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
The value itself isn’t all that high to start with. The retail price is always marked way up, especially for luxury items like jewelry (sometimes hundreds of percent higher). When you want to sell it, you can’t get that full retail value back.
>How do they come up with this shit?
Same as anything else – the price is what people are willing to pay for.
People typically buy diamonds for engagement/wedding rings or other special occasions. Especially for people locked into the idea of a diamond in particular, try telling someone you’re giving them a used diamond. It may not make LOGICAL sense, but people don’t act logically.
You said it yourself. “De Beers bullshit”. They’ve convinced you that you need to hold onto your diamonds and artificially suppressed the resale market as to keep the primary market inflated.
“A diamond is forever”. That’s their marketing speak for “you’ll never be able to sell it, so hold onto it”.
because people who buy diamonds are suckers. reminds me of those ads on TV where gold merchants offer to buy your old used gold jewelry – but they only offer you a fraction of the market price. all they’re doing is melting it down to re-use.
You can determine a diamond’s resale value by selling it. The price it sells at is its resale value. If you have a diamond that has effectively identical properties to one that sold at a particular price, you should expect a similar resale price for yours.
The diamond market is an example of a market where consumers have poor information, which prevents them from effectively price shopping. This allows jewelry stores selling to consumers to inflate their prices. It’s all a bit of a racket.
I highly doubt that your premise is true – that diamonds lose value when you walk out of the shop. Now, I’m not a gemologist (my sister is), but I have spent a lot of time with some, and the thing to understand with diamonds is that there’s lot of different qualities (aka ‘gradings’) that determine their quality and their price. Obviously, the highest graded diamonds are worth a lot more, are much rarer and will resell easily, so long as they’re above a certain size.
Simply put, most people can’t tell the difference between a perfect diamond and an industrially-made one, so they buy what they can afford -or what the smiling clerk is trying to sell them- and the lower-end diamonds don’t hold a great resale value.
Case in point: Tiffany diamonds. For a reason I just don’t understand, Americans have a fascination for Tiffany diamonds, especially as engagement rings. Now, while Tiffany does indeed occasionally sell perfect diamonds, most of what they sell is slightly above average at best. Tiffany, for all its fame, is a mass-market jeweler and is not highly regarded in the world of gems, so they’re not the company that gets first dibs when incredible stones come on the market.
So yes, average-quality stones have shitty resale value, while you can invest in perfect diamonds, there will always be a market for those, due to their scarcity.
Also, for what it’s worth, diamonds are easy to hide and very hard to detect and they make a perfect investment for on-the-run oligarchs, so I wouldn’t be surprised if demand for loose stones was going up right now.
Most things can only be resold for a fraction of retail, this is no different. Since jewelry is so highly emotional and subject to individual tastes, it can be hard to find a buyer willing to pay near-retail, and resellers have overhead.
Because diamonds aren’t that rare unless they’re large and of excellent quality.
Like if you have a 1/2 carat diamond of decent quality then it won’t have the much value wholesale because for each one in circulation there are 1000 just like it in supply.
Meanwhile if you have a flawless 4 carat diamond then you can sell it for approximately what you paid for it or potentially even more. There are only so many of those in existence and their value is much less inflated by artificial supply constraints.
The people selling diamonds usually mark them up 2-3 times over wholesale. They may have value (Reddit will disagree with me, but meh), especially natural GIA perfect and near perfect stones, but whatever you’re paying (especially Zales and other mall jewelers) is basically a “fuck you for doing business with us” price. You can get better if you know a wholesaler. You’ll never get what it’s worth unless something happens to make it appreciate, or the stone itself is nice enough to be top quality, and thus actually rare. Of course, now they make synthetic diamonds so perfect that the way they “tell the difference” is effectively because the Diamond is too perfect, so those may get devalued and lumped in with synthetics (1/10 value roughly) unless they have a traceable history.
High end diamonds hold their value pretty well.
If you’re buying low grade, sub 1.5 carat stones you probably lose all or most of your money on resale.
Diamonds that retail for more than 20k for the stone, you keep most or substantially all of the resale. Local jewelers near me have buyback guarantees on their high end stones, if you drop 25k on a loose diamond through them they’ll buy it back at that price for life.
Latest Answers