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Are there certain diamond types that are easier to re-sell?

Discussion in 'RockyTalky' started by GREAKLY, Feb 13, 2013.

  1. GREAKLY
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    by GREAKLY » Feb 13, 2013
    I want to buy my wife a diamond ring. I clearly understand that diamonds are a very bad investment, so we do not plan to make any money on that ring in the future. However, if rainy day comes, I want to be sure that she is able to sell that diamond fairly fast and with as little loss of money (as compared to the original price) as possible. I also understand that it has a lot to do with where I buy the stone in the first place. But that issue should be mostly resolved by using the diamond search engine of this site :D

    In other words, I am trying to find a type of diamond (size, cut, color, clarity and etc), which loses least of its value when re-sold. I understand, that just like in any other business (I work in sales myself), there are always certain types of mid-range items, which are more in demand than others. Hence, dealers are more eager to buy them and are willing to make less profit, knowing that it would be a easy "quick buck".

    I was trying to identify such diamonds. My wife likes square stones, so princess cut was a no-brainer. As for the rest of Cs, I pretended that I wanted to sell the stone, which I am about to buy. After searching the Internet I realized that most of those "I buy diamonds" sites want stones of no less than 1 ct, no less than H color and no less than VS2 clarity. Anything below that seems to be either not wanted at all or paid with a penny on a dollar.

    Are my conclusions correct or am I missing something? I mean, if I want to buy a stone, which, if need be, would re-sell faster and with a lesser loss of value I should chose from 1+ ct, H+, VS2+ ones? Or shall I go into G and VVS2 territory? I understand that round diamonds are somewhat more popular than princesses, but this factor I couldn't change :) I also understand that ever changing fashion makes certain types of diamonds more (or less) popular from time to time, so I am focusing on picking the best re-sellable diamond strikly from within the princess cut.

    Any input would be greatly appreciated.
     
    


    


  2. Bigwrecked
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    by Bigwrecked » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    I'm far from an expert on the subject but I can certainly relay my personal experience. I was recently attempting to (a) sell/trade a EGL 1 carat round stone (G/VS2/Good cut) and (b) purchase a princess cut stone.

    Here are a few observations/things I was told:

    -While Princess cut stones are the second most popular cut (after rounds), a large local jeweler told me he sells 8 rounds for every princess. I would assume it would be easier to resell a round than a princess.

    -Even though my round stone did not have the most desirable certification (EGL), jewelers who regularly purchased stones all made offers for it. These offers varied from 25%-60% of the purchase price. If I knew then (when I purchased the stone) what I know now (thanks Pricescope) I would have purchase the stone for considerably less and been able to recoup 70-75% of the purchase price.

    -My take on the whole process is that stones of varying quality are sold every single day. Most people are not purchasing colorless stones with great clarity. If you are worried about resellability the focus should be on value. If you pay a good price for a desirable stone, whether it is EGL or GIA, F color or J color, then you will not have a problem reselling the stone and will be satisfied with your return. If you pay too much for your stone, then you wont be satisfied. It's really that simple.
     
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  3. dreamer_dachsie
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    by dreamer_dachsie » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    I think there is a HUGE difference depending on where you were trying to resell. Private sale? Consignment? Niche market (e.g., Pricescope consumers) or general market (e.g., ebay)? So many variables.

    These types of considerations are important to me as well and I think the best way to ensure you can recoup your investment is to buy a diamond on the secondary market from a reputable consignment vendor (e.g., Jewels by Erica Grace) or from other estate sources. This takes time and energy, but you can resell at close to, or in some cases more, than what you pay. If you shop wisely.

    If you buy on the primary market I think you an hope to recoup at most 70% of current retail value, but usually closer to 50% of current retail value.

