GIA Reports

[maddie]

Couple of questions:

1. I''ve noticed some GIA reports date way back 2-3 years - I''m assuming this means that the diamond is second hand? Is that anything to be concerned with?

2. I have a report that states under comments:
Pinpoints not shown
Internal graining is not shown

Help would be greatly appreciated.

- M

 

[strmrdr]

In todays market a second hand diamond is worth considerable less than a "new" one except some dealers think they are special and can get the same price for both while the consumer cant.
In an ideal word they would be the same price because they are the same diamond but the price of diamonds is mostly marketing and BS and another consumer isnt willing to pay a consumer for marketing and BS.
Why they pay debeers for it is beyond me and the subject of another rant :}

It does happen that a diamond gets sidetracted and not sold for that long but it happens a lot less than some dealers would want you to believe.

 

[Richard Sherwood]

Gosh Storm, you are such a cynic...

Maddie, it is no big deal for a diamond to have a 2 or 3 year old cert. Dealers are one of the major consumer groups of diamonds, and diamonds are often traded dealer-to-dealer for months or years before they every reach the consumer market.

A diamond with a 2-3 year old cert is worth the same as the same quality diamond with a 2-3 day old cert.

 

[DiamondExpert]

Maddie - basically your assumption is incorrect.

strmrdr - basically you're talking nonsense.

 

[Garry H (Cut Nut)]

I too am going to sink the boot in S

I have diamonds that are more than 3 years old in my stock - some were in 1 ring for 18 months - did not sell, got pulled apart and reset (6 months later) and still have not sold.




Besides a 10 year old GIA SI2 would be likely to be todays SI1.


It is easy to check the stone for damage

 

[mdx]

The nice thing about diamonds is the engine does not need to be serviced, the tires never go flat and in a hundred years time its going have the same properties
Johan

 

[carina]

but after a few hundred years I read they crumble?

 

[strmrdr]

----------------
On 5/17/2004 6:49:29 AM mdx wrote:

The nice thing about diamonds is the engine does not need to be serviced, the tires never go flat and in a hundred years time its going have the same properties

Johan----------------

Then why cant consumers get the same price for them as dealers?
Why is the secondary market so depressed?
if not for the reasons I stated above.

 

[noobie]

----------------
On 5/17/2004 1:31:46 AM Cut Nut wrote:







Besides a 10 year old GIA SI2 would be likely to be todays SI1.

----------------

Why is that? Are grading standards less strict now?

 

[strmrdr]

Yes Richard I will admit to being a cynic when it comes to diamond prices and the actions of SOME dealers but with good reason :}

DiamondExpert,
Are you saying that a "used" diamond never gets sold by a dealer as a "new" diamond at new diamond prices?
Are you saying that a "used" diamond never gets sent off to be re-certed and sold as new?
Dont mention the libary of previous diamonds that gia is suposed to check to see if the diamond had been graded before because there are a ton of stories of dealers who resubmit diamonds to gia for a better grade.
Then there is always getting an egl,ags or regional cert even if the gia database would catch them.
Are you saying it never happens?

Whats your answer to the questions above I asked mdx?

 

[WinkHPD]

strmrdr,

It is an interesting phenomina that consumers (privates) can not seem to get the same price as vendors and at first glance it seems unfair.

However, there are some factors that must be considered.

1. As a consumer you do not have the aura of expertise that a retail or internet vendor has. We sell thousands of stones per year and are expected to make a profit doing so as our clients will want us to be here next year. We are comfortable and at ease in presenting a diamond to our clients, it is what we do day in and day out. A private is usually trying to sell only one stone and your customer only wants the best price, not a relationship. My use of the words client and customer is intentional. A client is under the guidance and protection of the vendor. A customer comes in, gets the best price he can and most often never sees the vendor again. A client may pay a few dollars more in exchange for the expertise of the vendor and for trade up policies and warrantees that the private can not offer.

2. It is understood that the vendor has overhead in the form of rent, equipment, carrying costs for inventory, etc and that these costs must be covered. A private has none of these costs and can not reasonably expect to be compensated for them.

3. A vendor offers a wide selection of items to choose from, a private usually only has one or at best a few items, and it is always easier to sell when you have a selection available.

