They say a diamond is forever, and it?s probably best for that slogan to hold true. If it doesn?t, and you find yourself shopping your diamond, you?ll come to the realization that the actual value of your stone isn?t worth nearly as much as you paid for it.
The premium on diamonds goes back to the De Beers stranglehold on the diamond market, as reported by the now-famous article by the Atlantic back in 1982 discussing how diamond prices came to be. Speculation, great advertising campaigns, and an industry monopoly lead to rapidly increasing prices in the retail diamond industry with no regard for demand or free markets. The prices were what they said they were.
With an artificial pricing scheme like that in place, retailers were able to control not only the supply and pricing, but also the after-market pricing. With markups so high in the diamond industry, retailers have very little incentive to pay high prices for diamonds that are returned or bought from individuals. Couple with essentially being employed by the diamond industry and vertical integration, consumers are left out to dry.
That doesn?t mean you can?t sell a diamond if you?re like to. There is a secondary market out there, but it?s just not as popular as the gold market, for example. The intrinsic value of a diamond is actually very low compared to precious metals. Diamond buyers are left creating the market themselves, needing to act as both buyers and sellers in order to make the strategy feasible. Either way, you can expect the price you pay for your retail diamond to be much, much higher than what you?re offered on the secondary market.
As people have become more cognizant of the diamond mispricing, the secondary market has grown. More websites are increasing the visibility of the issue and providing guides on diamond pricing and the market in general. In the years to come, we might see the secondary market continue to explode and put pressure on the retail market.
There is a lot of information out there to educate consumers on diamonds. This resource on diamond value covers the 4C?s very well, while Top 5 Cash for Diamonds provides a guide to the diamond selling process with online diamond buyers. Jewelers can help price diamonds remotely, or you can send them in to be graded and evaluated with no obligation to sell.
If you have a GIA or EGL certification for your diamond, the information on it can be provided to an online diamond buyer for a precise quote on your diamond. That is the best way to get an accurate quote, so if you have a certification, you?re in great shape. For more information on the GIA certification, check out their official website.
Just because an online diamond buyer or local jeweler offers you considerably less than you paid for your diamond, it doesn?t mean you?re being taken advantage of or they are trying to scam you. Always get a couple quotes from different buyers (this is easier if you have a certification you can send to people), and enter into the process with the expectations that you?ll be offered a number significantly lower than the retail price.
Lastly, don?t look at your diamond as an investment. It?s probably not going not going to increase dramatically in value (perhaps with inflation). If you aren?t wearing it, it isn?t special to you, and has some value, it would be a good idea to consider selling it.
To learn more about the diamond selling process, check out DiamondSellersGuide.com.