    And if I was buying new I would get a modern round brilliants with a GIA report. I would avoid branded cuts, which carry a premium to purchase but may not maintain that premium on resale to anyone other than a PSer who appreciates cut perfection. Most diamond brokers or lay people will not pay more for the brand or for H&A. I would get a GIA Ex. I am not sure color and clarity matter as much, but G-H and VS2 seems to be a sweet spot for many buyers. Diamonds with those specs sell well on ebay, it seems, which is a decent test of general sale-ability.
     
  4. JulieN
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    by JulieN » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    Rounds, definitely.

    The less of a premium you pay, the better. G-I, VS2/SI1.

    This might be unpopular, but if you are worried about her security, it is better to spend less on the ring, and put some money into a somewhat liquid account.
     
    


    


  5. MichelleCarmen
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    by MichelleCarmen » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    Hi,

    I sold some scrap gold and was also told that 1 ct or higher was the size that would be purchased, BUT, one jeweler tried to buy my necklace off my neck and that diamond was smaller than 1 ct. In fact, it is only .38 cts. The difference between my diamond necklace and others is that it is custom made and the chain is heavy duty platinum. So, it came down to it having higher quality and being a custom piece, rather than a dime-a-dozen diamond. Regardless of size, you would want a well-cut stone if there is a chance of being able to resell it.

    If you're worried about loss of money if you were to resell, then you would want to consider the second-hand/pre-loved market.
     
  6. diamondseeker2006
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    by diamondseeker2006 » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    I agree about G-H VS2, GIA Excellent cut, and a round. I think princess cuts are much less in demand than rounds and will go out in and out of favor which is never true of rounds. But if princess cut is what she wants, get it. It is a gift for her and not an investment.

    Ditto to Julie. We don't buy diamonds with any thought of ever needing to sell. Your investments and emergency funds should be intact before buying luxuries.
     
  7. oldminer
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    by oldminer » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    BUYING RIGHT is the way to getting the most percentage of retail back if you need or decide to sell. You can't make up for an impulsive purchase at too high a price later on (luck aside).

    Paying a premium for a currently branded cut might work out well or might work against you. How well that brand will remain in the market and respected is an unknown at the time you buy. If you pay a premium price for a brand, you might consider the strength and longevity of the brand in your equation.

    Buying what is currently popular may work well or may backfire, too. There were times where pear shapes and marquise shapes were well received. It is a lot like wide or narrow ties, or short or long skirts. Fashion is something we can count on to change, but e cannot know exactly how or when.

    A person selling a second hand diamond will find that diamonds of 1 carat and larger have far more interest in the secondary market than smaller diamonds under 1.00ct. Every diamond of better than junk quality has a value, but people find it very difficult to sell for the secondary market value when it seems so low to them. Can't say I blame them for feeling that way. Reality is not always welcomed.

    Truthfully, there is a glut of 1 carat diamonds, too. The market interest in diamonds below 1.50ct is strong on the very best cut stones, but not on even slightly off make stones. In larger sizes of 1.50ct and over the market has a bit more strength and flexibility on cut quality.
     
  8. kenny
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    by kenny » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    I'd look at peak demand for new diamonds.
    Based on reading PS for several years I'd guess the most in demand diamond would be a 1 ct G or H eye clean VS2 or SI1 round with a GIA report.
    Second would be a 3/4 ct round of the same specs.
    Next, a 1/2 ct.

    I would think the easiest to sell used would be the same as the most in-demand new diamond.

    Actually since the majority of buyers out there are not educated by Pricescope, an EGL stone may be easier to sell since almost all of the public is ignorant that their color and clarity grades are lies, and they "seem" to be a "better deal".
     
  9. Laila619
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    by Laila619 » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    Ideal cut rounds are definitely your best bet. I was able to sell an AGS graded ideal round purchased in 2009 for a small profit in 2011. I think other cuts just aren't as easy to sell.
     
  10. fige
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    by fige » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    If liquidity is your main concern, why not buy from a vendor with a buy back policy? GOG for example will pay you 75% of the purchase price for stones covered by their lifetime policy.
     