4. Probably the most visceral of the reasons. A vendor is rarely in distress over why the item is for sale, a private is usually under distress and often duress. Needing the money to pay the rent is a HUGE incentive to let go quickly and cheaply, especially when the first couple of dozen people you have talked to terated you like trash. If you are going to loose your house or your car or your (fill in the blank) tomorrow, the diamond gets sold real cheap today. It may not be fair, but it is what it is.

5. Tied with some of the others above, but deserving its own paragraph is the FACT that people come to us looking for diamonds. We are going to see hundreds and thousands of people during the year WHO ARE LOOKING TO BUY FROM US. A private will probably see a few dozen, all of whom are NOT EXPECTING YOU TO BE SELLING A DIAMOND and will therefor be much harder to sell.

I offer these items as some of the reasons why privates do not have very good luck in getting retail prices for their gems. Another that applies especially to this forum is that internet privates have gotten used to dealing with vendors on incredibly tight margins. Abazias appears to be working on about 2%, which explains why they are now filing papers stating that they may not have enough operating capital to survive until years end. Yet the public perception is that we are still making a HUGE profit. Take that perception, apply all of the above factors to it and now the private makes even less of a percentage of the true wholesale value than they did before as the assumtion is that on a 10k stone there is a 5k profit. This was true twenty years ago, but today there may be only 2-300 dollars profit on that stone, so when it is discounted to buy from a private stones will change hands at prices that a dealer would salivate over.

When I buy a stone from a private I offer two prices. One, I will pay full wholesale when and if I sell the stone, I would just as soon pay a local person the money as a wholesaler in New York, but I will pay not a penny more than I would pay my normal wholesalers. Two, I will write a check today for one half of wholesale and only if it is a stone that I want. If it is a stone that needs to be recut or is otherwise not something I want I will make an offer that is much lower than that, and I will explain the true value at wholesale to my client. This may sound somewhat brutal to many, but it is amazing to me how many people shop their stone around and end up selling it to me as the highest bid by far. (See reason 4 above re the house payment etc.)

Anyway, I hope this answers your question as to why a private usually can not get the same price as a normal vendor of the product. Mr. Trump and I could own identicle properties and he would get more for his for many of the same reasons. It would not be any better, but people expect him to get a better price, and he does.

Wink

 

[elmo]

----------------
On 5/17/2004 9:43:49 AM strmrdr wrote:


Are you saying that a 'used' diamond never gets sent off to be re-certed and sold as new?

Dont mention the libary of previous diamonds that gia is suposed to check to see if the diamond had been graded before because there are a ton of stories of dealers who resubmit diamonds to gia for a better grade.
----------------

He's saying that it's a non-issue. One reason is that all a dealer or consumer has to do is send the stone to the GIA with the old report, and for 75% of the price you get a brand new report with a brand new date. Voila, new stone. Assuming that the stone wasn't damaged along the way, there's simply no way to tell the difference. So it's effectively a non-issue.

Also FYI I don't think a dealer typically resubmits a stone without telling the GIA what it is, because for a much lower price the GIA will simply recheck color or clarity by putting it back through the grading process. Therefore you can try to get 2-3 different graders to make the call you want, several times even if the potential difference justifies the cost.

 

[hoorray]

Strm...

A diamond is an asset that doesn't deteriorate (unless it gets chipped or something). It is usually no worse than it started as after 15 or 100 years, so why shouldn't it garner the same price as a newly mined/cut equivalent one? I couldn't care less when mine was mined. I would want it to be "like new", but there is no negative to me if it has been around a while as long as it is in new-like shape. I wouldn't want a "used" ring except maybe an antique one. But it's because of the ring's stigma and wear and tear -- not the stone's. I can guarantee you that the big ticket stones get unset and resold for full value. They are too expensive of an asset not to.

That said, consumers aren't in the diamond distribution channel to be able to easily resell them at full price. They have to be able to insert their stone into that channel at the proper pricing for what it is worth, and not under duress, as Wink mentions. Selling outside of the established channel will discount it by definition since there is more risk and less value add to the process. Individuals selling on ebay are a prime example of that.

 

[fire&ice]

----------------
On 5/17/2004 10:00:36 AM Wink wrote:

strmrdr,

As a consumer you do not have the aura of expertise that a retail or internet vendor has. ----

This is the bottom line. An individual will never be able to sell anything at retail price vs an established business that specializes in such item. It's really that simple - no conspiracy theories.

