Does low clarity badly affect trade-in and resale value?

[sledge]

2) based on what I see in the market, assuming 70 cents on the retail dollar will lead to a lot of disappointment.

Totally agree! I think my initial assessment of 50 cents on the dollar is more realistic. I altered to 70 cents based on others comments above. Obviously not every situation is identical but 50 cents seems more reasonable based on my very limited experience in the second hand jewelry market. But I guess if someone finds the right buyer, or is willing to wait and be patient for the right deal then it can be a better deal. On the flip side, fire sales will likely create less than 50 cent on the dollar returns.

I am amazed that @Miki Moto got 163% return! And I sure hope you jumped on that deal!!

My own thoughts are a few factors were at play here. Even with inflated name brand retail pricing she managed to buy in a low market, and sell in a high market. The specs matched perfectly for the buyers. But probably what had the most effect was the fact it was a 3+ carat stone. While substantially fewer people are buying that size of stone, it appears the supply of 3+ carat stones were abnormally low and the demand was high. As a result it pushed prices up at a much higher & faster rate than her earrings of roughly 1 carat weight each.

I do not think a 163% return is normal on jewelry. Not without substantial amounts of time and/or factors similar to those pointed out above. This strongly correlates with the fact her earrings only brought about 53% of their initial value (or a 47% loss, depending how you view it).

 

[Blingalingaling]

Do we know what the mark-up on diamonds is? If we paid, for example, at "retail", $50K for a stone, was the wholesale price $25K (50%)? I'm not a tradesperson, so I don't know and I'm assuming that most buyers don't know what the wholesale price of stones actually are. I'm not talking about how much profit a jeweler is making on a stone, I'm talking about what the stone would cost the jeweler to buy it from the cutter and then add his mark-up before he sells it to us.
If there's a 50% mark-up, let's say, then recouping 50% of retail upon trading is you and me being compensated the wholesale price for the stone. So, now the reseller (the jeweler) will add another 50% and sell it again. That's what jewelers mean by "It has to make sense" for them when they take in a trade. Otherwise, they make more of a profit if they buy a completely different stone from a cutter and starting fresh, instead of buying your stone back from us.
Of course, 50% might not be the correct percentage-it could be more or a lot less, but hypothetically, I think this is the formula they're using, if I'm not totally wrong - in which case, I'm just a wanna-be Jewelry Maven! LOL!

 

[Rockdiamond]

The SA was very upfront and said “you will get more for your ring if you try and sell it yourself vs. a trade in as I am sure your ring has appreciated.”

We're all waiting for the details- but this part does stick out.
Tiffany is able to charge prices that are among the highest in the industry. They do offer a lot in the way of exclusivity, etc- so people are willing to pay it.
This extends to resale. It's easier to sell a signed piece- especially if one has all the paperwork and little blue box.
Easier to sell- but at a far lower price than a person would pay in Tiffany's.
Common sense dictates that unless someone bought a piece from Tiffany a very long time ago, they are not going to be able to get a higher price that Tiffany's themselves.

 

[Rockdiamond]

Do we know what the mark-up on diamonds is? If we paid, for example, at "retail", $50K for a stone, was the wholesale price $25K (50%)?

For many years, jewelers were able to double their investment when they sold a diamond. That's loooong gone.
Margins today are far smaller - which makes buyers far less willing to pay anywhere near wholesale when consumers are looking to sell for cash.
Without a doubt, a trade in puts a consumer in a far stronger position than if they try to sell for cash.

 

[Miki Moto]

The problem with an E/SI2 is that the SI2 will put off the people who want a perfectly clear stone, and that the E will put off the bargain hunters who want the cheapest eye clean/no tint stone.

@ChristineRose You are spot on and this circles back to the original post. This is exactly why there is little demand for high color low clarity stones. As you said, the quality conscious who prefer E color will not purchase a SI and the bargain hunters who want SI pricing will not choose an E (by the way... the details...my HOF AGS started out as F/SI2, both stones, then after reading a thread on different ratings from AGS and GIA, I got curious on GIA rating, sent my stones in and they came back as E SI1/SI2).

A few other comments to wrap this up since I think @icy_jade has left this thread.