    


    


  11. kindred
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    by kindred » Feb 13, 2013
    Re: Are there certain diamond types that are easier to re-se

    That is exactly what I was going to suggest. Good Old Gold is a great place to buy from in general, but their buy back policy makes them even better.
     
  12. GREAKLY
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    by GREAKLY » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    I very much appreciate everybody's input. I do understand that rounds are much easier to sell than princesses but, unfortunately, the shape cannot be changed :( Besides, princesses seem to cost somewhat less (about 20% difference) than rounds (when comparing stones with similar Cs). I guess, that's the reflection of the popularity. So, while it might be a bit more difficult to sell princess diamond if need be but, on the other hand, I would have to spend less on it upfront.

    They "-25%" buy back policy of Good Old Good sounds great until you actually check prices of their diamonds against the competition. It seems that for similar stones GOG's asks about 12-15% more. Which basically means that other guys (like B2CJewels, Enchanted Diamonds, Solomon brothers and etc.) are simply willing to operate on a lower profit margin (about 10-12%). Essentially that means paying up to an extra 15% to GOG for a possibility of a hassle-free buyback. To me it doesn't sound like a good deal, especially on a $5K stone.

    While I would certainly love to have GOG's guaranteed buyback possibility I am not willing to pay $500-800 extra for it. The whole scheme sounds to me just like that extra warranty offered in electronics, furniture and other stores. It has a lot of limitations (not all of their diamonds qualify). Given that return possibility in my case is quite low, I'd rather pay about 10-15% less to begin with and have a bit bigger hassle selling the stone should things get bad.
     
  13. dreamer_dachsie
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    by dreamer_dachsie » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    GOG are a brick and morter store which explains their higher pricing compared to those other vendors you mention, who are drop shippers. They also offer more services (photos etc).

    Anyways, neither here nor there. You spend your money how you want and everyone values different things.

    FWIW I believe that Infinity offer an 80% buy back policy.
     
  14. fige
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    by fige » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    I agree with Dreamer, it's your money to spend however from what I understand, GOG only provides the buy back to their best cut stones. The price descrepancy may also be a premium for the performance. I'm not sure what you're looking at, but something to consider.
     
  15. Paul-Antwerp
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    by Paul-Antwerp » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Greakly,

    I think that you are making an incorrect comparison. Simply stating that one vendor is more expensive for 'similar' stones is not correct. Every vendor offers a different level of service, and this affects pricing. There is a huge difference between a vendor flogging a report without ever seeing the actual diamond, and one selecting his own inventory in order to truly serve his clientele.

    In some way, this is also reflected in a buyback-policy. To me, it is an indication of how the vendor (who knows the diamond best) values his own product. Vendor A selling for $5,000.-, giving an unlimited buyback of $3,750.- is totally different to vendor B, selling something 'similar' for $4,500.-, giving you no buyback-guarantee whatsoever. To me, it says that vendor A values the diamond to be worth at least $3,750 for him, while vendor B values the stone he sells at 0.

    In the end, he who knows the product best, will pay the highest price for it. In the case of a diamond, I consider the selling vendor to be best in the know. In that sense, it reflects very badly on vendors who decline any buyback-guarantee.

    Live long,
     
    


    


  16. MsP
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    by MsP » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    I think this really depends-- if you're looking to sell privately online (ie loupetroop, diamondbistro, or JBEG) I think buying ideal is a good suggestion.

    However, I think if you're looking to go down to your local jeweler and get cash for a ring, I doubt you'll get much money for having good numbers. I completely agree with the round cut though-- and being graded. My local jeweler laments how difficult it is for him to "sell" customers on paying for ideal cut over "normal round cut".
     
  17. diamondseeker2006
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    by diamondseeker2006 » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Nice post, Paul! (Who incidentally cuts some of the finest stones in the world!)

