buying diamonds online - pros and cons

[puddy]

So it seems that online diamonds are cheaper and easier to get specs on.

A huge con that I see is that you probably can''t "trade up" like you can at popular B&M stores. Is this true? If so, do you see this as much of a con as I do?

 

[belle]

you aren''t looking at some of the most popular and well respected vendors here then. all have trade up policies.

 

[puddy]

they do? which vendors have these policies?
Would i just buy the diamond through the vendor and get it set somewhere else?

 

[belle]

you can search the various vendors https://www.pricescope.com/dealers.asp and read their policies.
i know that whiteflash has a 100% lifetime trade up policy.

 

[puddy]

hmm, so is it a lot better deal? did you get yours through whiteflash?

 

[belle]

for me, it was absolutely a better deal. i have purchased from wf and couldn''t be happier.

 

[esguy27]

I purchased my fiance''s diamond from Whiteflash and couldn''t be happier. The entire process was great and as mentioned already, they have a lifetime trade up policy. They also have a risk free 10 day return policy which enables you to buy a stone and return it for a full refund if you don''t like it for some reason.

They also have referal programs that benefit the new customer as well as the person doing the referring.

I highly recommend them.

 

[in-situ]

Belle is right - many online traders do have trade-up policies. One point to consider however is that these policies seem to only apply to diamonds purchased through the original vendor. This is good for the vendors as it is oviously used as a tool to cement repeat business, although not necessarily good for the consumer. Consider what would happen if your chosen vendor, complete with trade-up policy, was to have large increases in the prices of their diamonds shortly before you wanted to trade up. OK so it might not happen, but you never know..

 

[esguy27]

In-situ, couldn''t that happen with any vendor? That scenario certainly isn''t limited to online vendors.

 

[belle]

Date: 6/16/2006 1:36:21 PM
Author: in-situ
Belle is right - many online traders do have trade-up policies. One point to consider however is that these policies seem to only apply to diamonds purchased through the original vendor. This is good for the vendors as it is oviously used as a tool to cement repeat business, although not necessarily good for the consumer. Consider what would happen if your chosen vendor, complete with trade-up policy, was to have large increases in the prices of their diamonds shortly before you wanted to trade up. OK so it might not happen, but you never know..

what other policy could you have? 100% purchase price on any diamond from anywhere?

i''m just confused as to the purpose of this statement.

also, i do not for one minute believe that a reputable internet vendor would suddenly increase their prices alone in a way that was disproportionate to the market.

 

[denverappraiser]

Date: 6/16/2006 1:36:21 PM
Author: in-situ
Belle is right - many online traders do have trade-up policies. One point to consider however is that these policies seem to only apply to diamonds purchased through the original vendor. This is good for the vendors as it is oviously used as a tool to cement repeat business, although not necessarily good for the consumer. Consider what would happen if your chosen vendor, complete with trade-up policy, was to have large increases in the prices of their diamonds shortly before you wanted to trade up. OK so it might not happen, but you never know..

I certainly agree that tradeup policies are designed to benefit the dealer at least as much as the consumer but there''s nothing unique about the online traders in this regard, nor is there anything unreasonable about this. Have you found a storefront type jeweler, or anyone else for that matter, that will accept returns or will allow an unrestricted tradeup on purchases that weren''t made with them in the first place?

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[in-situ]

Belle, as far as I understand, the purpose of a forum is to provide opinion and debate on a given topic. I simply gave my opinion - if we all shared the same the world would be a very bland and boring place. No?

Either way, I do not see a justifiable reason as to why a diamond vendor (online or B&M) could not offer a trade up policy on stones previously purchased from another vendor. At any time, any diamond vendor will be aware of the fair market price for any given stone. A trade up could easily be agreed between vendor and consumer based upon this.

Also, I intentionally did not propose any given trade up value / percentage so I am also confused

as to why you felt the need to go into specifics - I was pondering the issue as a whole, not going into who gives what.

Purchasing a diamond usually involves a high US$ spend and the point that I was trying to make was that consumers need to take care and be aware of the fact that they may effectively be "committing" themselves to a specific vendor and that this is a point that needs careful consideration. The vendor that a consumer is "tied" to may not even be able to offer the consumer the diamond that they want when they want it thereby effectively rendering the trade up policy worthless. This is a possibility that does need to be considered by the consumer.

DenverAppraiser, my hat off to you for being a realist, honest with your answer and the voice of reason, although I do not believe that my post stated that the practice of vendors only trading up their own stones was unreasonable - all businesses need to make money and to do everything they can to help themselves. I was simply trying to bring the issue of trade ups under the spotlight and to give people the opportunity to discuss it further.