Trade-in is not the same as re-selling. I got pricing for both as I was curious on this whole "sell your diamond" model especially when the SA told me I should try and sell it myself:
Tiffany and HOF will give you 100% of purchase price as part of a trade-in.
I purchased my HOF in 2003, and 15 years later, the resell price is 53%.
I purchased my Tiffany in 2004, and 14 years later, not only do I break even, I profit.

I did not sell my e-ring because I have not yet decided on the upgrade ring yet (that's another story). It's interesting how these two tests turned out. On the Tiffany, I thought for sure I would get very little in resale as I know Tiffany has a very high mark up so I was not even considering selling it. I only got an estimate when the SA made that comment to me so I got curious. On the HOF, I thought for sure I would at least break even with the earrings and since I do not like my HOF, even before this revelation, I was thinking I might sell it. It is has been 15 years! Yes. I paid a premium for HOF, but certainly no more than the killer premium I paid for Tiffany.

So back to the original point of the post... no, for me, I would not by high color low clarity stones based on this experience.

I must admit... jewelry purchasing was much more simpler for me prior to finding PS. I am now more educated thanks to all of you good people here sharing on PS, but there is still a lot of info on diamonds out there that I have not begun to learn. I hope some of you found my experience helpful.

 

[icy_jade]

@Miki Moto hihi I’m still here! I was distracted as I was looking at the diamond video and inclusion plot (G SI2 from CBI/HPD as @SimoneDi mentioned) a bazillion times and reading up on twinning wisps etc. Plus I didn’t know anything so can’t contribute to the discussion. Was actually up really late reading on PS ytd and popped by this thread many times.

As usual I’m always thankful to all the PS-ers like you who are so generous in sharing your knowledge and experience. This has helped me move towards making up my mind. (I’m still not 100% sure but I feel like there’s some progress... )

 

[Miki Moto]

@icy_jade Hi! Yes... surfing PS and looking at diamonds can be tiring and time consuming! I am sure you will find what you are looking for and @SimoneDi is always super knowledgeable. Good luck to you!

 

[sledge]

Hey @icy_jade, I went back and found your thread and looked at the actual stone you are thinking about buying. It's a 2.05 G SI2. Great stone that is eye clean to boot. Also, you indicated you were located outside the US so trades/upgrades could be tricky.

Here are some additional thoughts:

• Assuming there is a small (undesirable) market for an E SI2 stone, I believe you will have a different experience. Many value shoppers are looking at stones in the G/H/I range especially in this 2ct size. In fact I think many struggle to find an eye clean SI1, so they tend to be more H/I buyers due to budget constraints. As such, I think an eye clean G/SI2 would do very well in today's market.
• I am not sure where outside the US you are located, but if you located in an Asian culture, and look to sell or trade locally then you will probably have issues. A strong emphasis is placed on both color & clarity.
• Trying to predict future financial markets is rough. Also, the supply/demand of product and buyers preferences can shift as well. For instance, we are seeing a shift in millenial buyers where they don't care about some of the qualities of previous generations. This isn't to say there will be no market for your stone should the mainstream change, but a reasonable assumption would be that it will not necessarily be the same as now.
• Many times when we need or want to sell something, markets tend to work against us and our goals. At least that has been my experience.
• I kind of feel your long-term vision (that has factors you can't accurately predict) is clouting your short-term decision making. I struggle with this with larger monetary investments (stocks, homes, etc) as I tend to look long-term vs short-term. In reality, buying a stone that meets your budget and "pretty" criteria (super ideal, color, eye clean, etc) is what matters today. Those are all factors within your control. I wouldn't increase my budget to buy a G VS1 based on what may or may not happen in the future.
• Things you could consider to future proof your next purchase or upgrade, would be to ask Wink what his succession plans are for when he retires (as you indicated, the guarantee is only as long as the vendor is there and no negativity is implied or meant here). Rather than deal with the hassle of trade/upgrade overseas, you could get a plane ticket to the US and do the swap in-person and wear the new stone back home. That plane ticket is much cheaper than jumping from an SI2 to a VS1 for instance.
• Unless you need to sell for distress reasons, you will have time to plan and maneuver around the best option for you when & if that time ever comes.