 

[strmrdr]

So your saying that there is a huge double standard that a used diamond is not worth much untill it gets back into the hands of the elite ruling class and their minions of evil?
Peons need not apply.


Thats an extreme way of putting it but i couldnt resist and im sure you get the idea. :}
hehehehehe

 

[noobie]

----------------
On 5/17/2004 1:58:36 PM strmrdr wrote:





So your saying that there is a huge double standard that a used diamond is not worth much untill it gets back into the hands of the elite ruling class and their minions of evil?
Peons need not apply.


Thats an extreme way of putting it but i couldnt resist and im sure you get the idea. :}
hehehehehe
----------------

No, I think they're saying that there's no established and accepted distribution channel for the general public to sell diamonds at or near the same price that the trade do.

However, I actually wish I could buy a used diamond conveniently at less than wholesale.

 

[strmrdr]

----------------
On 5/17/2004 2:41:03 PM noobie wrote:

----------------
On 5/17/2004 1:58:36 PM strmrdr wrote:



So your saying that there is a huge double standard that a used diamond is not worth much untill it gets back into the hands of the elite ruling class and their minions of evil?
Peons need not apply.


Thats an extreme way of putting it but i couldnt resist and im sure you get the idea. :}
hehehehehe
----------------

No, I think they're saying that there's no established and accepted distribution channel for the general public to sell diamonds at or near the same price that the trade do.

However, I actually wish I could buy a used diamond conveniently at less than wholesale.

----------------

Thats exackly the way the industy wants it and keeps it by recycling used diamonds as new while offering pennies on the dollar for them used.
With a few exceptions.
There is no justification for a diamond doubling-3x in price just because a dealer touches it.

As for finding one you can just hit the pawn shops but keep in mind that most of them will be crap and finding a good used diamond takes work but it can be done... I did :}

 

[fire&ice]

----------------
On 5/17/2004 5:27:22 PM strmrdr wrote:

----------------
On 5/17/2004 2:41:03 PM noobie wrote:

----------------
On 5/17/2004 1:58:36 PM strmrdr wrote:



P>No, I think they're saying that there's no established and accepted distribution channel for the general public to sell diamonds at or near the same price that the trade do.
----------------

Thats exackly the way the industy wants it and keeps it by recycling used diamonds as new while offering pennies on the dollar for them used.
With a few exceptions.
There is no justification for a diamond doubling-3x in price just because a dealer touches it.

----------------

It's not the diamond industry. It's business as usual. I can always get more for an item of my specialty. One, I have expertise. People know it is what it is. Two, I am easier to find. Conversely, I sell things that are not my area of expertise at wholesale. Nothing sinister...just the facts of commerce.

Edited to add: I would pay more money to someone who I regularly buy from than a one trick pony. Another business sense.

 

[Garry H (Cut Nut)]

Leonid tried to establish an auction forum here on PS so you guys could do this - but not one of you made a bid!!!!


You all seemed to want buy back and refund ability etc.


We even tried to have appraisers arbitrate, in the end we gave up!


I even sent some jewellery from Australia to put there. Waste of time.




Conssumers seem to want to buy from vendors, even on Ebay this seems to be the evolving business model.




It is more about consumer behaviour than any suspicious trade practice S

 

[strmrdr]

Cut Nut,
Are you telling me there is something else besides being terrified of an active used market picking up behind DeBeers a diamond is forever campaign?
Diamond prices would collapse like a house of cards if too many people tried to sell them at once.
In the past DeBeers and friends bought up as many as possible to keep it from collapse they aren’t in a position to do that again.
The diamond industry is built on the backs of near slave labor, bought politicians, corrupt policies, criminal activity, huge advertising ,controll and huge markups.
It is doomed as we know it today,
Honestly the survivers are likely to be the very vendors on this forum who the old school feels threatened by and are trying to silence.
They in a lot of ways are the forfront of the changes.
Someday it will change.
Then I could feel better about buying the diamonds I love :}

 

[hoorray]

That's pretty interesting Garry. It must have been before my time here. I've often wondered what it would take to create a "safe" and efficient market for reselling diamonds and jewelery. I guess the unknown, the risk and the expense makes people really move to the "safe" end of the spectrum. I owuld have thought the appraiser assistance would have helped mitigate that.

