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

[WinkHPD]

Re: Are there certain diamond types that are easier to re-se

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.

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...

I do not think you are getting what I and others are trying to say. Diamonds are NOT fungible. The diamonds that are worth less sell for less, the diamonds that are worth more sell for more. What you may not be able to know, without years of experience, is which ones are actually worth more and which are worth less.

If you were to have a jeweler put four or five diamonds on a slotted tray and tell you nothing of which stone is which, you would pick out the stone that is prettiest to your eye. You might be surprised which one you pick, but you would be picking which one YOUR eye liked best.

When I have done this over 80% of the time the person picks one of my stones as the prettiest and the cheaper stones were eliminated quickly. Why? Because even though they were also AGS 0 cut diamonds there was something that THEIR eye liked about the stones that were at the top of the AGS 0 cut grade over those stones that made the grade but just barely.

You keep saying that GOG is 15% over the market, but if he is offering a diamond that costs 15% more from the cutter and using a similar markup to other jewelers he is actually not over market, but at market for that stone that was cut better and that cost more to cut.

In doing my "blind taste tests" I have often had people pick out stones that were lower color and clarity grades than they told me they were looking for. Only a VERY few times, as in once or twice in the past few years, has someone actually chosen a good to very good cut over an Excellent to Ideal cut. It is this nearly universal reaction to seeing stones without knowing which is which that has led me to believe that cut is FAR more important than either color or clarity until you get into very poor grades.

My guess is that if you had one, two or three stones sent to someone like GOG and then came in to see them side by side with GOG stones after having asked that the stones be placed in a slotted tray without being told anything about them that you might be surprised at which ones you consistently chose. If you choose one of the cheaper stones, then hey, you saved some money. If you choose one of the better cut diamonds, then you would at least understand that there is a difference in the beauty. You would still be free to spend as little or as much as you liked, but you would not be doing so any longer out of the mistaken impression that the diamonds were all fungible to be chosen only by price. There are HUGE variations in the appearance of AGS 0 cut grade princess cuts. You really should see more than one before you make a decision.

Oh, and although you may not think the buy backs have value, just ask any of my clients who have exercised it what their thoughts are. If you have a family emergency and someone needs a doctor or your financial situation is suddenly bad, having that 75% buy back to set the floor on your diamond sales price will be worth far more than you thought.

Wink

(fungible = indistinguishable from one another, any one will be the same as any other.)

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

I would like to switch from hypothesises to the real life example:

Princess, 1.01 Ct, H, VS2, GIA XXX


$4542.91, B2Cjewels

http://www.b2cjewels.com/dd-3486128-1.01-carat-Princess-diamond-H-color-VS2-Clarity.aspx?sku=3486128&utm_source=pricescope.com&utm_medium=referral&utm_campaign=pricescope.com

http://www.b2cjewels.com/Certificate.aspx?StockNo=3174522


$4601, Solomon brothers

http://www.solomonbrothers.com/DiamondDetail.aspx?sku=5HY46F44&affiliate=9318613A-AD0C-4530-A456-0409DFEFB8DE%20&utm_source=PriceScope

http://www.solomonbrothers.com/Dialog.aspx?ImageUrl=http://certs.rapnet.com/userfolders/10187/Certs/4592.JPG


$4601.44, USA Certed

http://search.virtcert.com/cgi/u/1012/v.cgi?stock=15125448&_s=1012&_p=sdf348gd743&_c=&_fs=1&prestock=&_ln=ps


$4992, Whiteflash

http://www.whiteflash.com/loose-diamonds/princess-cut-loose-diamond-2827410.htm

http://www.whiteflash.com/loose-diamonds/certificate.aspx?idno=2827410&file_name=1


These are not just some "similar" stones. This is EXACTLY the same stone. Yet, Whiteflash is asking about 10% more for it than the rest of the pack. Why is that? In this case no handpicking or personalized service was done. However, Whiteflash offers 70% buyback policy. Which brings us back to my earlier question: is "-30%" buyback worth paying extra 10% of the price of the same diamond?

To me - hardly.

 

[JulieN]

Re: Are there certain diamond types that are easier to re-se

Whiteflash does not usually buy back diamonds that are called from their virtual lists.

You could probably get WF to price match... but they would not offer buyback on that, anyway... it is not a relevant example.

To YOU it may not be worth it. You should see all the rings from people who got cold feet that have been worn for "only a few months" (supposedly) on eBay, craigslist, and sites like "I Do Now I Don't."

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

You could probably get WF to price match... but they would not offer buyback on that, anyway... it is not a relevant example.

