One of the most frequent questions in online jewelry forums concerns the resale value of diamonds or diamond jewelry. People get divorced, they inherit unwanted jewelry, or they have financial problems, and suddenly wonder how much their diamonds are worth. The short and simple answer is much less money than they paid for them!
There are rare cases where a particularly beautiful item of jewelry or a special diamond increases in value over the years. These rare pieces often have a connection to celebrities or famous people, or the diamond in question is of an unusual size, quality or color. If you bought your diamond in a jewelry store or online, it will inevitably – and immediately – depreciate in value.
“It can be a big shock to take a diamond ring to half a dozen different buyers and be offered between 25-50% less than you paid for it.”
Many people who decide to sell a diamond are seriously disappointed by the amount of money they finally receive. This is partly due to a lack of understanding about how the retail jewelry trade works, and partly due to some romantic misconceptions about the true value of diamonds. It can be a big shock to take a diamond ring to half a dozen different buyers and be offered between 25-50% less than you paid for it. Some pawn brokers may try to palm you off with a third of the original price.
A good comparison to diamonds is second hand cars. A classic car that is a genuine collectors item may increase in value, particularly if it was once owned by somebody famous. Your car, that you bought from the local dealership, will depreciate in value the minute you drive it off the forecourt. Even if it looks immaculate and runs perfectly, it will be worth much less after a few years. Most people take it for granted that their car will fall in value – so you shouldn’t be surprised when the same market forces apply to your diamonds.
The jewelry business is like any other – it responds to supply and demand and other market realities. The jewelry store in your local mall or high street, or the online store that you buy from, is just the last link in the global supply chain. There are no precise formulas to calculate how much jewelers pay for diamonds. However, a good rule of thumb is that they need to clear a 25% profit on each sale. If they can earn more than that, they will!
Independent jewelers work hard to cultivate a strong relationship with their suppliers. They want to be able to buy on consignment and get the best possible deals on their diamonds. The goal is to buy for the lowest possible price and sell for the highest possible price. Suppliers view jewelers as their clients and work equally hard to keep them happy. The diamond industry is a tough place and every supplier and retailer has a lot of competitors.
If you expect a jeweler to buy from you, rather than an established supplier, you will have to be ready to sell entirely on the jeweler’s terms. Your jeweler will need to see a clear profit before he disrupts his existing supply chain. Once a jeweler buys your diamond, he is stuck with it and has to resell it on favorable terms. His supplier will probably offer stones on consignment or sale or return, substantially reducing financial risk to the jeweler.
At this point in time – and probably throughout time – every diamond has a potential resale value. The problem is that the resale value will generally only be the very lowest that market conditions will support. If you are in a small town with only a couple of jewelers, you are trapped in a buyers market. In the past this was a problem, but now it’s possible to sell your diamond online and get a fairer price.
The resale value will also be affected by the state of the national or even global economy. If there is a downturn or a recession, there will be a glut on the market as people rush to sell their jewelry to get through a difficult period. Not only will the supply of second hand diamonds increase and demand fall, but people in financial difficulties will accept lower prices. Diamonds and other types of jewelry have always functioned as portable assets that can be sold in times of need. That practice continues today.
The table below shows a hypothetical example of how a diamond might change in resale value when the economy is strong. For the sake of argument we’re assuming that the supplier sold the diamond to the jeweler for $1,000. The numbers are theoretical and are used to illustrate the broader point.
|Your Diamond||Changes in Value|
|Initial Suppliers Price||$1,000|
|The Price your Jeweler Charged You a Few Years Ago||$1,250|
|Current Jeweler’s Price for an Identical Diamond (assuming a 10% price rise)||$1,375|
|Current resale value for your diamond (assuming the jeweler deducts 25% from the current price of a new diamond)||$1,031.25|
|Your loss on the sale||$218.50|
The next table shows a hypothetical example of how a diamond might change in resale value during a recession. In this case, a new diamond that has the same carat weight, cut and GIA gradings as your diamond is now selling for $250 less than the initial retail price of your diamond. The jeweler deducts this sum and then reduces the price again to reflect the suppliers price. He also knows that there is a glut on the second hand market, further reducing the resale value of your diamond.
