How to Sell Your Diamond?
How to Sell Your Diamond?
Posted by Sharif Khan on 27th Oct 2019
What’s the point in holding onto a diamond wedding ring months after parting ways with your ex-spouse? That piece of diamond jewelry was meant to signify a bond that no longer exists. Don’t let it be a source of pain and bad memories. Instead, consider selling it. Especially if you have urgent financial needs such as a pending home renovation and education for your kids. Or a long overdue vacation that’s going to relax you and usher in a fresh start.
Selling a diamond requires just as much research and preparation as it does to buy it. You’ll have to consider a lot of options available in the market and the diamond industry as a whole. You’ve got a host of multi-players and intermediaries who are ready to line up and offer you a purchase price for the diamond. But you need to know and clearly understand one thing beforehand. And that’s the brutal truth; you CANNOT get a deal the equivalent of what you paid for it precisely. Don’t expect to rake in an enormous profit. It’s not going to happen even if you resell to top ranking, reputable diamond dealers. You can only get the ‘best’ return on your stone, which is around 50 percent of what you paid for it. It could be slightly above that if you have the right connections.
As mentioned earlier, substantial research goes into selling a diamond. You want to make sure you’re getting the right deal. Or the most value for your diamond, should you have a change and opt for a trade-up. A top-notch dealer can give you a credit allowance to upgrade to a new stone of equal or better value if you originally bought from them. You’ll have to worry about the condition of the stone, before discussing the price with a potential buyer. Luckily for you, this article exhaustively documents a procedural approach to selling your diamond. And it all starts with proper grading.
What Kind of Diamond Are You Selling?
Hopping you bought the diamond wisely, you’ll have its grading report. You have the 4Cs (cut, clarity, color, and carat weight) at your fingertips. They’re the quality determiners for the diamond — no need to worry if you don’t know jack about the subject. Most people don’t. Cases of fraud and rip-offs are common in the diamond business. Maybe you got the diamond from a friend or relative in the form of a gift. That kind of relationship allows you to trust them. Unknowingly and naively, you may have gotten a low-quality stone. It’s also possible that the stone is synthetic, but you stupidly thought it was a natural diamond. Side note: nothing’s wrong with lab-grown diamonds. If there were, you would have gotten a heads-up earlier on in the introduction.
None of that matters. Here’s what you need to do whether the diamond’s graded or not. Contact a respected rating agency. You can work with either G.I.A or A.G.S. The laboratory analysis and report they give is instantly recognized all over the world. Expect detailed information on the 4Cs of diamond quality. For each of these rating characteristics, G.I.A has a scale that helps categorize your diamond.
If there’re any yellow hues, the color grade is far from colorless which is the ideal diamond color. A flawless verdict means your stone is blemish-free. It has no instances of diamond feathers and inclusions, which scores major points in clarity and overall quality. The cut of the stone should be excellent for the highest cut grade quality. Facets of an excellently cut stone have the right symmetry.
Have you ever wondered what makes the bright sparkle when bright light hits a diamond? The facets do. But they have to be aligned at the right angle to reflect and disperse light for maximum brilliance and fire. You’ll also get to know the correct weight in carats of the stone. If the stone’s big, that usually means more carat weight and a higher value. But don’t get too excited yet. The higher price that more carats can fetch could be quickly shot down by a poor cut, a yellowish tint, and a case of several fissures that affect the clarity. So, cross your fingers as you wait on the report. Note that the same grading rules apply for both natural and synthetic stones.
Have the Diamond Appraised
Now that you have a diamond certificate, there’re no more doubts over quality. The next big hurdle is putting a price on your diamond. But before you do that, is the diamond loose or mounted on a setting? And if attached, are you selling just the stone or the entire piece of jewelry: ring, chain, bracelet, etc. G.I.A and A.G.S aren’t only the best rating agencies on the globe, but they’re the best institutions to appraise the stone as well. In case they are not in a position to offer appraisal services in a timely fashion, use their contacts. A quick visit to their respective websites should grant you access to a list of accredited appraisers. Just pick one who works for you in terms of fees charged and proximity.
Get an appraisal only after having a grading report because the appraisers need it to evaluate the stone. You need to look at evaluation in broad terms. It’s always good to get a second opinion. So if resources (time and money) allow, work with two different appraisers. Do a price analysis of your own. You can create a catalog as basic as an excel spreadsheet with several columns. Make columns for each of the 4Cs. Have additional columns for price and diamond dealers (a list of the top 10 in the industry should do). For the price comparison to make sense, the diamonds in your makeshift catalog should bear the exact traits of the stone you intend to sell. However, this is just an indication of current or prevailing market prices of diamonds that are similar to your stone. What you end up getting from a buyer could be 40 to 50 percent lower.
If the stone is mounted and you also want to sell the setting, get a separate appraisal for the setting. Gold (white, rose), silver, and platinum are the most common metals used to build both custom and ordinary settings. Pure gold is supposed to be very soft in appearance and about 24 karats. A gold setting typically has the karat measure written somewhere on it— usually the inside lining of the gold mount. According to resale values, diamond dealers view settings in the same way they would scrap gold or silver. What you get for a gold setting is the scrap gold price.
The dealers weigh the setting and offer you 50 cents on the dollar for every dollar on the price of your gold setting as per its weight. Assuming the setting cost you $500, expect $250 for it. You may be lucky to get 60 or 70 cents on the dollar for the setting, but only from select online dealers. The resale price for a platinum setting is lower but close to that of gold. Silver settings fetch the lowest prices. It’s an even bigger hit when the setting is custom because dealers don’t consider that an exception. You still get the same offer as a standard relatively basic setting design. You might want to consider holding on to the setting: that way, you already have a mount when you decide to get another stone in the future. But if the need for cash is urgent and you’re comfortable with the scrap gold price, don’t hesitate on the offer. The offers don’t get any better unless you have a piece designed and autographed by a prestigious dealer such as Tiffany. And that’s very rare.