Well, that makes it even worse. If they don't offer buyback on this diamond then how they justify the extra 10% charge? I mean, with all "virtual" stones WF is no different than any other drop shipper. In such case they do not add any extra value. So, why the extra charge?

After witnessing such behavior I would be very uncomfortable buying WF's exclusive in-house diamonds. Yes, they might be handpicked and super sparkly, but, knowing how the company does business with "virtual" stones, I would be pretty sure that I'd be overpaying.

 

[Kim N]

Re: Are there certain diamond types that are easier to re-se

When WF brings in a virtual stone, they'll provide an actual picture of the stone as well as Idealscope and ASET images so that you can see the light return and (on rounds) arrows pattern for yourself. I believe most of the drop shippers won't do that.

 

[JulieN]

Re: Are there certain diamond types that are easier to re-se

I said above that I believe they will price match. WF is not a drop shipper, they do not drop diamond rings at your doorstep without inspecting them and confirming that it meets their standards.

I hope your original question has been answered.

 

[gregchang35]

Re: Are there certain diamond types that are easier to re-se

That is a great example that you have shown with respect to virtual diamonds. What is different is the service that you get from each vendor. An anology here is a car sales person. It may be a poor example but- when you look at a particular brand, make, model of a car (say the prius as an example) and you go to different dealers- you know which dealer you will go back to deal with as they connect and speak with you. One may be talking specifics and that is your lingo and the other one just talks about the ride only and does not know the specifics too well, you will go back to the dealer that you connect with. One takes time to TALK to you, understand your situation and doesnt pressure you, while another is quite mechanical in his/ her dealing with you. I hope that makes sense?

As many will attest- buying diamonds by numbers in one way, and probably not the best; but the best is to VIEW the diamond. With the vendors that you have mentioned- WF and GOG, they are a company that value their diamonds and they are passionate about their work ( well i can only speak for Jon based on the countless videos that he produces) will show you the diamond in various ways - ASET/ Idealscope/DIAMXray videos of the diamond, so that you SEE exactly what you get; before you get it. You will have a general impression of what the diamond is like BEFORE you get it in your hands.

If drop shippers can do the same, however i have not heard or seen it on here, and the diamond is cheaper through them: why not- you have saved yourself some $$. You are on a win- win!!!

 

[denverappraiser]

Re: Are there certain diamond types that are easier to re-se

Your 15% number is debatable but I’ll take your word for it. The variable you’re leaving out of the formula is YOUR ability to sell. Buying diamonds is easy. Selling diamonds is hard. Ask anyone who has done it. Your assumption is that things that are popular are easier to sell. This is not necessarily true. For starters, what’s popular now may not be popular when it comes time to sell but, more importantly, what makes some sales go faster and for money than others usually has more to do with the seller than the merchandise.

Most people who buy and then resell a diamond take an average hit of at least 50%. Often it’s more than that. Why is this? In part it’s because they paid a lot in the first place, in part it’s because they included a lot of things in the purchase that weren’t actually the diamond like setting fees, warranties, appraisals and grading services, branding and the like, and in part it’s because they’re crappy salespeople. NONE of these issues are a function of what you buy.

A buyback agreement from the dealer is a unilateral commitment to a significant future expense. It stays on the table forever. If prices drop, the offer stays the same because the bid is a function of what you paid, not what it’s ‘worth’ at the time of sale. If prices go up, sellers don’t do the deal so it doesn’t matter. This means that there is no upside for the dealer other than that it helps them sell in the first place. OF COURSE they are charging for this. Wouldn’t you? You’re just haggling over the price. That’s fine, and don’t buy it if you don’t want, but it’s part of the ‘value add’ of the dealer and it’s part of the bundle with the sale along with ‘free’ shipping, ‘free’ testing and paperwork, fancy showrooms, helpful salespeople and whatever else they are using to convince you to buy from them. None of this stuff is free and surely you know this.

 

[distracts]

Re: Are there certain diamond types that are easier to re-se

When WF brings in a virtual stone, they'll provide an actual picture of the stone as well as Idealscope and ASET images so that you can see the light return and (on rounds) arrows pattern for yourself. I believe most of the drop shippers won't do that.

Yep. Most of the drop shippers don't do that, and those that do either typically cost more or charge for it, from what I've seen. THAT is what you're paying extra for. If you are comfortable buying sight unseen, go right ahead. I wouldn't be, especially not with a princess, since imo princesses are the hardest to find decent examples of.

 

[HopeDream]

Re: Are there certain diamond types that are easier to re-se

Greakly, I think you've been given some fanstastic advice so far.

Keep in mind that Value and Price don't always match up.