Changes in Value
Initial Suppliers Price
The Price your Jeweler Charged You a Few Years Ago
Current Jeweler’s Price for an Identical Diamond (assuming a fall in retail prices)
Current resale value for your diamond (assuming the jeweler deducts 35% from the current price of a new diamond)
Your loss on the sale
If you’re planning to sell a diamond or a diamond ring (and you don’t need money urgently) it’s definitely better to bide your time. You should be planning on selling when the economy is strong and demand for used diamonds is higher. You can also use the time to properly research buyers and look for a jeweler or online buying service that you can trust to give you a reasonable price.
This is another question that is often asked on jewelry forums and websites.It’s a bit like asking how long is a piece of string…The resale value of a 1 carat diamond depends entirely on market conditions and the quality of the diamond itself. Two different 1 carat diamonds could vary in their resale worth enormously. A new one carat diamond might cost anywhere between $2,000 and $25,000. The resale value will vary in proportion to the original price.
Aside from basic supply and demand, the price of diamonds is determined by the 4Cs. These are recognised grading standards that measure each diamond’s individual cut, color, clarity and carat weight. The fact that a diamond is one carat in weight doesn’t tell you anything specific about its quality, or how much it’s worth as a resale item. The first thing any jeweler will ask for when you sell a diamond (apart from proof of ownership) is whether you have a certificate for it.
Certificates are issued by the organisation that originally graded your diamond. These include the GIA or Gemological Institute of America, the EGL USA Laboratory, AGS, or less well known organisations like the IGL. They use number and letter codes to precisely describe the diamond’s qualities and characteristics. Any jeweler can quickly determine the market value of a diamond just from the certificate. This can be confirmed by an examination with a loupe, or even more precise testing.
The table below shows an example grading for a one carat princess cut diamond. The color rating is E, meaning that the diamond is almost colorless and should be highly prized. However, the clarity rating is VS1, meaning that the stone has some minor inclusions. Even if these aren’t visible to the naked eye, they will still reduce the diamond’s value.
If you don’t have a certificate for your diamond it’s not a problem. The best move is to get an independent evaluation done so that you have a precise idea of its 4Cs grading. Many gemologists or jewelers perform this service quite cheaply for insurance evaluations.
In most cases, selling a diamond ring is essentially the same as selling a loose diamond. The only difference is that the type and quality of the ring’s precious metal may slightly affect the resale value. Overall, how much you can get for a diamond ring will be determined by the diamond itself. If it is a simple ring with one centerstone the evaluation is straightforward. If you want to sell a halo or pave ring, it may be harder to judge the resale price.
Many diamond buyers aren’t particularly interested in your diamond ring itself; their main business is loose diamonds. If they buy a ring, they’ll often remove the diamond from its setting and the ring itself will be re-smelted for bullion. As gold prices peaked in 2011 and 2020 (above $2,000 an ounce) jewelers had to raise prices for diamond rings with 18ct gold settings. You could expect to get slightly more for your diamond ring if the setting was gold.
If you’re selling to an independent jeweler, they’re more likely to consider the ring as a whole and place greater value on its appearance and the style of the setting. This is because they may be planning to give it a quick professional clean and put it straight in the display case for immediate resale. A stylish, well designed ring, that attracts walk in customers, may command a slightly higher second hand price.
If you’re not under immediate pressure to sell a diamond ring, it’s worth checking the current trends for precious metal prices. Gold, silver, and platinum prices are posted online and you may prefer to wait and see if they will rise. It probably won’t make a major difference to the final price, but every little helps.
There could be several reasons why you are being offered a low price for your diamond or diamond ring. The first is that you paid too high a price for it in the first instance. Not all jewelers are honest and it’s not unknown for naive customers to get ripped off. If your ring has any flaws or inclusions – and these might not be visible to the naked eye – the resale value could be significantly lower than you expected.
It’s an ugly shock to discover that what you believed to be a $3,000 stone is actually worth much less. This can happen sometimes when diamonds are bought from private sellers on eBay or similar sites. It might look good, and it’s certainly a real diamond; but it’s not the quality that you thought it was. Even small variations in the 4Cs can cause major changes in a diamond’s resale value.
Sometimes there can be disappointments with heirloom jewelry. If you inherited diamond rings, bracelets or necklaces from your parents or another elderly relative, there may be unrealistic expectations about their value. Unless the previous owner was meticulous with insurance appraisals, they may have confused the market price of their jewelry, or exaggerated it in their own minds. If you are offered an unexpectedly low price, your first move should be to get an independent appraisal.
Your choice of buyer will also affect how much you are offered for your diamond. If you go to a pawnbroker, you will almost certainly be offered a price that is below the current market value of your diamond. Pawnbrokers make a living by selling used goods cheaply and offering their customers bargains. The only way they can do this is by buying very cheaply from people who need cash in a hurry or who lack the sophistication to find a better buyer.
