My website is all about diamonds and you might have heard De Beers’ slogan “A diamond is forever”. This slogan is not only aimed at promoting diamonds as a sign of everlasting love and thus as the perfect feature in an engagement ring. It is also aimed at increasing the emotional value of a diamond so that people actually feel bad about reselling a diamond.
Obviously, it is very much in the interest of the diamond industry that your diamond will not be resold to other people. This way people will buy new diamonds from diamond vendors.
In this post, I will share the details of how to sell your diamonds online and get into all the nitty-gritty details that you will need to know and consider beforehand.
Accept the truth: You will lose money when reselling your Diamond!
Now, I know that this might come as a shocker for some people. After all, diamonds have this image of being so valuable and everybody will have stumbled upon the term “investment diamonds”.
So maybe, your diamond will be a good investment diamond and you can make a profit when selling your diamond? No!
Well, then even if your diamond was not such a good investment diamond, then you will still get the price you paid for the diamond, right? No!
The truth is that you will lose money when selling your diamond. You need to understand the specifics of the diamond industry to understand why you will almost always lose money.
Diamonds are among the commodities that have a very high profit margin. For this reason you have to distinguish between wholesale prices and retail prices.
The wholesale price is the price the diamond vendor has to pay its supplier for having the diamond. The retail price is the price that you pay the diamond vendor to get the diamond.
Now, let’s say that the diamond vendor had to pay its supplier $1000 to get the diamond. And let’s say that you made a really good deal and got a wonderful GIA certified diamond. The diamond vendor only charged you a markup of around 30% so that you got the diamond for the retail price of $1300.
This would be a really fantastic deal because in brick and mortar jewelry stores the markup tends to be even higher and can be anywhere between 30% – 100%! A markup of 30% on diamonds in brick and mortar stores is as low as it gets!
If you want to resell the diamond to the diamond vendor you might think to yourself: “Well, if the diamond store pays me around $1200 and then sells it again for around $1300 it will surely make a good deal!
Nothing could be further from the truth, however!
What you have to understand at this point however, is that diamond stores don’t pay for all their diamonds and inventory in advance! Can you imagine how much it would cost a diamond vendor to pay for ALL the diamonds, jewelry and gold rings in advance?! Even a medium sized jewelry store with a modest collection of diamonds could easily have to pay million of dollars in advance. Most diamond vendors could not afford that!
This is why most of the goods displayed at a jewelry store have been bought on consignment. This means that the diamond vendor gets the diamonds from its supplier and only pays it a smaller percentage for leasing the diamond. Once the diamond is sold, the diamond vendor pays the supplier for the diamond with the money the end-user has paid to buy to the diamond.
In our best case scenario example the end-user would pay $1300 to the diamond vendor and the diamond vendor in return would pay $1000 to its diamond supplier and keep the remaining $300 as its profit.
Now, imagine you want to resell your diamond to the diamond vendor for $1200. How attractive do you think this would be to the diamond vendor? Normally the diamond vendor would get the diamond from the diamond supplier for $1000 BUT on consignment which is a way more favourable paying condition than paying you the money in cash. Of course, the diamond vendor will refuse!
The diamond vendor will even refuse to take the diamond back for $1000 dollars because he can get it from the diamond supplier for the same price but with better conditions of payment! It is very burdensome to a diamond vendor to pay for a diamond in advance in cash with only the hope of a future profit. It might very well be possible that a certain diamond only gets bought by another customer a year later and the diamond vendor would not get any return on its investment for such a long period of time!
Thus, the diamond vendor will even pay you less than the $1000 to buy the diamond from you!
You see, there is no way you can sell your diamond without loosing money to diamond vendors.
If you want to dive even deeper into this topic please read Edward Jay Epstein’s industry shattering article “Have you ever tried to sell a diamond”. It was published in 1982 but in terms of its message it is still up-to-date. Everyone who has something to do with diamonds actually knows about this article.
What about online diamond vendors?
Well, what about diamond vendors then? They don’t have to pay in order to lease the diamonds because until a diamond is bought it stays with the diamond supplier.
That’s correct, that is why online vendors such as James Allen, Whiteflash or Brian Gavin will charge you way less for the same diamond. The average profit margin in the online diamond industry is around 18% so that the same diamond would cost something around $1180.
However, the same problem arises when you would want to resell the diamond to them. They could easily sell another diamond of a similar quality to a new customer by just listing it online and WITHOUT paying any money upfront. In order to buy your diamond back however, they would have to pay upfront which is highly unattractive for an online vendor, too!
What about selling directly to the end-user?
Selling directly to the enduser via Ebay or Craigslist would theoretically give you the highest chance to get the best price for your diamond. I say theoretically however, because endusers who would buy from you and not a professional diamond vendor are looking out to make a really great deal. So, their readiness to pay a really good price will be greatly reduced as well.
Furthermore, there can be security issues involved with the insured shipping and you might not be entirely confident with selling and sending stuff online. If you don’t have a good reputation on a selling platform, the price will be lowered even further.
But if you feel comfortable selling directly to the end-user via the internet, it still is the most likely way to get the largest amount of money.
Which steps you need to take to sell your diamonds online
So, how exactly should you go about selling a diamond on the internet?
The very first and very important thing to do is to let loose of any emotional value you might be placing on your diamond. You might be attaching some value to the diamond because it belonged to your grandmother or because your former partner gave it to you and the time you spent together still means something to you.
However, a buyer of the diamond could not care less what kind of emotional value you attach to the diamond and it will not make the price of your diamond go up!
The second thing you will have to do, is to get a GIA certificate for your diamond if your diamond is not already GIA certified. Some commercial diamond online buyers require your diamond to be GIA certified and some don’t. But even the ones that don’t require a GIA certificate will be much more likely to make you a good offer if you have a persuasive GIA report accompanying your grading report.
An AGS report would also be excellent. But if you have no report or a report by another grading lab (that is not as reputable as GIA or AGS) you should seriously consider getting a GIA grading report.
Now, getting a GIA report can cost you anywhere between $250-$400 depending on the diamond. Apparently, it will not always pay to get a GIA report in every case, especially if it is a cheap diamond. Talking to wpdiamonds via chat I was told that it does definitely pay to get a GIA certificate if your diamond was worth $10.000 or more in retail. If you got your diamond for between $5000 – $10.000 it is still likely that it will pay to get a GIA certificate. The more expensive your diamond was, the more it will pay to get a GIA certificate.
If you want to sell your diamond to a professional online diamond buyer, you will usually type in the basic data of your diamond and you will be given a rough estimate of what you may expect to get for the diamond. Then you send in the diamond, the diamond will be evaluated by an expert and you will get the final offer. If you accept the offer, the money will be immediately transferred to your account and otherwise the diamond will be sent back to you.
The crucial thing you will have to make sure is that the shipping and the possible return to you in case you don’t like the offer is both free and insured.
So how to sell your diamonds online and where?
At this moment, wpdiamonds is the leading international online diamond buyer that is very professional and worth checking out in my opinion. It provides free and insured shipping and return shipping in case you don’t accept the offer. And I also found the live chat support team to be very helpful with all the questions I had.
If you stay realistic with your price expectations, that can be an easy and quick way to get some of the money back that was originally spent on your diamond.
In case you should have any more questions, just drop me a mail or leave me a comment!