Budget and pricing: answers from a diamond dealer (page 1 of 4)

As a dealer, I can tell you, nobody PLANS to sell a ring the day they buy it... But lots of people do eventually want to turn their jewelry back into money. There are lots of potential reasons for this. By far the most common is upgrade. People move up to larger/better diamonds to celebrate milestones (birthdays, anniversaries, etc.) and they like to get value back out of their rings when they do.

Of course, there are also less positive reasons (financial hardship, end of relationship, etc.). We don't like thinking about these things, but they do happen.

For variety, it's hard to beat some of the big online retailers. But (as you can imagine) quality and variety can often be at cross purposes. The more different dishes a restaurant makes, the less likely each dish is to be awesome, you know?

For quality, your best bet is usually a private dealer or jeweler. Sorry if that sounds self-serving (because that's what I do!), but it's the truth.

Do you know what shape of stone you're looking for? Size? Budget?

Very, very little. These are sales tools, designed to create a perceived difference between similar stones where little true difference actually exists - or at least, very little difference in any real world circumstance and lighting condition.

To me, the evidence of this is obvious. I have been working in the wholesale diamond space for over 20 years. I have bought and sold many thousands of diamonds to other industry professionals. In all that time, I have NEVER calculated one of these scores for my own use, nor has any professional EVER asked me for an HCA score, StoneAlgo score, etc. Professionals don't use these tools. If we thought they added value, we would.

So if the pros don't think these tools are useful, why should consumers?

To the shoppers out there: The best tool for evaluating the beauty of the diamond is your own eye. Look at the stone and see if you like it! If you can't see the stone in person yourself, work with a trusted expert who can act as your proxy. A diamond is not an algebra assignment! Each stone is unique, and should be treated as such. Of course, cut matters. It matters a lot! But think of it this way - if you don't love the stone, the paperwork doesn't matter. And if you DO love the stone, the paperwork doesn't matter!

That's a tricky one! You don't want to alienate them by "underspending" on their daughter, who they clearly dote on, but you also don't want to overspend and stress yourself out financially.

What's YOUR financial situation? What's a reasonable budget for YOU? An engagement ring is meant to be a symbol of commitment, so it should be expensive enough that you have to think about it (whatever that means to you), but it shouldn't become a burden or source of stress.

I have posted extensively on this topic. Check my post history!

I buy stones overseas all the time. It's literally my job. The difference is that I have ongoing relationships with manufacturers, so if I have a problem with a stone, I have recourse as they value my continuing business. You won't have that.

And even so, sometimes I get stuck with a dud of a stone (strain lines, gray overtone, haziness, etc.) and have to dump it in the wholesale market for peanuts. It happens. Part of business. But I suspect you wouldn't be happy about dumping a stone and buying another.

LOL got it!

I get the desire to be cost efficient... But a lot of the stones on LGD are cheap for a reason. Striation, strain lines, phosphorescence, brown undertone... All these flaws don't show up on grading reports, but they DO affect the stones' appearance. Cheap stones are cheap for a reason!

I'd recommend finding a good dealer or private jeweler (local or remote) you trust and working with an expert. You'll get a much nicer stone and better value.

I have posted extensively on this topic. Check my post history!

LGD is racing to the bottom on prices. They're representing manufacturers who are trying to grow stones as quickly as possible, to hit a price point rather than a standard of quality. There are certain "short cuts" you can take when growing an LG stone, which often (although not always!) compromise the stone's light performance. So, LGD offers those stones at very aggressive prices, figuring that customers who are looking for the lowest price might not be too discerning about haziness, blue undertones, striation, etc.

It's possible to find lovely stones there... But a lot of them aren't.

That's a short question with a long answer. Honestly it's best if you ignore it completely. It really isn't meant for consumers.

EDIT: Just so you don't think I'm blowing you off... The best way to use the list is to compare similar but different stones. For example, if I want to know what's currently more valued in the market, G SI1 or H VS2, I might check the Rap list to see which one is higher. Stuff like that. But we don't just read the list and buy or sell at those prices - we negotiate discounts (or premiums) from the list on a stone by stone basis.

