Society has sculpted our minds to believe that diamonds are forever. It’s more than a sparkly stone; it’s a proof of life-long commitment, status and wealth, and unfortunately, of war currency as well. But more than anything, a diamond is seen as a symbol of love. And we all know, love is priceless.
This thought was imprinted in our minds for decades that we actually feel bad about reselling a diamond. Apparently, it is very much in the interest of the diamond industry that your diamond won’t be resold to other people. This way, we’ll buy new diamonds all the time.
But we have to admit that even a diamond may not last forever, and there are situations where you would want to sell it. It could be due to a relationship that turned sour, the hopes of a high profit, or your financial status simply forces you to do so.
Accept the Truth: You Will Lose Money if You Resell Your Diamond
I know that this might come as a shocker for some. After all, diamonds have this image of being so valuable that there’s such a thing as “investment diamonds.”
So, you could be thinking that maybe your stone could be a good investment diamond, and you can make a profit off it. Not really. Well then, at least you will get the price you paid for when you bought it, right? Nope! The truth is that you will lose money if you sell it.
These rocks are among the commodities with 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 one you pay the diamond vendor to get the diamond.
Here’s a sample scenario at a brick and mortar store:
Let’s say that the diamond vendor had to pay its supplier $1,000. And you also made a good deal and got a wonderful GIA certificate. The vendor only charged you a markup of around 30%, so that you got the diamond for the retail price of $1,300. This would be a fantastic deal because, in brick and mortar stores, the markup tends to be even higher and can be anywhere between 30% – 100%!
If you want to resell the diamond to a diamond vendor, you might think to yourself, “Well, if the store will pay me $1,200 then sell it for $1,300, they will still have profit!” Nothing could be further from the truth. However, what you have to understand is that diamond stores don’t pay for their diamonds in advance.
Can you imagine how much it would cost a diamond vendor to pay for ALL the diamonds, jewelry, and gold rings upfront? Even a medium-sized store with a modest collection of diamonds would have to spend millions of dollars. And most diamond vendors couldn’t afford that!
This is why most diamonds displayed at a jewelry store have been bought ON CONSIGNMENT.
This means that the diamond vendor gets the diamonds from the supplier and only pays a small percentage for leasing the diamond. Once the diamond is sold, the vendor pays the supplier with the money the end-user has paid them.
In our best-case scenario, the end-user would pay the diamond vendor $1,300, then the vendor pays its supplier $1,000 and keeps the remaining $300 as profit. So, imagine you want to resell your diamond to the vendor for $1,200. How attractive do you think that would be?
Normally, they would get the diamond from the supplier for $1,000, BUT ON CONSIGNMENT which is more favorable than paying you in cash. Of course, the diamond vendor will refuse your offer.
They will even refuse to take the diamond back for $1,000 because they can get it from the supplier for the same price but with better payment conditions.
The reality is that the diamond could be purchased by another customer a year later, and the diamond vendor wouldn’t get any return on investment for such a long time. So, if the vendor decides to buy your diamond, it will be even less than $1,000.
What About Online Diamond Vendors Then?
Well, they don’t have to lease the diamonds because until a diamond is bought, it stays with the supplier. For this reason, online vendors such as James Allen, Whiteflash, and Brian Gavin can sell the same diamond way less. The average profit margin in the online diamond industry is around 18%, so the same diamond would cost something around $1,180.
However, a similar problem arises when you would want to resell the diamond to them. They could easily sell another diamond of identical quality to a new customer by just listing it online WITHOUT paying any money upfront. To purchase your diamond, however, they would have to pay upfront which is highly unattractive for online vendors as well.
But What if You Sell Directly to the End-User?
Selling directly to another customer via eBay or Craigslist would theoretically give you the highest chance to get the best price for your diamond. I say theoretically because end-users who would buy from you and not from a professional diamond vendor are looking out to make a more affordable deal.
Furthermore, there can be security issues involved with the insured shipping, and you may 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 most considerable amount of money.
Here are some dos and don’ts:
1. List your diamond with a credible lab report.
2. Include real, high-quality photos.
3. Be firm on your selling price or indicate if it’s negotiable.
4. Dealing with loads of money with a stranger can turn into a nightmare if you’re not cautious. Don’t meet up in a suspicious place or give out your home address. Be vigilant!
My Recommended Option
At this moment, WP Diamonds is the leading international online diamond buyer. They’re very professional and worth checking out, in my opinion.
They provide 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 exceptionally helpful with all the questions I had.
So, how exactly should you go about selling a diamond on WP Diamonds?
The very first and most important thing to do is to let go of any emotional value you might be placing on your diamond. You might be attaching sentimental value to the diamond because it belonged to your grandmother or your former partner. However, the buyer couldn’t care less, and it won’t make the price of your diamond go up!
The second thing you will have to do is to get a GIA certificate if it isn’t GIA-certified yet. Some commercial diamond online buyers require your stone to be GIA-certified, and some don’t.
But even the ones that don’t will be much more likely to make you a good offer if you have a GIA report with your diamond.
An AGS report would also be excellent. But if you have one from another grading lab (that is not as reputable as GIA or AGS) or none at all, you should seriously consider getting a GIA report.
Now, it can cost you 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 WP Diamonds via chat, I was told that it’s definitely worth it to get a GIA certificate if your diamond costs $5000 – $10.000 or more in retail.
The more expensive your diamond is, the more it will pay to get a GIA certificate.
Next step is to type in your diamond’s specs, and you’ll be given a rough estimate. Then you send in the diamond, an expert will evaluate it, and you will get the final offer. If you accept the offer, the money will be immediately transferred to your account. Otherwise, the diamond will be sent back to you.
We buy diamonds because of the emotional appeal it lures us with. But reselling a diamond should be practical if you want it to work. Know that you won’t break even and you will lose money. Understand exactly what you have, and set realistic expectations.
Avoid brick and mortar stores or you’ll lose so much more. There’s no harm in doing it yourself as long as you researched well, and you are patient. Oh, and don’t be insulted by the offer, it’s not you, it’s the 2nd hand diamond you are reselling. 🙂
Should you have any question, feel free to drop a comment down below or email me here.
My advice is free!