For example, maybe you're uber wealthy and have purchased a gold and diamond back scratcher for $2 million. To you it's value is $2 million. For insurance purposes, maybe the appraisal value is $3 million. Anyhoo, you get sick of it and try to sell it used.

If you put it on Ebay, and no one bids on it, then it's worth $0, because you don't have a buyer.
If you go to a scrap dealer and they offer $1000, then it's worth $1000 because that's what you can actually sell it for. (Even though you value it at $2 million).

Bottom line - if there's no market, for your item, then it isn't worth anything, no matter what you originally paid.

Buy-back policies guarantee a market for your goods and a quick sale at a pre-determined price - they Guarantee your diamond won't stall as a $2500 special on craigslist or Idonowidon't, or be lowballed at a pawn shop. You don't have to use a buy-back policy - you can always try to sell it on your own first, but it's nice to have a back-up plan.

Used diamonds are like dirty diapers: no on wants to touch them because they've been used, and they're very hard to sell at full price.

If you want to be realisitic about the whole "quick cash" idea, tour your local pawn shops and ask them what they would pay the most for. Bring specs of diamonds you're thinking about buying (color , clarity, size, if it's certified etc.) and ask the pawn broker what they would shell out for your rock. That will give you an accurate value of what the diamond's worth on the quick-sale market.

Troll craigslist for a month and see what's listed, for how much, and how quickly it moves. That will give you a realistic idea of what resale values can be expected.

 

[Lula]

Re: Are there certain diamond types that are easier to re-se

Greakly, HopeDream has given you some great advice and some useful homework. If you haven't checked out the Craigslist jewelry listings in your local (larger) city, please do so. Selling a diamond is a b*itch. It's time-consuming, fraud/scams are an issue, and the majority of buyers will lowball you. On my local Craigslist, there is someone who has been trying to sell a Hearts on Fire Diamond (set in platinum) for nearly three years. He/she is asking way too much for it, and won't negotiate because he/she paid too much for it (the listing says "price is firm; don't lowball me"). Brands like Hearts on Fire sell for a significant premium -- much higher than the branded stones you mention (e.g.,WF, Good Old Gold; Infinity). I am an Infinity client who took advantage of the buyback option about a year-and-a-half ago. After considering all my options (selling locally, trading my diamond in for something else, selling to another vendor) I decided that the best option for me was to go with the no-hassle buyback option -- 80% in my case. I did not have to worry about shipping it (and risk it being lost or stolen) to a buyer, or risk being scammed, and, best of all, I didn't have to deal with the inevitable lowball offers. Well worth the 20% I "lost" on the transaction. Currently, I spend my "gem money" on colored gems -- certain types of untreated gemstones are rarer and less expensive than diamonds -- but someday I may decide that I want to own a diamond again. I will only buy from vendors that have 70% or higher buyback policies. As a consumer, I think there's a world of difference between vendors that sell for the lowest price possible but don't stand behind their product and vendors who do stand behind their product by offering extra services (e.g., IS and ASET images) and generous buyback and trade-up policies. You get what you pay for.

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

When WF brings in a virtual stone, they'll provide an actual picture of the stone as well as Idealscope and ASET images so that you can see the light return and (on rounds) arrows pattern for yourself. I believe most of the drop shippers won't do that.

Let me make sure I understand you correctly. Since the stone is in WF's "virtual" inventory they would have to request all pictures and images from the "original" seller. So, s/he should to be able/willing to do that. And all other drop shippers would not be able/willing to do that. Hence, WF charges extra $500 for such service. Am I correct?

What stops customers from buying the diamond from any of the cheaper vendors (after receiving pictures and images from the WF)? I mean, again, it's the same stone, isn't it?

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

I hope your original question has been answered.

Definitely. The most "sellable" diamond seems to be 1+ ct round, G-H, VS2+, GIA certified, XXX or AGS 0.

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

An anology here is a car sales person. It may be a poor example but- when you look at a particular brand, make, model of a car (say the prius as an example) and you go to different dealers- you know which dealer you will go back to deal with as they connect and speak with you. One may be talking specifics and that is your lingo and the other one just talks about the ride only and does not know the specifics too well, you will go back to the dealer that you connect with. One takes time to TALK to you, understand your situation and doesnt pressure you, while another is quite mechanical in his/ her dealing with you. I hope that makes sense?

It does, to some extend. I guess, most people's cur buying techniques are different. When I, for instance, want/need to buy a new car, I'd to a few different dealers to check out a few different makes and models. During the test drive I let the salesman to talk whatever s/he wants. It doesn't matter at that point. I can read the specs off the Internet and i can "feel" the car myself. I mean, the salesman might say something useful, but, for the most part, it would be just a sales pitch.