Basically what I'm saying is that the professionals know how to game this system better than a consumer ever will. If a dealer is holding a stone that he thinks he'll get more money for by certifying it, he'll do that 100% of the time. So if you ask for "HVS2 Ideal uncertified" you'll get exactly that... But they'll be hazy, fluorescent, etc. There will be some deficiency that would have shown up on a report that the dealer was hoping not to have to discuss.

All of this is a long winded way to say that nobody is going to sell you a dollar bill for $0.80.

Note, this doesn't always apply to smaller stones (under 0.5 carats or so) where the cost of the report itself becomes a meaningful part of the price.

Seems like a nice stone. Stones like that are going at wholesale between $15k and $20k or so... But it will be hard for you to get that, since you're not in the trade.

Have you tried having an honest conversation with your jeweler? He may not have paid for the stone yet, and perhaps could return it to his supplier. You'd still be on the hook for the setting (since the labor cost can't be recovered), but that seems like the best case scenario for you.

Don't expect to get any value for the setting. The only thing that's retained value is the stone. You paid about 10k and are being offered 7500, right? That's not necessarily so bad. But perhaps you can improve it. Since you've had multiple offers, go around again and see if anyone will come up a little. Maybe you can get to 8k or 8500.

Without knowing the details of your stone, no one can tell you the present market value. Can you post the certificate? Photos? You'll get better advice then.

Pro tip. Don't walk into the store and tell them you want to sell your ring. Walk into the store, show them your ring, and ask them how much they would charge you to make an identical one. Tell them it's your sister's ring or something and you're looking for a duplicate. Then once you know that number, take off 30%, go to another store, and see if you can sell it for that much.

You will do much better walking into a store, offering them the ring, and telling them how much you want to get for it than asking the open-ended question, "how much would you pay for this?"

That photo isn't of a diamond - it's of a piece of jewelry containing several small diamonds. When you bought that, you paid for the diamonds... And the gold, and the labor of making the piece, and the design, and the jeweler's markup. You didn't just buy a diamond! So, if you sell it, you may be able to recover the value of the stones and the gold, but the rest is gone. It's not that the diamonds have lost value - it's that there's more to the pendant than that!

India is one of the three largest cutting and trading centers in the world (the other two are Tel Aviv, Israel, and Antwerp, Belgium). Other major markets include Dubai, Shanghai, Hong Kong, London, Los Angeles, New York, and others. So, if you're in one of those centers, have access to a true wholesaler, and (most importantly) have the ability to abide by the terms of wholesale (buying large quantities of stones, committing to regular repeat purchases, understanding that there are no returns, trade-ins, exchanges, or after purchase support of any kind, etc.) then you can save some money. This is the nature of the wholesale business in ANY industry. You can get a volume discount, but you have to buy in volume! And in diamonds, that discount isn't as significant as it is in many other industries (clothing springs to mind as one with MASSIVE markups).

In the diamond space, the largest markup occurs at retail. For example, I have a client who owns a large fancy jewelry store in Florida. He tells me that every diamond I sell him gets marked up 65% (this is many times my margin!). Why? Because he has to pay his diamond supplier, his sapphire supplier, his pearl supplier, his gold supplier... And Rolex, and gold, and silver, etc etc... But beyond that, he has a staff of more than 30 people, a 6,000sqft store, insurance, utilities, and more. And let's not forget the $10,000 he spends EVERY DAY on marketing. Online ads, TV, radio, billboards, bus sides, you name it. He has bills that I don't dream of in my worst nightmare. So of course he has to mark up the diamonds! Otherwise he can't keep the lights on.

So, if you want to avoid retail markups, don't shop retail! Find a good, honest, reputable dealer and work privately. You'll get much more bang for your buck. You'll also often get better expert advice. For example, my business specializes in diamonds and diamond jewelry. If you come into my office and ask to see my selection of pearls, or watches, or rubies, I have nothing to show you. My expertise and inventory are invested in diamonds. Retailers, by their nature, have to be generalists. They have no idea who is going to walk in the door tomorrow or what they'll be looking for. I, on the other hand, am a specialist.

