Popularly said that diamonds value drop by over 25-50% the sec you buy it. I know that diamonds value is low key de beers bullshit.
But what I wanna know is how do they calculate the diamond resale value and rational behind 50% resale value of something that never breaks or damages. How do they come up with this shit?
In: 1922
If your only job is to buy things in order to resell them you are not paying their value. If you know you can sell something for $100 you aren’t going to pay $100 for it because you need to get paid too. You also can’t pay $90 for it because it might sit around and have its value degrade. Even if it doesn’t get worse over time the longer it takes up shelf space the longer you aren’t making money off that space that you are paying for. You also can’t sell it for $80 because it isn’t new. New sells for $100 and if it is used, even if that has no meaningful change to the product, people will rather buy the new thing than the used thing. So you have to buy it for less than $80 to make a profit. If you buy it at $70 you only make $10 and only if it sells right away. You can’t afford to sell it for any less than $70 so if the price drops you lose money, if the item sits for a long time you lose money, and you can’t move it any faster. If you get it for $60 you can make $20 or you can move it faster and make $10. You have more options. So you offer $50 for it. If the person selling takes $50 you make more but if they, like every person who has ever sold anything ever, say they want more than that you have room to move the price up some without taking a loss.
That is why diamonds are only worth 50% resale.
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