    In addition to providing more services, if one compares Good Old Gold's inventory to any of those drop shippers, well, we can see why the diamonds cost a little more. You won't find too many hearts and arrows diamonds or ideal cut princess stones and certainly no other specialty cuts in the drop shipper's list. And I would only buy an ideal cut princess stone. Good Old Gold's buy back policy is the best insurance, hands down.

    But just FYI, I bought a hearts and arrows diamond from GOG in 2006 and sold it (through them) after commission in 2012 for a $6000 profit because diamond values had risen over that time. So I am going to say that buying top cut quality certainly benefited me.
     
  18. CharmyPoo
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    by CharmyPoo » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Very lengthy replies so I haven't read them.

    Ideal rounds are the best way to go.
     
  19. Paul-Antwerp
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    by Paul-Antwerp » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Advising with certainty about future price-values obviously is not without risk. Even with the best intentions, one could be completely wrong.

    However, since rounds in the past have always been 'in demand', one can assume that the demand for rounds in the future is much more assured than that for any other shape, who have always displayed a pattern of being either in or out of fashion.

    As for cut-quality, the label 'ideal' of today offers a higher degree of desirability. But please bear in mind that all major labs have adjusted and strictened their cut-grade-systems in the past years, and with ongoing research, one can expect further movements in this direction.

    Obviously, a current buyback-policy offers a floor to work from. Over time, one can do much better with certain stones, as some have testified here, but having that guaranteed floor definitely is a plus.

    As for simply sticking to ideals, I would advise some caution. I see diamonds sold here, with ideal-grades, where for some, I would gladly offer 80% buyback, while for others, I would not even pay 60% buyback. Bear in mind, that is based on paper-information only, and based on the current sales-price of other vendors. I thus see enormous differences in value-for-money within Ideal. Most of the times, the main difference is not the current cut-quality within Ideal, but more whether there is sufficient excess-weight to allow a future re-cut within the same size-category. For me, a low-level-Ideal of 1.15Ct has more value-for-money than an almost top-level-Ideal of 1.01Ct. Again, this is a case-by-case-evaluation, that are difficult to translate into a general rule.

    Live long,
     
  20. TC1987
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    by TC1987 » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    ( ^ Just fyi, OP. Paul and Wink (winkjones.com) perhaps only buy to recut to Crafted By Infinity specifications, which focuses on getting the best performance, not a compromise between weight retention and performance. Or at least that's what was said in the past. All they sell is Crafted By Infinity, and not all ideal-cut diamonds will fall within their specifications. So, what they might buy, they will either recut or swap or trade-in or whatever, but it won't be sold at retail, based on what they have said here over the years. Some other vendor who will buy it and resell it as-is might have less-strict acceptance criteria.)
     
  21. Wink
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    by Wink » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Thank you for your kind post. You are correct, when I buy a round that is not a Crafted by Infinity I will pay for it what I think it will be worth to me after having Paul recut it to his standards. thus I usually will offer carat money only on stones large enough to cut a carat. Occasionally Paul will flip a stone for me in Antwerp if it is not worthy of a recut, but our clients are NEVER happy about the price when this happens.

    One factor that I do not believe has been addressed is the difficulty of getting properly cut princess cuts. If you had been here during the "Cut Wars" you would have seen the thrashing that AGS took over their princess cut grade with everyone having their own opinion of what is best.

    Frankly, a lot of the AGS 0 cut grade princess cuts do not cut the mustard with many of us. GOG carries a princess that costs more than some of the other AGS 0 cut grade princesses and he is willing to pay more to buy them back.

    As Paul says, he knows what his stones are worth to him. You will have to be the one to answer the question about what are they worth to you. I have competed against Jon long enough to know that his margins are hardly what I would call excessive.

    Just my thoughts.

    Wink

    P.S. One minor correction, my email is at winkjones.com, but my website is www.HighPerformanceDiamonds.com..
     