 

[yssie]

Hey @icy_jade, I went back and found your thread and looked at the actual stone you are thinking about buying. It's a 2.05 G SI2. Great stone that is eye clean to boot. Also, you indicated you were located outside the US so trades/upgrades could be tricky.

Here are some additional thoughts:

• Assuming there is a small (undesirable) market for an E SI2 stone, I believe you will have a different experience. Many value shoppers are looking at stones in the G/H/I range especially in this 2ct size. In fact I think many struggle to find an eye clean SI1, so they tend to be more H/I buyers due to budget constraints. As such, I think an eye clean G/SI2 would do very well in today's market.
• I am not sure where outside the US you are located, but if you located in an Asian culture, and look to sell or trade locally then you will probably have issues. A strong emphasis is placed on both color & clarity.
• Trying to predict future financial markets is rough. Also, the supply/demand of product and buyers preferences can shift as well. For instance, we are seeing a shift in millenial buyers where they don't care about some of the qualities of previous generations. This isn't to say there will be no market for your stone should the mainstream change, but a reasonable assumption would be that it will not necessarily be the same as now.
• Many times when we need or want to sell something, markets tend to work against us and our goals. At least that has been my experience.
• I kind of feel your long-term vision (that has factors you can't accurately predict) is clouting your short-term decision making. I struggle with this with larger monetary investments (stocks, homes, etc) as I tend to look long-term vs short-term. In reality, buying a stone that meets your budget and "pretty" criteria (super ideal, color, eye clean, etc) is what matters today. Those are all factors within your control. I wouldn't increase my budget to buy a G VS1 based on what may or may not happen in the future.
• Things you could consider to future proof your next purchase or upgrade, would be to ask Wink what his succession plans are for when he retires (as you indicated, the guarantee is only as long as the vendor is there and no negativity is implied or meant here). Rather than deal with the hassle of trade/upgrade overseas, you could get a plane ticket to the US and do the swap in-person and wear the new stone back home. That plane ticket is much cheaper than jumping from an SI2 to a VS1 for instance.
• Unless you need to sell for distress reasons, you will have time to plan and maneuver around the best option for you when & if that time ever comes.

This is an excellent summary.

I am rather the opposite when it comes to jewellery - I tend to prioritize “make me happy today” at the expense of “consequences tomorrow”, and I’ve learnt some expensive lessons over the years. Your way seems far better, over-analysis pains and all

 

[icy_jade]

Hey @icy_jade, I went back and found your thread and looked at the actual stone you are thinking about buying. It's a 2.05 G SI2. Great stone that is eye clean to boot. Also, you indicated you were located outside the US so trades/upgrades could be tricky.

Here are some additional thoughts:

• Assuming there is a small (undesirable) market for an E SI2 stone, I believe you will have a different experience. Many value shoppers are looking at stones in the G/H/I range especially in this 2ct size. In fact I think many struggle to find an eye clean SI1, so they tend to be more H/I buyers due to budget constraints. As such, I think an eye clean G/SI2 would do very well in today's market.
• I am not sure where outside the US you are located, but if you located in an Asian culture, and look to sell or trade locally then you will probably have issues. A strong emphasis is placed on both color & clarity.
• Trying to predict future financial markets is rough. Also, the supply/demand of product and buyers preferences can shift as well. For instance, we are seeing a shift in millenial buyers where they don't care about some of the qualities of previous generations. This isn't to say there will be no market for your stone should the mainstream change, but a reasonable assumption would be that it will not necessarily be the same as now.
• Many times when we need or want to sell something, markets tend to work against us and our goals. At least that has been my experience.
• I kind of feel your long-term vision (that has factors you can't accurately predict) is clouting your short-term decision making. I struggle with this with larger monetary investments (stocks, homes, etc) as I tend to look long-term vs short-term. In reality, buying a stone that meets your budget and "pretty" criteria (super ideal, color, eye clean, etc) is what matters today. Those are all factors within your control. I wouldn't increase my budget to buy a G VS1 based on what may or may not happen in the future.
• Things you could consider to future proof your next purchase or upgrade, would be to ask Wink what his succession plans are for when he retires (as you indicated, the guarantee is only as long as the vendor is there and no negativity is implied or meant here). Rather than deal with the hassle of trade/upgrade overseas, you could get a plane ticket to the US and do the swap in-person and wear the new stone back home. That plane ticket is much cheaper than jumping from an SI2 to a VS1 for instance.
• Unless you need to sell for distress reasons, you will have time to plan and maneuver around the best option for you when & if that time ever comes.