I think that returns are an entirely different kettle of fish and that here is not the right place to discuss that particular issue. Additionally, I did not suggest an unrestricted trade up (trade ups will realistically always be restricted in some way, shape or form), just a different way of looking at things. You must have bought product X from me in order to trade it against product Y is to me probably the largest restriction that could be placed on a trade up. A jeweler that did do trade ups on other vendors diamonds could I think potentially do very well out of it. Sadly I have not yet come across anybody so far that accepts diamonds originally purchased from another vendor as a trade up, but who knows what the future may bring? It only needs one person to go out on that limb.

 

[Mara]

Either way, I do not see a justifiable reason as to why a diamond vendor (online or B&M) could not offer a trade up policy on stones previously purchased from another vendor. At any time, any diamond vendor will be aware of the fair market price for any given stone. A trade up could easily be agreed between vendor and consumer based upon this.

___________________

Justifiable reason...hmmm....could it be that maybe they don't WANT to have to sell another vendor's stones? If they offer a trade-up on just anyone's stones, then they have to turn around and sell them. What if the stone sucks? What if it's not of the same cut quality they typically sell?

Also, there ARE vendors who will take a stone bought elsewhere on consignment to sell for you, OR they sometimes will try to find a buyer in their wholesale market for the stone. Either way you still will lose some money...but at least it's an option. There are always options, people just have to search them out. But it's not a blanket policy for everyone and their stones.

Oh and yes I agree that when customers are spending their $$ they should be aware of the policies, what is there, what is covered, what isn't and think about the future too.

 

[belle]

Date: 6/16/2006 3:43:44 PM
Author: in-situ

Belle, as far as I understand, the purpose of a forum is to provide opinion and debate on a given topic. I simply gave my opinion - if we all shared the same the world would be a very bland and boring place. No?

agreed.

the original poster was asking about the pros and cons of buying online and stated that a ''con'' would be the internet vendors lack of trade up policies. i pointed out that there are highly regarded vendors that DO have trade up policies. i am just not sure what your reason was for pointing out that internet vendors don''t offer trade ups from other vendors because the very same situation could apply to traditional jewlers. you seemed to be saying this is not the case and i was simply trying to understand your point in mentioning it.

 

[in-situ]

Belle, I hope that my second post got my intended point across more clearly than the original one as I made sure to include mention of both online & B&M.

 

[in-situ]

Mara, I do understand that there will naturally be vendors that do not WANT to sell another vendor''s stones & that there are vendors who specialize in a certain type or quality of diamond. I do however refuse to believe that said vendors could not sell (at a profit), the traded up stones if they WANTED to. Surely good business sense dictates that said vendors would have additional sales channels that they could use to move the unwanted stones without needing to put them into their offered inventory anyway?

Not every vendor will WANT to offer a trade up policy, just as not every vendor will WANT to trade up on another vendors stones. Because they don''t WANT to is I suppose a justifiable argument, but very much the easy answer and one that does not really require any thought. It also reinforces my previous thoughts regarding how trade up policies are a way of "tying in" a consumer to what could effectively be a worthless policy for them when it came to it.

Is there any justifiable reason as to why a diamond vendor (online or B&M) could not offer a trade up policy that included stones purchased from another vendor if they WANTED to?

 

[jasontb]

Date: 6/16/2006 5:52:02 PM
Author: in-situ

Is there any justifiable reason as to why a diamond vendor (online or B&M) could not offer a trade up policy that included stones purchased from another vendor if they WANTED to?

That is one of the strangest questions I have ever heard. I think I can top it, though:

Is there any justifiable reason as to why a diamond vendor (online or B&M) could not GIVE AWAY THOUSAND DOLLAR BILLS if they WANTED to?

 

[Mara]

LOL Jason. i surely wouldn't mind a thousand dollar bill here or there. haha.

in-situ, well of couse vendors can do whatever they WANT to, and often do.

so what's the question again? i just said that some vendors DO take consignment or trade-ins at 'wholesale' or similar...so you want everyone to do it? big question mark here.

i would imagine that those who WANT to, actually do..and everyone else doesnt want to or doesn't want to deal with it.

 

[denverappraiser]

In-situ,

This is actually a pretty good question and it’s a shame to see it buried under a question about online shopping.

Taking a trade-in on someone else’s goods is identical to buying it for inventory and there are plenty of dealers that will be happy to do this, as long as they get to set the price. What customers usually mean by the term ‘trade in’ is that they want to sell their item to a dealer for a credit towards something else and the value of that credit will be based on either what they paid or what they think it’s worth. Customers regularly have a profoundly inflated opinion of value, thinking diamonds are some sort of bank account, and are terribly offended when a dealer offers them less than what they expected. This is the root of a serious marketing problem for jewelers and most B&M stores don’t buy from the general public for this reason. If a customer offers them a stone, they quote a price that they’re willing to pay and the customer storms out the door mad, the store has both failed to make a purchase and lost a future customer in the attempt. Most find it’s just not worth the risk for the potential gain.