  22. bunnycat
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    by bunnycat » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    One thing that hasn't been directly pointed out, but implied is that when OP referred to "cut" he is referring to "shape" and on PS, anytime the word "cut" is referenced, it is for QUALITY of cut of a particular shape, not the shape itself.

    So OP, I don't know if there was any confusion about this for you, but when people on here reference cut and buy the best and you say you can't change a princess to a round, because in your view maybe a round is the best cut SHAPE, that is not at all what they are referring to. They are referring to how well a stone of whatever shape has been cut to maximize its performance as a stone in terms of doing what diamonds do best- return light and sparkle. They do that best when they are cut to the correct proportions, and not all stones have been cut with that in mind. The ones that are cut well, I think will tend to be easier to sell, should you want or need to (but the comment about branded cuts that appeal to niche markets probably applies). There are many stones out there that are cut less than ideally, to retain weight or for some other reason, but not specifically for performance. That is actually a relatively new concept in the diamond world.
     
  23. dreamer_dachsie
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    by dreamer_dachsie » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    I agree with Ms P. In fact, if someone wants the quickest and easiest diamond to liquidate for the most percentage back, then it might not even be the best thing to buy a GIA Ex cut stone at all! On ebay and pawn shops and other "fast money" places you never get back what you pay for top quality, but you can yield a decent return on "middle of the road" specs.
     
  24. Gypsy
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    by Gypsy » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    I would shoot for a G VS2 or eyeclean SI1. Round Brilliant with GIA graded Ex/Ex with a nice ideal scope image. Whatever size you want, but those specs.

    Also... you can do what I do for the most part now. I buy a lot of my stuff second hand already. And when I re-sell I can usually get at least what I originally paid. If it's new, you drive it off the lot (so to speak) and it loses a ton of value. So... by buying pre-owned you don't absorb that deprecation, instead you benefit from it.
     
  25. denverappraiser
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    by denverappraiser » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    The hard part of selling diamonds is in the selling, not in the diamonds. This is not so different a situation than nearly everything else you buy. Another alternative for minimizing risk is at the very low end. Buy an I2/K for $1000 and the most you can possibly lose is $1000. In practice, if you buy it right and are decently good at selling things, you’ll probably be able to get most of it back on resale but even if you lose 50%, that’s only $500. Bottom feeders out there looking for a bargain are actually easier to find than serious buyers for premium sorts of goods. If you buy a $8,000 stone and you ‘lose’ 25% on the dealer buyback plan, that’s a $2000 hit.

    The difference, of course, is in your enjoyment of the stone. Presumably you and she will like the more expensive one better. That’s why it’s more expensive and that's why it's worth considering springing for the extra money. In all honesty, that’s where I think you should concentrate your energy. Get the right thing for YOUR taste and don’t worry all that much about what’s popular on the secondary market.
     
  26. heididdl
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    by heididdl » Feb 14, 2013
    Re: Are there certain diamond types that are easier to re-se

    Sorry Mc he wanted your necklace for the platinum for which is now a t 1740 per dwt as opossed to 24k gold at 1640.0

    Regarding buying rings for resale...You guy your ring because you love idt. I buy gold/diamonds for a living and we try not to buy stones under 1 carat. Next we consider those with GIA certifications with ideal to excellent cuts. Most of the public buy stones in the G-H color range Vs-S12 clarity. So this is what we prefer to buy

    Shape round brillant is number one stone to purchase. The princess cut 3rd choice. This being said buy your gal the stone that she will love and enjoy and not worry about resale no matter how much or how little you pay you'll never get your money back
     
  27. madlava
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    by madlava » Feb 15, 2013
    Re: Are there certain diamond types that are easier to re-se

    this is a very interesting topic.
    i have an F SI1 that is slightly over 2 carats (GIA XXX).
    what would be the demand for such a diamond?
    i wonder if I should have gone for the lower color G-H and higher clarity route.
     