I know I’m a worry wart!!! But seriously thanks for analysing this. It is a major purchase for me so I really want to make sure I don’t super regret it.

I do really find all the discussions/perspectives very helpful so thanks again everyone for sharing your experiences and/or thoughts.

 

[icy_jade]

This is an excellent summary.

I am rather the opposite when it comes to jewellery - I tend to prioritize “make me happy today” at the expense of “consequences tomorrow”, and I’ve learnt some expensive lessons over the years. Your way seems far better, over-analysis pains and all

Very very painful lol. I’ve hesitated over buying a large (to me) diamond for years.

 

[Blingalingaling]

Have y'all read @icy_jade's other post about the specific diamond she's considering? It's on Rocky Talky today:
2.05 G SI2 - Pls help me evaluate this diamond by icy_jade

 

[Miki Moto]

I know I’m a worry wart!!! But seriously thanks for analysing this. It is a major purchase for me so I really want to make sure I don’t super regret it.

I do really find all the discussions/perspectives very helpful so thanks again everyone for sharing your experiences and/or thoughts.

May I suggest you pause with PS for a moment, go out this weekend in your own surroundings (not PS), and then ask your heart what it's telling you. Our opinions are just that, opinions. We all have different priorities, we live in different countries, and we have different social customs and preferences on diamonds.

Since being on P.S., I have gotten a lot of great advice, but in the end, I need to stop and remind myself of who I am and what matters to me.

That might help in your decision.

 

[sledge]

I know I’m a worry wart!!! But seriously thanks for analysing this. It is a major purchase for me so I really want to make sure I don’t super regret it.

I do really find all the discussions/perspectives very helpful so thanks again everyone for sharing your experiences and/or thoughts.

Very very painful lol. I’ve hesitated over buying a large (to me) diamond for years.

You're welcome @icy_jade. I really do hope it helps you reach a decision!

Having participated in some therapy before, one thing I learned is that we cannot expect to make perfect decisions with imperfect information. This applies to all facets of life.

Another thing I took away is that sometimes we need to give ourselves "permission" to be okay with a certain decision. Yes, it could have detrimental effects. Or it could be the best decision we made. By telling ourselves we are making the best decision possible based on the available information at that point and space in time, it then allows us to emotionally to overcome whatever obstacle we are facing or is holding us back.

I won't ever tell you how to spend your money, but it sounds like you have mauled this decision over for quite sometime and if this stone is something that makes you happy and fits your budget constraints without causing you any other hardships, then I think you should give yourself permission to move forward.

 

[Rockdiamond]

An important fact to keep in mind when considering resale is that the PS market is a very small fraction of the overall diamond market
As an example- readers here are far more concerned with aspects of cut than the overall market.
Which is why HOF vs Tiffany gives the type of results that Miki Moto experienced.
I'd say 95% of diamond shoppers have heard of Tiffany, whereas 10% of shoppers know of HOF - or superideal, or HCA, leakage- so many things that are "common knowledge" here on PS are super boutique in the "real world".
Same for high color, low clarity stones- as a share of the overall market, they may be small, but personally, I love them- and so do many of our clients.

 

[SimoneDi]

@icy_jade Hi! Yes... surfing PS and looking at diamonds can be tiring and time consuming! I am sure you will find what you are looking for and @SimoneDi is always super knowledgeable. Good luck to you!

@Miki Moto you are too kind! I can say that your input on this forum has been really valuable and it’s always good to find another Tiffany lover!

 

[oldminer]

Rockdiamond has painted a perfect example of a large part of the diamond market. It is a market which remains quite generally secret and obscured to the general consumer even as retail pricing has become far more transparent. Selling an unwanted diamond is not at all the same as buying one you chose for personal use.

My best suggestion is to do your research first and to make the purchase so smartly that it will keep you content for a long time. Never buy what you are not deeply committed to owning. Whatever diamond you buy today, of any quality combination, may continue to have some percentage of residual liquidation value at a distant future time, but no one here can tell you how much in a forecast of the future. Likely, there will be some value in the future, but no one is qualified to predict the amount. Buy what pleases you the best. Buying what pleases someone else the best might be bad advice for you.