As an analogy, if you don't feel well and don't know what's wrong, you probably want to see your family doctor. That's your local jeweler. But if you know you need open heart surgery, you want a cardiothoracic surgeon. That's me. If your knee hurts, or you have the sniffles, I'm not your guy. But if you need your ticker tinkered with, give me a call.

I hope that helps!

Natural diamonds have been an instrument of value for thousands of years. They hold value because they are a commodity. Supply is finite (the Earth only produced so many), and that number is rapidly running out. In fact, global diamond production peaked in 2006, and we've found fewer every year since. The planet is running out. Meanwhile, demand continues to grow globally. So, diminishing supply and increasing demand... Econ 101.

LG diamonds, on the other hand, are not a commodity. They are a consumer product. They can be produced in practically infinite quantities. And the technology continues to improve, making them easier and cheaper to create every year. So, supply is actually growing faster than demand, which leads to falling prices.

I hope that helps!

An engagement is a symbol of commitment. Your partner will view it as a symbol when you give it to her (pardon the guess on pronouns - it just makes the writing easier!), and the world will view it as a symbol when she wears it.

Now, that doesn't mean you have to spend a fortune. But the general idea is that it should cost an amount that is meaningful to YOU. In other words, it shouldn't be a "disposable" amount. But it doesn't have to be HUGE MONEY either. Find an amount that feels significant, but not absurd or burdensome, to you, and that's what you should spend.

That's harder to answer than it seems, because there's no definition of "retail price." Retail at a mom and pop store? At the mall? At Tiffany? They're all quite different from each other!

I work as a private dealer, so retail markup just isn't part of my lexicon.

As far as wholesale value, that's a bit more consistent. Customers can expect to retain a substantial portion of that. Possibly all of it. And of course, if the consumer has held the stone for a while and it has appreciated, profit is entirely possible. The challenge is that dealers tend to be shrewd negotiators (they get a LOT of practice at it!) and if they sense an opportunity to buy a $1 bill for $0.75, they're businesspeople and they're going to take it. So a consumer has to be ready for that. There's no "frictionless" way for a consumer to sell a stone at full value to a dealer. Everybody wants a bargain, and dealers are no exception!

TL;DR: If a consumer buys properly and works diligently in the sale process, he/she can expect to retain the vast majority of a natural diamond's value. Possibly 100%. Possibly more. But there are a number of "ifs" at play there.

Yes, it matters a great deal. Having a certificate provided by the seller is like letting a middle schooler grade his own homework. Hey, what do you know? Straight As!

If this store thought the stone would get the same grade at GIA, trust me, they would send it to GIA. As you have seen, the market value of a GIA stone is several thousand dollars higher, so why would the store forego that?

And "custom cut" diamonds are a bad idea. The resale market (and thus the retained value of the stone) is far smaller than a traditional cut.

Stay away from that store.

But that doesn't mean you can't get a great stone in your price range elsewhere!

From a good dealer or trusted source who isn't charging you a retail markup. And a stone that's commercially viable (no "sicknesses" in the stone).

Diamonds are highly commoditized, and the prices are very well understood within the industry, which has razor thin margins. So, if you buy a natural diamond correctly, and hold it for a while, you are likely to recover most or all of your money when you sell, and possibly make a profit.

Source: this is literally what I do for a living.

Lots of things are sold for a lot of money at retail, and then have little to no value in resale. That's not unique to LG stones.

Lab grown diamonds are a consumer product. They are mass produced in large quantities, and supply is growing rapidly. As a result, prices are falling just as rapidly. So, if you buy an LG for $10k today (for example), you will likely be able to find a similar LG for $5k, or $3k, or $800, a few years from now. Dealers and sellers know this, so are very reluctant to buy a product like this secondhand, when they know the value is diminishing.