After I have chosen the make and model I would simply send an email to every dealer of that brand within, say, 50-100 miles radius from my home. In that email I would list the exact specs of the car I want (make, model, color, package) and ask for a quote. I would also make sure the dealer knows that at least a dozen of his colleagues are getting the same email. Since I usually buy cars brand new, with no financing and, most certainly, without any dealer add-ons (extra equipment, additional warranty and other BS) further comparison is very easy. Once I get the best quote, out of fairness I'd call the dealer where I did the test drive and ask him is if he matches it. If he does, he gets the sale. If not, I'd go to the dealer, which made the lowest quote. If he starts some monkey business, I'd go to the second lowest one (although, usually, the "original" dealer price matches the quote).

In such scenario I am not sure what kind of additional "value" the salesman provides me? I mean, the car is brand new, the warranty comes from the manufacturer, all the specs are online and the "feel" of the car I get myself during the test drive. It's now like he advises me which car I should choose. After a few test drives I have pretty good idea about that myself. So, all that salesman has to do is to show me where to put my signature and bring the car upfront. How much such services should be valued?

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

A buyback agreement from the dealer is a unilateral commitment to a significant future expense. It stays on the table forever. If prices drop, the offer stays the same because the bid is a function of what you paid, not what it’s ‘worth’ at the time of sale. If prices go up, sellers don’t do the deal so it doesn’t matter. This means that there is no upside for the dealer other than that it helps them sell in the first place. OF COURSE they are charging for this. Wouldn’t you?

Certainly. The promise to buy a commodity in the future for a set price is a risk, which could be managed with hedging. If you are familiar with financial markets I am sure you know how it works. However, hedging at 10-15% value of the commodity is VERY expensive. Normally it is just a few % tops. So, I assume the rest must be dealer's extra profit.

You’re just haggling over the price. That’s fine, and don’t buy it if you don’t want, but it’s part of the ‘value add’ of the dealer and it’s part of the bundle with the sale along with ‘free’ shipping, ‘free’ testing and paperwork, fancy showrooms, helpful salespeople and whatever else they are using to convince you to buy from them. None of this stuff is free and surely you know this.

Absolutely. However, the key word here is "bundle". Why should I pay for the services I do not use? I plan to buy the stone over the Internet. So, why should I care how fancy dealer's showroom is? Also, I do not plan to return the stone. So, why should I partially pay for those, who would do so? I mean, why not to make the shipping cheaper for everybody and let the "mind changers" pay for return postage themselves? Wouldn't it be fair? The same logic should apply to sales personnel. If someone buys the stone off dealer's website then there is no art of salesmanship involved (other that item description; but drop shippers do exactly the same thing). So, why not let those customers who want/need to be pampered pay for the "helpful salespeople" and stop spreading this cost between everybody?

To further illustrate my point I'd like to use the airline example. There are traditional carriers (like American, United, Delta) and the low cost ones (like Southwest, Ryanair and Easyjet (last two are European ones)). With the first bunch almost everything (fare, luggage, food, etc) is included in the price of the tickets. A "bundle", so to speak. But, with the second group of carriers, you pay for each service separately. So, customers have a choice of paying only for those things they actually need/use. Which is very fair. Afterall, why someone flying with only a briefcase and being not hungry should pay the same amount as the guy next to him with two large suitcases and a full diner.

Why diamond industry couldn't work the same way?

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

Used diamonds are like dirty diapers: no on wants to touch them because they've been used, and they're very hard to sell at full price.

How could I know whether some stone was used before or not? I mean, once taken out of the setting and cleaned it looks brand new. How do I know, that the diamond I'd buy from GOG or WF hasn't been sitting on someone's finger before?

 

[gregchang35]

Re: Are there certain diamond types that are easier to re-se

An anology here is a car sales person. It may be a poor example but- when you look at a particular brand, make, model of a car (say the prius as an example) and you go to different dealers- you know which dealer you will go back to deal with as they connect and speak with you. One may be talking specifics and that is your lingo and the other one just talks about the ride only and does not know the specifics too well, you will go back to the dealer that you connect with. One takes time to TALK to you, understand your situation and doesnt pressure you, while another is quite mechanical in his/ her dealing with you. I hope that makes sense?

It does, to some extend. I guess, most people's cur buying techniques are different. When I, for instance, want/need to buy a new car, I'd to a few different dealers to check out a few different makes and models. During the test drive I let the salesman to talk whatever s/he wants. It doesn't matter at that point. I can read the specs off the Internet and i can "feel" the car myself. I mean, the salesman might say something useful, but, for the most part, it would be just a sales pitch.