Selling unwanted diamonds to an estate diamond dealer or street savvy consumer, in the past or in the present has always been far less researchable than buying one at retail for your own use. I don't think you can forecast much about future values of a commonly sold diamonds you have chosen to buy because there is so little market evidence of actual transaction data second hand. Major large and fine diamonds and the truly rare colored diamonds which trade at brand name auctions are somewhat the exception, but few normal consumers buy or own such costly and important diamonds. Those extraordinary gems have little in common with the masses of diamonds normal, somewhat affluent consumers might wish to buy or own.

 

[icy_jade]

Thanks again everyone who has responded. I’ve said this but I’ll mention again that I find all the different perspectives very helpful in my decision making process.

May I suggest you pause with PS for a moment, go out this weekend in your own surroundings (not PS), and then ask your heart what it's telling you. Our opinions are just that, opinions. We all have different priorities, we live in different countries, and we have different social customs and preferences on diamonds.

Since being on P.S., I have gotten a lot of great advice, but in the end, I need to stop and remind myself of who I am and what matters to me.

That might help in your decision.

I’m thinking hard whenever my toddlers allow me to do so lol.

You're welcome @icy_jade. I really do hope it helps you reach a decision!

Having participated in some therapy before, one thing I learned is that we cannot expect to make perfect decisions with imperfect information. This applies to all facets of life.

Another thing I took away is that sometimes we need to give ourselves "permission" to be okay with a certain decision. Yes, it could have detrimental effects. Or it could be the best decision we made. By telling ourselves we are making the best decision possible based on the available information at that point and space in time, it then allows us to emotionally to overcome whatever obstacle we are facing or is holding us back.

I won't ever tell you how to spend your money, but it sounds like you have mauled this decision over for quite sometime and if this stone is something that makes you happy and fits your budget constraints without causing you any other hardships, then I think you should give yourself permission to move forward.

Thank you for sharing this. It’s such a kind thing to share with an online stranger and it made me feel so much better. Thanks again.

 

[david b]

Are you referring to SI2 as low qualit?
I think that as long as the SI2 is eye clean from 20 cm it is a Good one. Buying a diamond is never an investment, it is for
enjoying. You can never know what will be the market trends when (and if at all) the time will come to sell it

David

 

[BlingDreams]

My diamond studs are D/SI2 and E/SI1. Why that high color/lower clarity combo? Because DH wanted colorless diamonds and those parameters fit within the earrings budget. If I ever was to resell or trade them, I might take a hit because of clarity but that’s ok; I’m wearing them for the beauty that they are now and try not to worry about the future since I had very little say in choosing them.

However, if I HAD had a say in choosing them, I would have been okay with the same color/clarity combo but would have purchased them from a retailer that offered 100% trade-in value!

 

[icy_jade]

Are you referring to SI2 as low qualit?
I think that as long as the SI2 is eye clean from 20 cm it is a Good one. Buying a diamond is never an investment, it is for
enjoying. You can never know what will be the market trends when (and if at all) the time will come to sell it

David

I know that but I would like to make a considered decision. Am not anticipating any financial hardship but just good to know I guess...

I mean with Lightbox who knows how the market will develop anyway right?

SI grades in Asia are probably perceived like I grades in the US?

However, if I HAD had a say in choosing them, I would have been okay with the same color/clarity combo but would have purchased them from a retailer that offered 100% trade-in value!

Yeah. I wish I’d thought to do that for my earrings too. Argh.

 

[yennyfire]

PS is an entirely different entity than “the real world”. I specifically wanted an I/J SI1 OEC and spent quite a long time hunting for one that also met my criteria for facet pattern. I prefer NOT to pay for clarity I can’t see, so an eye clean SI1 is perfect for me. I think you’ve been given excellent advice. The bottom line is that you buy what sings to you. If you know that you want to upgrade in the future, purchase from a company that has a good trade in policy. I think that the stone you are looking at is gorgeous! Good luck and I can’t wait to see what you purchase!

 

[msop04]

However, if I HAD had a say in choosing them, I would have been okay with the same color/clarity combo but would have purchased them from a retailer that offered 100% trade-in value!