Strm -- I think you are missing the fact that many posts higher Wink said he would buy stones he liked for his normal wholesale price. I think that's pretty good. It's an entry to the distribution chain without a big discount -- you just have to bear "the cost of the inventory". You are getting the market price of the point you enter the chain which is all you can expect. If you try to sell at retail consumers don't have the value-add knowledge and experience or customer demand pull that an established retail business would have so you would never get full retail. There is more to the price of a diamond than just the value of the carbon. Over and over people here say they are willing to pay more to buy from a local jeweler, or to pay for better customer support. The raw value of the carbon is only part of the cost/price equation. Yes -- the Debeers cartel control the "big" picture of the diamond market at this point, but many of the consumer resale issues have to do with typical distribution chain costs, risks, and value-adds.

 

[Garry H (Cut Nut)]

Gee S, are you old enough to have had commies under your bed?




Markets are markets.


Micrsoft is a far more powerful organisation than a bunch of fuddy duddy south African Pom's wrestling to stay relevant agaisnst the forces of globalization.




There is no more slave labor in this industry than any other that mines and handles goods by hand (cotton to coffee for example). You might be discussing life in general, rather diamonds specifically.

 

[strmrdr]

lop,
I didnt miss it, he is one of the exceptions and one of the new breed I talked about earlier.
wink is one of the people in the industry I respect along with a lot of others here.
I can disagree and argue with people that I respect for that matter im more likely too because if I dont respect a person then usualy they arent worth wasting my time argueing with.
For that matter just because I respect someone does not need to mean that I agree with everything they do either.

 

[strmrdr]

lol Cut Nut
Im am old enough that the basement of the elementary school I went too was a fully stocked bomb shelter.
Don’t get me started on MS they are the bane of my existence at work.

 

[aljdewey]

----------------
On 5/17/2004 9:43:49 AM strmrdr wrote:





Are you saying that a 'used' diamond never gets sold by a dealer as a 'new' diamond at new diamond prices?

----------------

Storm......I can see it's been a 3-twinkie day for you, huh? You have got to lay off the sugar....it makes you lose your mind. I gotta hand it to you......you continue to just jump right in the fray.

First of all, you cannot compare diamonds to other commodities like cars, etc, because they don't typically incur damage/deterioration, so it doesn't matter if they are 1 year old or 50 years old. (Before you have another fit, it is true that diamonds can chip, etc, but that's *not* the rule.)

So, it doesn't matter if a diamond is "used", as you call it. Secondly, there are a whole host of valid reasons why a second-hand diamond sells for far more with a dealer than with a private sale. Assume for a moment that two 1.2, H, SI2 diamonds are for sale. Both are selling for $5500. One is from a vendor and the other is being sold by a private individual, and consider the following questions.

1. Why would I want to buy a diamond from an unknown individual instead of an established vendor that I could research/check credibility on?

2. Why would I want to buy a diamond from someone who has no equipment/expertise to tell me anything meaningful about the stone? The individual doesn't have anything to even prove it's a diamond!

3. Why would I want to buy from the individual when, for the same price, I can buy from a vendor that offers a return policy, an upgrade option, and a warranty?

4. What happens if I have problems with the diamond or setting down the line? How is the individual going to help me post-sale?

5. What can I do to recover my money from the individual if I discover the diamond isn't what it was represented to be?

All of these things represents RISKS that the buyer takes or sacrifices that a buyer makes.....and they do so because the reward is a MUCH lower price. That is why "used" diamonds aren't worth nearly as much from a private individual as they are from a dealer. It's not because they are "used".....it's because the risk factor goes up.

Also, for those who are superstitious, they may not want to know that the diamond is being sold because someone's engagement broke off. Sometimes it's better to have less information on personal things, and the dealer gets that opportunity.....the individual doesn't.

 

[strmrdr]

yea al that used diamond is just worthless untill a dealer gets there hands on it.
There are benifts to buying from a dealer true but thats not the point.
If diamonds were truely a valueable item It would be the same price no matter where it came from or how old it is.
The deck is stacked intentionaly to keep private sales down.
Study the history of the diamond trade some time :}
btw I dont like twinkies! :}

Can I compare it to another valuable item thats directly comparable?
Gold.
I can buy gold at just over spot and sell just under any time I want from or too a dealer or at spot to consumers a difference of at most 2-3% off spot.
Note im not talking about gold jewlery wich is even stacked worse than diamonds :}

 

[Garry H (Cut Nut)]

Lets see if we can help S

Gold IS a commodity.