After I have chosen the make and model I would simply send an email to every dealer of that brand within, say, 50-100 miles radius from my home. In that email I would list the exact specs of the car I want (make, model, color, package) and ask for a quote. I would also make sure the dealer knows that at least a dozen of his colleagues are getting the same email. Since I usually buy cars brand new, with no financing and, most certainly, without any dealer add-ons (extra equipment, additional warranty and other BS) further comparison is very easy. Once I get the best quote, out of fairness I'd call the dealer where I did the test drive and ask him is if he matches it. If he does, he gets the sale. If not, I'd go to the dealer, which made the lowest quote. If he starts some monkey business, I'd go to the second lowest one (although, usually, the "original" dealer price matches the quote).

In such scenario I am not sure what kind of additional "value" the salesman provides me? I mean, the car is brand new, the warranty comes from the manufacturer, all the specs are online and the "feel" of the car I get myself during the test drive. It's now like he advises me which car I should choose. After a few test drives I have pretty good idea about that myself. So, all that salesman has to do is to show me where to put my signature and bring the car upfront. How much such services should be valued?

you make some good points here. everyone is out to get the BEST deal they can. some have the tenacity that you have and others dont. i think you have given a few ppl here some tips on buying cars...(there is another post on the hang out about car buying... i hope they read this as well)

it all about service and how these services are valued by you. if you don't value them, and it is very clear that these type of service does not mean a lot to you: then don't pay it. simple.

 

[gregchang35]

Re: Are there certain diamond types that are easier to re-se

A buyback agreement from the dealer is a unilateral commitment to a significant future expense. It stays on the table forever. If prices drop, the offer stays the same because the bid is a function of what you paid, not what it’s ‘worth’ at the time of sale. If prices go up, sellers don’t do the deal so it doesn’t matter. This means that there is no upside for the dealer other than that it helps them sell in the first place. OF COURSE they are charging for this. Wouldn’t you?

Certainly. The promise to buy a commodity in the future for a set price is a risk, which could be managed with hedging. If you are familiar with financial markets I am sure you know how it works. However, hedging at 10-15% value of the commodity is VERY expensive. Normally it is just a few % tops. So, I assume the rest must be dealer's extra profit.

You’re just haggling over the price. That’s fine, and don’t buy it if you don’t want, but it’s part of the ‘value add’ of the dealer and it’s part of the bundle with the sale along with ‘free’ shipping, ‘free’ testing and paperwork, fancy showrooms, helpful salespeople and whatever else they are using to convince you to buy from them. None of this stuff is free and surely you know this.

Absolutely. However, the key word here is "bundle". Why should I pay for the services I do not use? I plan to buy the stone over the Internet. So, why should I care how fancy dealer's showroom is? Also, I do not plan to return the stone. So, why should I partially pay for those, who would do so? I mean, why not to make the shipping cheaper for everybody and let the "mind changers" pay for return postage themselves? Wouldn't it be fair? The same logic should apply to sales personnel. If someone buys the stone off dealer's website then there is no art of salesmanship involved (other that item description; but drop shippers do exactly the same thing). So, why not let those customers who want/need to be pampered pay for the "helpful salespeople" and stop spreading this cost between everybody?

To further illustrate my point I'd like to use the airline example. There are traditional carriers (like American, United, Delta) and the low cost ones (like Southwest, Ryanair and Easyjet (last two are European ones)). With the first bunch almost everything (fare, luggage, food, etc) is included in the price of the tickets. A "bundle", so to speak. But, with the second group of carriers, you pay for each service separately. So, customers have a choice of paying only for those things they actually need/use. Which is very fair. Afterall, why someone flying with only a briefcase and being not hungry should pay the same amount as the guy next to him with two large suitcases and a full diner.

Why diamond industry couldn't work the same way?

i think you are onto something here.

 

[denverappraiser]

Re: Are there certain diamond types that are easier to re-se

OK, so it sounds like retaining resale value, the subject of the headline, is off the table as a relevant part of the decision. You’re just trying to use this as a metric to identify ‘value’. I absolutely agree that there’s no need to pay for benefits you don’t’ consider to be valuable if you can arrange to avoid them. The goal is to get a particular set of specs as cheaply as possible.

So what are the specs?

