price fairly close to the one they originally paid. This is rarely the case, however, and can result in dissatisfaction and added frustration for the seller.
To further complicate matters, it is difficult to know if the price you’re being offered is good and fair – or how to go about finding a good price in the first place.
Here is a breakdown of what you should expect when selling a diamond and how you can go about making sure you receive the best possible price.
The value of a diamond
The first step in better understanding the diamond-selling process and what you can expect from a price standpoint is to understand three key levels of a diamond’s value – appraised value, retail value, and pre-owned value.
Most jewelry appraisals will produce a value that is well above the retail price. The reason they do this is because jewelry appraisals are primarily performed for insurance purposes, so that in the event the item is lost or stolen, the insurance company would have to cover the full retail price of a similar diamond and any increase in the metal and retail prices that may have taken place over time. This results in a much higher replacement value in the future.
When you purchase a diamond at the retail level – or any piece of jewelry for that matter – the price you pay will almost always be greater than the value of the material components (in this case, the metal band and the diamond). This has mostly to do with all the work that goes into getting these materials from the earth and into your possession.
In the diamond supply chain, diamonds have to go through:
- Jewelry crafting
- Retail sales
As a diamond makes its way through this lengthy supply chain process, its price gets driven up further and further by a number of factors, including:
- Employee wages
- Lab certification
- Cost of the jewelry
This is important to remember when purchasing jewelry at the retail value. You’re not just paying for the piece – you’re also paying for all the time, effort, and money that went into bringing it to you.
Many people selling diamonds to a jeweler often expect to receive something close to the appraisal or retail value in return, only to be disappointed once the offer comes back. The pre-owned value of a diamond will generally be the lowest of these three values, for a number of reasons.
First, purchasing a pre-owned diamond requires an immediate outlay of capital in exchange for a future sale. This involves the jeweler taking on considerable risk, which in turn must be rewarded with a higher potential profit. Otherwise, the purchase simply isn’t worth the jeweler’s time or money.
The price a jeweler is willing to pay needs to be less than the cost of the diamond at the wholesale level. And because diamonds are so expensive to carry and there are so many different varieties available, you’ll hardly ever find a retail jewelry store that stocks them.
So… How much should you expect to receive when selling a diamond?
Every diamond has many different “market prices” one could expect to receive when going through the selling process. The lowest is the “cash value,” which is the price a store, pawn shop, or professional jewelry buyer would be willing to pay immediately in order to acquire the diamond, without a customer having specifically requested the diamond at the time of purchase.
No matter which of these three options you choose to sell to (jewelry store, pawn shop, or professional jewelry buyer), you shouldn’t expect to receive the full price you originally paid. If you paid $5,000 for your diamond, a reasonable expectation could be between $800 and $1,000 in return.
What if you trade in?
If you decide to go the trade-in route, you may be able to get some store credit in return, but usually only if you spend at least 50% or 100% of what you originally paid. So if you paid $5,000, you could expect to have to pay another $2,500 or more in order to get that $5,000 in store credit.
You essentially have three options:
- Trade-in – This is typically only the best option if you’re looking to purchase a different jewelry item in conjunction with your sale.
- Sell for cash – You could also sell for cash, either to the public or to the jewelry industry. The public will usually be willing to pay more, but finding the right buyer is often more challenging and scams are more likely to occur through channels like Craigslist or eBay.
- Sell at auction – In many scenarios, selling your diamond via auction turns out to be the best option – especially if you are able to use a reputable online diamond auction platform.
Sell your diamond via auction with Gold Guys
Selling your diamond via Gold Guys’ auction platform is in many cases the best way to maximize the profit of your sale. Here’s why:
- Increased exposure – Through online auction, the diamond is made visible to many reputable buyers (as opposed to limiting exposure to only local, in-person bidders).
- Increased bid value – During auction, bids will come in exclusively from professional diamond buyers who are competing for your diamond, so you know you’re getting a fair and high price.
- Online tracking – Our platform allows you to follow your diamond around the globe and to track any incoming bids, so you can maintain full visibility over the process.
- Insurance – During the process, your jewelry is fully insured at a value determined by our professional staff during the submission process.
- You’re in full control – If the auction closes and you choose not to accept the highest offer, your diamond will be returned to you at no charge (unless you would like to have it reset back into its original setting).
In addition to offering a streamlined online diamond auction service, the Gold Guys are also dedicated to helping our customers receive maximum value for their gold and other precious metals, including coins, bullion, dental work, sterling silver, and more.
Contact us today to learn more about maximizing the value of your diamonds and precious metals.