In contrast, diamonds are a commodity. There are only so many to be found on Earth, and supply is running out. In fact, peak global diamond production was in 2006, and we've managed to find fewer and fewer every year since. In fact, one of the largest mines in the world (Argyle, in Australia) recently closed - they simply ran out of diamonds to mine there. And several more are scheduled to close in the next year or two. At the same time, global demand for diamonds is rapidly increasing, and supply can't keep up. So, prices are rising, and fast. Prices of natural diamonds rose 15-30% last year (depending on the type of stone), and they continue to rise. As a result, dealers (like me) are happy to buy a natural diamond, stick it in the safe, and wait. We know it will be worth more in the future, and I for one would much rather have my money in diamonds than in dollars these days.

In the long term, natural diamonds are an appreciating asset, and LGs are a depreciating one. Simple as that. I know this sub is very pro LG, so this isn't a popular thing to say, but it is a statement of fact. And for your reference, my company works with both, so I don't have a dog in this fight. I just want my clients (and the reddit community!) to be well informed.

If you don't like the stone you have, the best way to preserve value is to exchange it for another natural diamond. Failing that, sell the stone, convert it to cash, and make the best deal you can on an LG. Just know that whatever you spend on the LG won't be recoverable.

It looks like a nice stone.

However, I'm sorry to say, the brand value will be very hard to recover. An identical ring can readily be made for $60-70k, so if you're able to find a retail buyer you'll be taking a 50k loss. Obviously selling into the wholesale market will net you less, since those buyers will expect to be able to make a profit.

You might be able to get just a bit more at auction, where the Graff name adds some potential... But I don't know.

Hi all! As many of you know, natural diamond prices have risen dramatically this year. I just had an object lesson reminding me of that. We sold a stone this morning, which I had taken on consignment from a friend of mine. When I looked up the data on it, I realized we had worked with it before, almost exactly a year ago. The difference in my cost from then until now was 24.7%.

That's right - a roughly 25% increase, for the same stone, from the same supplier. Now, this was a premium, very high end stone, so maybe it increased a little bit more than average... But not much. That data point is pretty indicative of the overall market. And, for the record, I'm expecting more price increases in 2022. Supply is very, very short.

So, if you're shopping for a diamond, time is not on your side!

Short answer - no. There's no such marketplace. The reason for this is that when people resell their stones, pawn shops etc. are looking for a bargain. They're trying to buy a $1 bill for $0.50. But once they successfully do that, they're not about to SELL that $1 bill for $0.60. They know what it's worth, and so they sell it into the wholesale marketplace for true value.

So, now the stone is no longer "secondhand." It's a "new" stone. Which of course is a meaningless term. There's no such thing as a "new" diamond. They're ALL a billion years old!

I have a much broader sample size than most on this question since I make so many rings. Pave rings do sometimes have issues with stones falling out. It's inherent to the design. There's just not much metal holding those stones, so it doesn't take a lot for one to fall out. But it is really no big deal when it happens. It's super cheap and easy to fix.

So, if you like the pave look, by all means go for it. And if/when a stone falls out, don't panic. It's no big deal.

Sure thing!

Why would they do that? Wholesalers, by their nature, want to sell WHOLESALE. They don't want to deal with the end user. As someone who sells to both jewelry stores and private clients, I can tell you it's much, much, MUCH more work to work with private clients. Consumers need to be educated, and that takes a lot of time. Professionals already know what they want, how to assess it, and how much they are willing to spend. It's smooth and simple. So many wholesalers prefer to stay 100% wholesale. And once that decision is made, why would they undercut their loyal customers by posting price lists? By revealing the prices jewelry stores pay, the wholesaler would be harming his loyal clients' ability to earn a profit. Why would any wholesaler bite the hand that feeds him?

Again, many (most) wholesalers don't WANT to work with consumers. And also bear in mind that many jewelry stores are vertically integrated with their supplier. In other words, in many cases the wholesaler owns the store!

Diamonds are fundamentally different than consumer products like cars. A more apt comparison would be real estate. You can have two houses on the same street, with the same square footage, and vastly different prices. Maybe one is fully renovated and the other is a dump! Maybe there's a noisy bus stop in front of one of them. Maybe one has a better view. Etc etc etc. Diamonds are similar. The 4 Cs don't fully describe a diamond, and each one is unique. So it's very challenging to generalize them.

You're welcome!