This is the key when anticipating an upgrade... it's so important to consider each vendor's trade-in/upgrade policy and not just the prices. I chose Diamonds Direct because they offer 110% of purchase price towards any upgrade diamond. No restrictions whatsoever. All you have to do is trade for a stone that is $1 more than what you spent previously, and it's yours... for $1. ...and I'm lucky to have one locally.

 

[WinkHPD]

Things you could consider to future proof your next purchase or upgrade, would be to ask Wink what his succession plans are for when he retires (as you indicated, the guarantee is only as long as the vendor is there and no negativity is implied or meant here).

LOL. You know, I must give people the impression that High Performance Diamonds is about me, and me only. Either that or someone’s trying to scare people away from buying here, because my staff has received this question a lot recently!

It is, however, an excellent question Sledge. When, and if, I retire, High Performance Diamonds will continue in very capable hands. We are a corporation and our succession plans are well in place.

Wink

 

[OoohShiny]

This is the key when anticipating an upgrade... it's so important to consider each vendor's trade-in/upgrade policy and not just the prices. I chose Diamonds Direct because they offer 110% of purchase price towards any upgrade diamond. No restrictions whatsoever. All you have to do is trade for a stone that is $1 more than what you spent previously, and it's yours... for $1. ...and I'm lucky to have one locally.

Wait... what?

So you could buy a $10k stone then upgrade to an $11,001 stone for $1?

Surely that could continue forever?

If so, that would mean that for the grand sum of $10, you could upgrade from a $10k stone to a stone worth $67.3k in 20 trades?

10000
11001
12102.1
13313.31
14645.64
16111.21
17723.33
19496.66
21447.32
23593.06
25953.36
28549.7
31405.67
34547.23
38002.96
41804.25
45985.68
50585.25
55644.77
61210.25
67332.27


Have they thought this through?? lol


(Have you got their number? )

 

[WinkHPD]

Dang, Oooh Shiny, I think you are on to something. Get me their number too!

Do I hear an oops coming soon?

Wink

 

[Dancing Fire]

It is, however, an excellent question Sledge. When, and if, I retire, High Performance Diamonds will continue in very capable hands. We are a corporation and our succession plans are well in place.

Wink

FYI, Once Wink decides to retire I'll inherit all of his HPD inventory.

 

[Sagebrush]

Diamond buyers must accept a basic truth. Diamonds are a consumer item not an investment. Gems are valued for beauty not trade in value. In this context, high color, great cut, SI clarity makes a lot of sense. Why pay, as Msop4 suggests, for something you cannot see.

RWW

 

[icy_jade]

LOL. You know, I must give people the impression that High Performance Diamonds is about me, and me only. Either that or someone’s trying to scare people away from buying here, because my staff has received this question a lot recently!

It is, however, an excellent question Sledge. When, and if, I retire, High Performance Diamonds will continue in very capable hands. We are a corporation and our succession plans are well in place.

Wink

Whoops, hope my original question didn’t trigger this. No ill intent meant!

 

[icy_jade]

Diamond buyers must accept a basic truth. Diamonds are a consumer item not an investment. Gems are valued for beauty not trade in value. In this context, high color, great cut, SI clarity makes a lot of sense. Why pay, as Msop4 suggests, for something you cannot see.

RWW

I suppose the concept of diamond retaining some value is something unique to the diamond industry/market?

I have A LOT of pearls, far more than... I dunno, so many that I don’t even count how many pieces I actually have. The thing is resale value is never something that I consider when I buy pearls, and no one offers trade in. I’m not even sure how long pearls can last (even if well taken care) because they are not like the most durable thing around. But because it’s not a concept in the pearl market, I don’t consider these factors and just buy pearls simply because I like them...

Least someone mentions that pearls generally cost less, I actually have several Tahitian and south sea pearl strands that are EACH worth a sizeable diamond...

The same applies to colored gems. No trade-in or buy-back that I’ve heard.

But, when it comes to diamonds, trade-in and buy-back is actually a thing. So the concept of value retention is there. I don’t think anyone actually expects to earn from diamonds (unless you buy some super expensive fancy color), but some form of value retention is definitely a thing. And it’s unique to the diamond market as far as I’m aware.