9999 or 99.99% - it is usualyy not possible to tell where it came from. It trades at a set price plus a very small commision to cover very low costs. Usually people never take physical possession of it - so there is not even a shipping cost. The gold at the bottom of the twin towers may still be there - no matter - it is safe and accounted for.




Ever seen how many prices and variables there are with diamonds?


They need value adding sales and after sales services, if they did not then they would be sold like gold - for 1/2% above daily fix.




Now what is the second hand market for dresses, hamburger's, car's (buy a 3 year old from a dealer and you get a guarantee, buy from a private and take your chances)




Get it?

 

[aljdewey]

----------------
On 5/17/2004 9:59:57 PM strmrdr wrote:





yea al that used diamond is just worthless untill a dealer gets there hands on it.
----------------

Storm, why do you insist on making discussions an "all or nothing" slant? No one said a diamond is *worthless* until a dealer gets it......we said it wouldn't command as high a price. I don't understand why this doesn't make sense. You yourself went onto the secondary market to get a diamond why???? Right.....to SAVE money. You were able to do so because you were willing to sacrifice some of the amenities.

If diamonds were truely a valueable item It would be the same price no matter where it

came from or how old it is.

You're refusing to acknowledge that there are more elements that affect the price than just the stone. Offering a lifetime upgrade comes at a cost. Purchasing equipment to analyze/verify diamonds comes at a cost. Supporting overhead to run a business comes at a cost. Those costs are passed on to the consumer in the price of the diamond. Why should a private individual command the same price when they don't incur the same costs?

It would be the same price no matter what? There are tons of models that defy that thought. I'm sure this will be a weak analogy, but think about seating on airplanes for a moment. I've flown on flights where the guy sitting in the seat next to me paid much more than I did for my seat. I, however, agreed to restrictions in order to get that price. I agreed that it was non-refundable, I agreed to pay a fee to change details, and I had a limited time to purchase seats for that money. The airlines know that they have limited my potential cost to them, and I get a break on my seat in exchange for that.

 

[fire&ice]

----------------
On 5/17/2004 7:22:54 PM strmrdr wrote:

Cut Nut,
Diamond prices would collapse like a house of cards if too many people tried to sell them at once.

----------------

Storm, you really are talking basic economics here. Quite trying to slay windmills.

 

[strmrdr]

cut nut:
I get screamed at when I compare cars to diamonds but since you brought it up.
You can get the same aftermarket warrenty on a used car from a private individual as one from a dealer for about the same cost in the US.
Most warrenties on used cars are run through 3rd party companies here im not sure how it works in your country.
A consumer can and often does get the same price for a used car that a dealer would.
As a matter of fact the last time I sold a used car thats how I got my selling price called around and got the no warrenty price for the same car buying from a dealer.
I got very close to that amount also.
The price of used cars does not jump to 100% of the new car price just because you buy from a dealer.


al:
Your missing that lifetime upgrade policies dont usualy cost the dealer anything as long as the price of diamonds keeps increasing they wont lose a dime and that is what they are betting on.
The lower the margin they work under the more generous they can be with them and still make close to the same amount of money.
Lets say they operate on 25% margins it takes a lot less time for the price increases to reach 25% than 100% just in the last year its been what a 10%-15% increase?
A dealer could buy a diamond back at what someone paid for it a year ago, sell it and still make a profit.
Great incentive to keep the prices high isnt it?

There are benifits a dealer offers and if there was a healthy second hand market with reasonable markups for dealers on used goods we wouldnt be having this conversation.

f&i:
name one other industry that has the same economic model as the diamond industry where used goods become worth 100% of retail when a dealer touches them and 15% of retail to the private seller.
And yes im slaying windmills a little but I find it interesting and hope no one is getting too bored reading it so im willing to play a little more if anyone else wants too :}
There is some good info here for someone who is looking to buy on the used market.
The advantages of buying from a dealer have been very well stated.
The main issue of contention is the price difference and the lack of a healthy secondary market and wether its intentional on the part of the industry. Not if there are or arent advantages to buying from a dealer.