The gemological ones get hashed out thoroughly here so lets move on beyond that.
Do you need/want a showroom? No
Do you need/want a buyback policy? No
Do you need/want an inspection period?
Do you need/want to pay with a credit card? Is paypal acceptable?
Do you need/want a large selection so you can be picky about the gemological specs?
Do you need/want a US seller?
Do you care about the claimed history of the stone?
Any time pressure?
Are you willing to put in extra work on the hunt? A lot of extra work or just a little?
Are you willing to compromise on your gemological specs to get non-gemological ones like we’re discussiong?
Are you going to set it yourself?
Anything else?

Obviously the lowest price is going to be offered by a Craigslist seller in China or a burglar in a back alley who happens to have something for sale. Just wire your money or bring some cash, it’ll be fine. That comes with no ‘benefits’ and significant risk along with low prices. Is this acceptable? Why not? How about Craigslist US? How about Craigslist in your town?

 

[denverappraiser]

Re: Are there certain diamond types that are easier to re-se

Why diamond industry couldn't work the same way?

It does. Costco, Tiffany and Craigslist all coexist happily selling similar merchandise for very different prices. The difference is in the 'benefits'.

 

[denverappraiser]

Re: Are there certain diamond types that are easier to re-se

I have another comment on your airline example. You’ve identified the luggage and food as the cost triggered items on the airline when, in practice, they are rather small. The big costs are in labor (pilots, ground crews, maintenance, etc), equipment (cost of the plane), fuel, and taxes (landing fees et.al.). Food is a way of making customers feel like they’re getting a better service when they fly ‘first class’ or whatever when, in practice, it’s the same plane, the same pilot, the same destination etc.

Discount airlines use cheaper aircraft. Older, smaller planes.
Discount airlines pay their employees less (they’re non-union).
Discount airlines have smaller staffs. 2 man flight crews instead of 3 for example.
Discount airlines will cram more people onto the plane.
Discount airlines have less redundancy of staff and equipment so they have a greater chance of delays and cancellations.

Airlines also have an insanely complicated pricing model where the date you buy the ticket is TREMENDOUSLY important. This is much more important with the major airlines than the discounters. A ticket with 1 days notice will cost you 5 times the price of that same seat with a months notice. That’s because they can, not because the food will be better.

Another corollary is the cancellation policy. Tickets with no penalty tend to cost significantly more than those that apply a penalty if you need to change something. The foods the same, as is the pilot and the plane.

All of this may not matter to you. You’re trying to get from point A to point B. You’ll buy your ticket well in advance and you’ll rely on the regulators to prevent them from skimping too much on the maintenance and flight crews. You want cheap. You buy the penalty tickets and you agree to fly at unpopular times becasue the tickets are cheaper (even though the fuel, crew and equipment cost exactly the same). That’s the way I fly too, and I fly Southwest a lot more than I fly American, but the savings mostly isn't about the ‘free’ food.

 

[TC1987]

Re: Are there certain diamond types that are easier to re-se

When WF brings in a virtual stone, they'll provide an actual picture of the stone as well as Idealscope and ASET images so that you can see the light return and (on rounds) arrows pattern for yourself. I believe most of the drop shippers won't do that.

Let me make sure I understand you correctly. Since the stone is in WF's "virtual" inventory they would have to request all pictures and images from the "original" seller. So, s/he should to be able/willing to do that. And all other drop shippers would not be able/willing to do that. Hence, WF charges extra $500 for such service. Am I correct?

No. What has been said is Whiteflash has the stone shipped to their facilities, inspects it, takes measurements and photos, and then communicates with you. You may then buy it or not. They don't have it drop-shipped. Now, that costs WF money. WF has overhead costs, and they have specific costs for evaluating this particular stone. If they don't make the sale, their bills still have to be paid, and somehow the cost of the work they just did for you has to be paid. They have to spread the general overhead costs and unless they can bill customers for work done on call-in stones that are not bought, those costs probably get rolled into overhead. As the saying goes, there is no such thing as a free lunch. Also, the make (I believe that's the right word) of the virtual stones is often outside of whatever specifications the vendors set as criteria for what they stock in-house under their own brand name.

You really do seem to begrudge these vendors making a reasonable profit on their diamonds, much less being paid for their skill and knowledge in selecting them. But this isn't a flea market, Sir. It's e-commerce, and all of the vendors are in the business *to make money.* Do you work for peanuts? Are you offended if someone comes in and tries to haggle you down to working for $6/hr or otherwise below market rates?

If you want a mule-skinner's deal, then you really should be skulking the Craigslist ads and used jewelry sites, and pawn shops, and jewelers who buy gold and diamonds. But expecting merchants to give you flea market or street-vendor prices on top-grade diamonds is not reasonable, and it just will not happen. I am not even in the diamond business, and I am beginning to feel a little insulted by this conversation and the combativeness. If you don't want to buy, then don't buy.