Time to Find a Buyer
The stone’s now graded, and your appraisers have given you an estimate of its current market price. Take your time and explore all the buyer options available to you. You can work with a local jeweler, an online trader, or an offline national chain store. By the way, all serious buyers will most likely demand proof of diamond quality and valuation from you. Don’t let that upset or frustrate you. It’s a standard industry procedure. They must be confident in what they’re buying in the same way you verified the quality of the stone before purchase. If they’re an out-of-state or country dealer, you’ll have to ship the stone to them. Just make sure they cater to insurance expenses for the shipment. In case of a disagreement on the offer, you can have the stone quickly shipped back to you.
Don’t overlook the possibility of finding a direct or individual buyer. Such an opportunity would be the best thing to happen to you in the quest to sell your diamond. The chances are that the direct buyer is in the market for a specific diamond. If your stone happens to be their dream diamond, then you have just hit a home run. The individual buyer could pay top dollar for the stone to put an immediate end to their diamond search. It’s a win-win for you since you get to sell the stone and recover 100 percent of the
original price or even turn a profit. But that kind of coincidence is rare. You can find direct buyers from peer-to-peer selling places such as eBay and Craigslist.
You need to realize that ‘market price’ has different interpretations depending on the buyer you face. Individual buyers looking for rare stones typically have no budget ceilings. They’re probably ready to meet up with you pushing a wheelbarrow full of 100-dollar bills prepared to close the deal. In the case of rarities, the spread between what you, the seller, want, and what the buyer pays can be called the market price. The same case applies when your buyer is a jeweler. Rare is king in the world of diamonds. Suppose yours is a run-of-the-mill, ordinary diamond: the dealers now have leverage. A local jeweler would probably offer you half of the current market price. After all, they have overhead costs and need a sizable margin their mark-up and competitive pricing.
Big chain stores aren’t any different. They probably have tons of the diamond you’re selling in their stock reserves. Not to mention the credit diamond purchases they enjoy from their suppliers—diamond wholesalers and manufacturers. So, it’s almost certain that they’ll offer you a price much, much lower than the original price. The good thing with these big brand names is that they move diamonds a lot quicker due to high volume sales. Find a credible one and ask them whether they can consign your diamond. If they agree, let them sell the stone on your behalf, especially if the service costs only a small fraction of the proceeds.
Alternatively, you can contact an auction house to sell the diamond. It’s an incredible option if your stone has an antique mounting, and you want to earn from both its quality and rich history. Auction houses operate on and offline and only take a commission when the resale has gone through, and you have received your money. You can also sell the stone to a pawnshop. It’s probably the fastest way to convert the stone into cold hard cash. But pawnshops aren’t your average diamond dealer. Think of them as loan sharks. They buy at an even lower price than your average jewelry store. Most of the stuff on the shelves sell below market price.
The best shot you have at getting a decent offer is a reputable online jeweler. Online dealers have low operating costs and may be willing to offer you a better price compared to other potential buyers. They can pay handsomely, especially if they have a buyer for your kind of stone on standby. Avid online jewelers also have attractive upgrade and trade-in programs. If you bought the stone from an online jeweler, check out their upgrade offers. Some give upgrades on diamonds that are up to two times more valuable than what you bought. Others have lifetime upgrade programs.
Take full advantage of the lucrative program and get a new stone of higher value. You’ll be in a position to ask for and, hopefully, get a few more dollars when you sell the new slightly used diamond. Online jewelers generally have the best return policies and buyback guarantees. In case of a cash-strapping emergency within the return window allowed, the online jeweler can help. All you have to do is return the diamond to them for a ‘no questions asked’ full refund of the original price paid. You get to salvage the situation and avoid selling the stone at a loss. That’s a classic case of the proverbial two birds with one stone.
Recap and Final Word on Selling Your Diamond
Here’s a quick summary of the steps to take to sell your diamond.
You must get the stone analyzed for quality and appraised for a monetary value: there’re no two ways about that. Make sure you use and stick to agencies that are nothing short of the best in the game. You could need them for reference in the future, so it's essential to maintain that consistency.
Appraisals put a price on your diamond. Let the appraiser know that you intend to sell the diamond as opposed to, say, insuring it. Having that information in mind enables the appraiser to come up with a realistic resale value compared to making a ballpark estimate. The appraisal report should be in writing. It’s also wise to get a signed statement of value that you’ll present to jewelers and other potential buyers. Even with the appraisal value, make an effort to set your resale price as a strategy for deliberation with buyers.
Making the actual sale of the stone varies with urgency. Some methods take time but promise better results than others. Diamonds are expensive and valuable. A 1000-dollar stone could be within budget for one buyer and entirely out of the question for another, for instance. That’s why there’s always a vibrant market for diamonds, whether new or used. Regardless of the approach, eventually, the right buyer comes along.
You can sell to an individual, a local jeweler, a big chain dealer, or an online jeweler. Auction houses and consigners act more as facilitators than buyers. They’ll assume the role of your agent for the agreed period and find you a buyer at a fee. Be choosy and keep that fee as low as possible. For your peace of mind, approach pawn shops with enough knowledge on diamond prices. It’ll help with the negotiation. Strive to get a reputable online jeweler to buy your diamond. They usually offer the best price.