  28. MichelleCarmen
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    by MichelleCarmen » Feb 15, 2013
    Re: Are there certain diamond types that are easier to re-se

    The necklace weighs seven grams. I don't see how he could have made money from the platinum. He offered me more for the necklace than what scrap platinum sells for.
     
  29. GREAKLY
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    by GREAKLY » Feb 15, 2013
    Re: Are there certain diamond types that are easier to re-se

    I respectfully disagree. The fact that a certain vendor doesn't offer any buyback policy absolutely doesn't mean that he values the stones he sells at 0. It merely means that he doesn't have the financial backup to offer the buyback. Naturally, drop shippers have virtually no stock. So, they operate as a middleman between whoever puts the stone for sale on rapnet (or some other network) and the customer who wants to buy it (but doesn't have an access to rapnet). In order to compete with the big guys drop shippers are willing to make smaller profits. The fact that GOG and the likes are offering buyback policy doesn't make their stones any better. But it sure does make them 10-15% more expensive.

    So why should I pay that 10-15% extra solely for the fact that GOG and others are backed up by a bank? Why should I care which company has more financial resources and which doesn't? It's not like I plan to invest in them. All I want to do is to buy a single diamond, based on its description in the GIA report. If rapnet was open to the general public we even wouldn't be having this conversation. I would have simply bought the diamond directly from the "original" vendor.

    What GOG, Infinity and others who offer buyback policy do is pretty much the same to what I am trying to do in this topic. They identify diamonds with the highest "sellability" (it seems to be the common wisdom of this topic that those are 1+ ct rounds, G-H, VS2+, excellent cut) and try to buy them for their stock. Later they offer those diamonds with a buyback guarantee, knowing that if any of those stones ever come back they would be able to re-sell it fairly quickly. Gosh, that's exactly the kind of stone I was looking for (except for the inflated pricetag).

    Hypothetical example. Suppose there is a cutter in, say, India, who wants to sell his GIA-certified stone (1 ct round, H, VS2, excellent cut) on rapnet for $5K. GOG wouldn't buy it for themselves, because they see it retailing at 6$K max. Which doesn't give them enough profit. They would have been happy to buy it for $4,5K, but Indian cutter would not sell it that low. Then comes some drop-shipper from NY diamond district and puts this stone on his website for $5,5K (10% markup). If GOG were to put that particular stone on their website they would have priced it at least $6,5K. Again, this is exactly the same GIA-certified stone we are talking about.

    So, in this scheme why shall retail consumer pay to GOG for the same diamond at least an extra 1$K? For the remote possibility of buyback? Well, the probability of selling the stone is not that high. And, if that happens, the consumer still should be able to get $4,5-5K for it by simply going to his local jeweler, who, for a mere fee of $100-200, would put the stone to the very same rapnet.

    If diamonds with buyback guarantee were sold for the same price (or a little bit more) than the "regular" ones, then I would see some value in it. But for 15% extra it doesn't make much sense to me...
     
  30. Bigwrecked
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    by Bigwrecked » Feb 15, 2013
    Re: Are there certain diamond types that are easier to re-se

    I think you are missing the point. Just because two vendors each have a diamond in stock does not mean those two diamonds are equal. Even if the two stones were the same weight, color, etc. There are many other factors to consider.

    Now, if you were making your argument about a local jeweler it might hold some credence. From my experience, the stones these stores typically have in stock are random and no better or worse than what you might purchase from a drop shipper.

    But you are pointing to vendors with a reputation for selling well-cut high quality stones as examples of Brick and Mortar stores treating themselves to an unnecessary premium.

    You are certainly entitled to your opinion, but my guess is you have never seen a stone from any of these vendors nor do you fully comprehend the difficulty you will have locating a well cut princess stone.

    When you purchase from one of these vendors you are not paying a premium for the buyback policy. The buyback policy is incidental to the purchase of a high quality stone. It exists because well cut stones are difficult to locate and always in high demand.
     

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