If you live in a small town, or even a district in a city, there may only be a couple of local jewelers. They may operate as an unofficial cartel and keep resale prices to an absolute minimum. They know that there is minimal local competition and they have a captive clientele. If you’re facing a buyers market, your best move is to bypass the locals and sell online. You can get free online quotes from as many sites as you like. Any reputable diamond buyer will offer free return shipping if you don’t like their final offer.
There are four main options if you want to sell your diamond ring. Of these four, it’s usually online diamond buyers like Gemesti that offer the best prices.
Every option has it’s pros and cons. These include the final sale price, time spent finding a buyer, personal security during the selling process, tax liabilities, shipping costs and professional evaluations. Your goal should be to find a quick, secure and convenient solution that delivers the highest possible price.
Pawnbrokers don’t always have the best reputation in business and law enforcement circles. Their business model is broadly based on paying cash for second hand goods. Sometimes clients hope to redeem their property within an agreed time period. More often than not, the cash payment is final and the pawnbroker will resell the pawned item.
Pawnbrokers generally pay well below the market value of diamonds and jewelry and will often simply sell them on to jewelers and professional buyers. They make a profit from the naive and the desperate and some have no scruples about buying and selling stolen property. You definitely won’t sell your diamond ring for the most money in a pawnshop and may put your personal security at risk by visiting one.
Local jewelers can at least evaluate the exact market value of a diamond ring or necklace. They also tend to be a lot more respectable than pawnbrokers and cater to a better clientele. That said, any jeweler who wants to stay in business is used to driving a hard bargain. Like pawnbrokers, most of them are fairly shrewd judges of character and can quickly judge how much you know about diamonds and how badly you need the money. The best case scenario is that you will lose between 15% to 25% on your original purchase price.
Some jewelers may allow you to display your diamond ring in their store and try to sell it in exchange for a commission. The advantage of this system is that you might get a higher price, and you can reclaim your ring at any time. The disadvantage is that you might have a long wait until a sale. Better jewelers will display your ring on their website which may speed the process up – and make it easier for you to keep track of the price.
It’s definitely possible to sell your diamond ring independently on eBay, Craigslist, Etsy or one of the other online sales places. The main advantage is that you can hold out for the highest possible price and sell entirely on your own terms. But that’s about the only advantage. Selling independently comes with a lot of hassles and some potential dangers.
Items like diamond jewelery are a magnet for thieves and fraudsters and you will need to take both physical and online security precautions. You will also have to take responsibility for secure shipping and insurance, and have a contingency plan in case the buyer demands a refund. You will also need to persuade potential buyers that you are honest and reliable and that your diamond is certified and legal.
Online buying services like Gemesti offer the best possible combination of fair prices, personal security, convenience and professional expertise. Their service is designed to allow a complete transaction within as little as 48 hours from first contact to final payment. This is impressive when you consider that each diamond ring will be collected by FedEx, flown across the country for a laboratory appraisal before the sale is closed and your money transferred to your account.
The advantage of Gemesti is that there is no obligation to sell your ring – at all. You can back out of the process at any time and they’ll return your item of jewelry free of charge. If you do sign the final contract, your payment will be processed that day. Gemesti assigns each client an account manager to guide them through the sales process and ensure that there are no glitches or issues.
How to Sell your Diamond Ring Online
Complete the self assessment form
This is a short process that allows you to describe your item of jewelry and upload any photos or certificates.
Receive an initial offer from Gemesti
This is a provisional offer based on the info you just provided.
If you’re happy with the offer, you’ll receive a FedEx barcode that entitles you to free secure shipping. FedEx will ship your item straight to the EGL USA laboratory for appraisal.
Your jewelry will be evaluated by an independent gemologist. Gemesti will make a final offer based on the lab report.
If you accept the offer, you’ll be asked to upload a signed sales agreement. Your money will then be transferred to your account.
If you decline the offer, your jewelry will be returned free of charge by secure courier.
Gemesti insures all its free FedEx shipments up to a value of $100,000 giving you the highest level of protection. As an additional security precaution, the EGL USA laboratory staff film the opening of your package. There is a permanent record of the arrival and processing of your jewelry.
If you want a fair market price, and the peace of mind that comes from dealing with professionals, Gemesti is your first choice for selling your diamond ring. They also buy diamond necklaces, pendants, tennis bracelets and earrings.