There’s also a problem in defining the various grades. People buy over-graded stone all the time and a dealer would be terribly ill advised to buy stock based on an inflated grading claim made by one of their competitors. Even stones with grading reports from top tier labs can have issues of mismatching, stale reports, grading accuracy, cutting concerns, damage and other problems that the customer may be unaware of or might be flat out concealing.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[Gypsy]

Denver... just curious... what % of a ''replacement value'' appraisal would a good store typically offer a person interested in selling their diamond back? 50%? 75%

Is consignment a better way to go?

 

[strmrdr]

If its a top line h&a diamond some of the vendors will take it in trade for close to wholesale cost minus expenses such as a new cert even if they didnt sell it.
For less well cut stones some will try to sell them on consignment.

No vendor is going to advertise that they take in trade goods from other vendors because they will only do so on goods they can turn around and sell.

A badly cut stone to a PS vendor would have to be re-cut or wholesaled both of which lose a lot of value so they can only offer a small fraction of wholesale price on them which generates hard feelings so its better to have a default policy of not doing it at all.

The bottom line is both at b&m's and the net that you will usualy get a better deal from the vendor you bought it from and some like goodoldgold, whiteflash and others even put it in writing.


edit: or what Neil said far better than I did :}

 

[strmrdr]

Date: 6/16/2006 6:30:22 PM
Author: Gypsy
Denver... just curious... what % of a ''replacement value'' appraisal would a good store typically offer a person interested in selling their diamond back? 50%? 75%


Is consignment a better way to go?

Typical would be 50%-75% of wholesale.
Best one can expect without other agreements is wholesale minus expenses.

 

[denverappraiser]

Gypsy,

‘Replacement Value’ is a badly abused concept and it’s almost useless in most situations. In theory it’s the appropriate budget for an insurance company to replace an item with a new one like it in case of a loss. In practice, it’s usually someone’s fantasy about what a great bargain they got. Converting from fantasy to reality sight unseen is not an easy thing since some fantasies are considerably more outlandish than others.

Consignment sales can be good if you get the right store. The reason is simple. The store doesn’t have to tie up their money in order to get the inventory so they can live with a smaller margin and you get a higher price. The tradeoff is twofold. #1, the jeweler is likely to be more motivated to sell his own goods precisely because they get a better margin and #2 you need to care what is going on. By that I mean that you need to pay attention to whether it’s been sold, whether the jeweler remains in business, whether they are paying their bills etc.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[in-situ]

Jason, thank you for not contributing anything of any worth to the thread.

Mara, I was thinking more along the lines of a variation on the trade ups offered by many. I was not really considering wholesale trades, perhaps more of a % of retail. This could be a USP for someone, who knows? I was not suggesting or saying that I want anyone to do anything, I was just using this forum to debate a topic.

To me it still seems that the main reason trade ups are offered is to cement and tie in a customer to coming back to the original vendor for the trade up. Naturally, everybody needs to do what they can to maximize their business opportnities, I was just trying to get some more info on the real reasons behind why vendors were not prepared to trade up on other vendors stones.

My opinion has not been changed - it still seems to me that the real reason is to tie in customers.

Thank you to everyone (except Jason) for your input.

 

[in-situ]

I think my PC may have had a hiccup! When I posted my previous message I had only seen the messages as far as Mara''s LOL, so that posting may appear a little out of sync.

DenverAppraiser, your reasoning makes perfect sense and and is truly justifiable. Thank you for providing another well-thought out and informative post.

 

[RockDoc]

Date: 6/16/2006 6:45:56 PM
Author: denverappraiser

Gypsy,

‘Replacement Value’ is a badly abused concept and it’s almost useless in most situations. In theory it’s the appropriate budget for an insurance company to replace an item with a new one like it in case of a loss. In practice, it’s usually someone’s fantasy about what a great bargain they got. Converting from fantasy to reality sight unseen is not an easy thing since some fantasies are considerably more outlandish than others.

Consignment sales can be good if you get the right store. The reason is simple. The store doesn’t have to tie up their money in order to get the inventory so they can live with a smaller margin and you get a higher price. The tradeoff is twofold. #1, the jeweler is likely to be more motivated to sell his own goods precisely because they get a better margin and #2 you need to care what is going on. By that I mean that you need to pay attention to whether it’s been sold, whether the jeweler remains in business, whether they are paying their bills etc.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

Neil is very right..... replacement value is sort of nebulous in it''s meaning. Replacement COST would probably be more "proper" for many types of valuation.