What stops customers from buying the diamond from any of the cheaper vendors (after receiving pictures and images from the WF)? I mean, again, it's the same stone, isn't it?

It will be taken out of inventory or otherwise flagged unavailable when WF calls it in, or when any other dealer does.

 

[WinkHPD]

Re: Are there certain diamond types that are easier to re-se

To further illustrate my point I'd like to use the airline example. There are traditional carriers (like American, United, Delta) and the low cost ones (like Southwest, Ryanair and Easyjet (last two are European ones)). With the first bunch almost everything (fare, luggage, food, etc) is included in the price of the tickets. A "bundle", so to speak. But, with the second group of carriers, you pay for each service separately. So, customers have a choice of paying only for those things they actually need/use. Which is very fair. Afterall, why someone flying with only a briefcase and being not hungry should pay the same amount as the guy next to him with two large suitcases and a full diner.

Why diamond industry couldn't work the same way?

Just one minor comment. United and Delta actually charge you extra for the luggage, and Southwest makes advertisements about that it does not.

Wink

 

[Karl_K]

Re: Are there certain diamond types that are easier to re-se

Each vendor has their own business model.
Once you get outside that model they may decide not to compete with everyone in that area.
That is good business, put your efforts where they bring the most good to your company and fit your strengths.
A vendor buying one stone off virtual lists with a supplier that the one diamond may be the only one you buy that year is more expensive than buying 100 or 1000 a year from that supplier that a drop shipper may do.
Then you tie up your staff doing things that do not benefit your core business and serve the customers in your target market.

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

Just one minor comment. United and Delta actually charge you extra for the luggage, and Southwest makes advertisements about that it does not.

You are right. I used a bad example. In 2008 airline industry in the US made a strange twist. Struggling with record-high oil prices traditional carriers started to charge for checked luggage (and never removed that charge even after oil prices went back to normal levels). Southwest saw this as a chance to increase their market share and started a heavy "bags fly for free" advertising campaign. It worked and, in my opinion, the "big guys" lost more than they gained.

But, in fact, most traditional carriers in the US still do not charge for checked luggage. I mean, if you happen to have their co-branded credit card (which is easily available and doesn't cost anything), you bag flies for free. However, in Europe (as I am sure you aware of) you do not pay anything for your bag(s) with most traditional carriers but will pay the luggage checked with Ryanair and easyJet. No credit card would help you to avoid that charge. Same principle applies to large low-cost carriers in other parts of the world, like Air Asia, Air Arabia and etc.

So, in that sense, US happens to be an exception.

 

[YoungPapa]

Re: Are there certain diamond types that are easier to re-se

Hi Greakly,

I think most of the salient points have already been made in this thread, but I'll add my two cents.

From my experience, there are two kinds of buyers in the world: transactional and consultative. Transactional buyers do what they can to commoditize a product as much as possible and then purchase the item for the least amount of money. They usually don't feel the need for a salesperson or CSR to hold their hands and would much rather do their own research. These are the folks that are putting Best Buy out of business, shopping the stores and then buying the product from Amazon. I built my first company capturing these buyers and completely understand the perspective.

The second group of buyers don't generally look at things so cut and dry. They appreciate the services that the transactional buyer finds superfluous. They may have brand loyalty (or at least preference) and be willing to pay more for an item from one merchant vs another if nothing more than for the name on the box. They understand they are probably paying a little more than they have to, but find value in the extra care, services, policies, free luggage or whatever.

I don't believe there is a right or wrong here, but rather that the market is diverse enough to serve both. As you've probably figured out, Pricescope leans one direction and you seem to lean the other. Not a problem - just differences in style.

On a practical note, while you might not care about many of the services offered by diamond vendors, there are a few things that I strongly encourage you to *not* sacrifice. You need a good return policy, should avoid drop-shipping (I've done it and it's bad news - diamonds come in from suppliers chipped/don't match the cert, etc), stick to GIA/AGS, and if possible, buy your diamond and engagement ring from the same place.

Hope this helps.

 

[HopeDream]

Re: Are there certain diamond types that are easier to re-se

Used diamonds are like dirty diapers: no on wants to touch them because they've been used, and they're very hard to sell at full price.

How could I know whether some stone was used before or not? I mean, once taken out of the setting and cleaned it looks brand new. How do I know, that the diamond I'd buy from GOG or WF hasn't been sitting on someone's finger before?