As far as consignment - Neil is again very correct, but I''d add to this if you think you want to consign something to a store I would have the store sign a UCC-1 form which is available from your state''s Secretary of State. That would be step one. Step two is to file the UCC-1 with the Secretary of States office. THIS IS NOT A REQUIREMENT, BUT CERTAINLY A GOOD SUGGESTION TO PROVIDE EXTRA ASSURANCE ABOUT YOUR ITEM.

The UCC-1 form puts on "legal notice" that the item described is YOURS. This would exempt your property while in the custody of the jewelry from being seized by an taxing authority, or bank, or some other creditor. Details of how this actually may work and procedure for return of your property if for some unknown future reason that is was seized by someone would vary - but you''d have a lot more "punch" to get it back than a signed consignment agreement. Also if the item would be sold, and delivered and your weren''t paid, it would provide good recourse in replevin ( taking back your property)


Rockdoc.

 

[msdarlinjoy]

Hi Puddy ~

Welcome to PS!!!

In answer to your question ...

My hubby & I bought my diamond from Jonathan @ GoodOldGold.com ... Yes, online!

Hubby would have loved to been able to buy me a minimum of a carat, however, it just wasn''t going to happen anytime soon, so we did some research and went with a respected vendor who would in the future do a "trade in - trade up". I will be getting a beautiful .72 J SI1 soon.

I also liked that fact that I could be so picky about my stone, asking for certain reports like a sarin, ideal scope, brillance scope pics, helium reports, microscopic pics of the actual diamond at huge magnifications, etc... I could not get that kind of specific info from any jeweler where I live. On-line meant a better cut diamond ... and a better price! Customer service ... Priceless!

There is ton''s of researchable information here on PS

, use the search bar and you can spend days learning so much. Again, welcome and good luck with your search!

Have a wonderful weekend!

 

[denverappraiser]

Jewelers, both online and off, offer trade in programs this for three primary reasons:

#1 It increases customer loyalty.
#2 It gives them something to justify higher prices when they are being compared to other dealers who don’t offer this.
#3 It reduces customer resistance to the purchase and builds confidence in the jeweler thereby increasing sales.

These are all fine reasons. Customers like them because:

#1 The resale value of jewelry for consumers is generally considerably less than the purchase price. These programs allow customers the opportunity to ‘resell’ them at a pre-arranged price that is generally higher than their other alternatives.
#2 Selling diamonds is a pain in the rear and it’s easy to take it back to the store and just trade it in.
#3 It’s a vote of confidence by the jeweler in their own merchandise.
#4 It maintains the illusion that jewelry is an 'investment'.

These lists are not incompatible, but neither are they identical and it’s NOT a free service. Good jewelers have accountants, and good accounts will make sure the jeweler understands this. This is what’s known as a ‘contingent liability’ an accounting lingo and the more generous the program, the bigger that liability is. They need to offset this somewhere. It can be higher original prices, it can be in the requirement that you must use their repair department, it can be the requirement that you listen to their salespeople every 6 months during the ‘inspection’ in the hopes that you’ll buy something else, it may be something else entirely but you can bet it’s in there somewhere. Whether you’re willing to pay the price is a matter of figuring out what the price is and deciding whether or not you find the program valuable. Not everyone wants the same things out of a deal.
Neil Beaty
GG(IGA) ISA NAJA
Professional Appraisals in Denver

 

[diamondseeker2006]

The pros I see are:

1) a greater quantity of high quality stones to choose from at a better price

2) definitely more information on the stones from some of these vendors than ANY regular jeweler I have ever visited

3) vendors like Good Old Gold, Dimend Scaasi, and Winfields are established brick and mortar jewelry stores that are unliklely to go out of business anytime soon, and if you desire, you can go there and view diamonds and other jewelry easily

4) some like Good Old Gold offer a 30 day return policy for diamonds, and they also offer lifetime trade-up and 75% buy-back for hearts and arrows stones (can''t get much better than that!)

Cons:

1) difficulty seeing multiple stones at one time to compare (but I have ordered and returned stones in order to see them, and the vendors were very nice!)

My decision is that I am never likely to buy another diamond from a source other than the PS vendors .

 

[Lorelei]

Date: 6/17/2006 11:27:45 AM
Author: diamondseeker2006
The pros I see are:


My decision is that I am never likely to buy another diamond from a source other than the PS vendors .

Ditto! Not that I am ever likely to be a diamondseeker myself again any time in the future