You don't know your diamond wasn't used before (in fact it probably has), but if it comes from a jewellery store instead of a private sale it's "new". All a vendor needs to do to make a diamonds "new" is polish out any scratches and send it off to GIA for a fresh grading date and new papers.

The point is that you as a private seller can't make a diamond "new" because you're not a store.

Some companies can give you a picture of the rough your diamond was cut from, if it was cut recently (I think Crafted by Infinity may do this), but many of us are walking around with stones on our hands that have spent over 100 years as cut diamonds and have seen several owners.

Depending on the era and diamond prices, recutting old stones to modern standards can/has been cheaper than mining new rough.

I hope you find the perfect stone at the prefect price!

 

[distracts]

Re: Are there certain diamond types that are easier to re-se

Obviously the lowest price is going to be offered by a Craigslist seller in China or a burglar in a back alley who happens to have something for sale.

I checked my alley but there were no burglars wanting to sell me diamonds at dirt-cheap prices.

 

[bunnycat]

Re: Are there certain diamond types that are easier to re-se

An anology here is a car sales person. It may be a poor example but- when you look at a particular brand, make, model of a car (say the prius as an example) and you go to different dealers- you know which dealer you will go back to deal with as they connect and speak with you. One may be talking specifics and that is your lingo and the other one just talks about the ride only and does not know the specifics too well, you will go back to the dealer that you connect with. One takes time to TALK to you, understand your situation and doesnt pressure you, while another is quite mechanical in his/ her dealing with you. I hope that makes sense?

It does, to some extend. I guess, most people's cur buying techniques are different. When I, for instance, want/need to buy a new car, I'd to a few different dealers to check out a few different makes and models. During the test drive I let the salesman to talk whatever s/he wants. It doesn't matter at that point. I can read the specs off the Internet and i can "feel" the car myself. I mean, the salesman might say something useful, but, for the most part, it would be just a sales pitch.

After I have chosen the make and model I would simply send an email to every dealer of that brand within, say, 50-100 miles radius from my home. In that email I would list the exact specs of the car I want (make, model, color, package) and ask for a quote. I would also make sure the dealer knows that at least a dozen of his colleagues are getting the same email. Since I usually buy cars brand new, with no financing and, most certainly, without any dealer add-ons (extra equipment, additional warranty and other BS) further comparison is very easy. Once I get the best quote, out of fairness I'd call the dealer where I did the test drive and ask him is if he matches it. If he does, he gets the sale. If not, I'd go to the dealer, which made the lowest quote. If he starts some monkey business, I'd go to the second lowest one (although, usually, the "original" dealer price matches the quote).

In such scenario I am not sure what kind of additional "value" the salesman provides me? I mean, the car is brand new, the warranty comes from the manufacturer, all the specs are online and the "feel" of the car I get myself during the test drive. It's now like he advises me which car I should choose. After a few test drives I have pretty good idea about that myself. So, all that salesman has to do is to show me where to put my signature and bring the car upfront. How much such services should be valued?

you make some good points here. everyone is out to get the BEST deal they can. some have the tenacity that you have and others dont. i think you have given a few ppl here some tips on buying cars...(there is another post on the hang out about car buying... i hope they read this as well)

it all about service and how these services are valued by you. if you don't value them, and it is very clear that these type of service does not mean a lot to you: then don't pay it. simple.

I did, thank you, and it's somewhat similar to the "car buying handbook" I got from a friend. I'm not sure if it will be overly useful this go around, as I'm fairly certain we're going to buy the car we are a little obsessed by instead of the car we know we "should" buy, and there's only one dealer in town that sell this car....I'd love to ask OP some questions about what one would do in that case maybe over in the hangout or something if he has any pointers.

FWIW- I don't really feel like car buying and diamond buying are similar, unless you are talking about all the virtual stones out there which could be anywhere from horrible to mediocre to nice cut that you certainly could haggle for and convince people to price match. But once you talk fancies, where you NEED a lot more info about them to buy them than just a few specs and if you want a nice one and don't have the personal experience to filter through them on your own (ie- not a GG) you would probably be wiser to pony up a little extra to be sure you don't get a dud, or branded cuts that only a particular place carries, then I just don't feel like you're in the same ball park anymore.

Or maybe it is, since that's kind of the situation I'm finding myself in. A car I like that only one place in town carries and so I'm probably going to pay more than if everyone carried it....

 

[GREAKLY]

Re: Are there certain diamond types that are easier to re-se

OK, so it sounds like retaining resale value, the subject of the headline, is off the table as a relevant part of the decision.

You're absolutely right. If possible, could some of the moderators make a new topic (called, say "How to buy a diamond as cheaply as possible") out of the second page of this discussion.