Pricescope questions

[buyza54]

I am looking to purchase a ring for my girlfriend, and have been looking through pricescope but had a few questions I did not see in the FAQ section:

1. How does pricescope compare to B&M prices? Should I expect what I see on PS to be the same as in person, or is PS much cheaper?

2. I saw a few private sellers with nice pieces, is PS a good way to indicate if I am getting a good deal?

3. Lastly, assuming that once we are married, and have some money, how much return on our investment should we expect if we want to upgrade? I know I won''t profit, but if I paid 3k for a ring, should I expect to sell it back for 1000 to a B&M? Or what.

Thanks a lot for all your help!

 

[Garry H (Cut Nut)]

Date: 9/9/2007 11:46:39 PM
Author:buyza54
I am looking to purchase a ring for my girlfriend, and have been looking through pricescope but had a few questions I did not see in the FAQ section:

1. How does pricescope compare to B&M prices? Should I expect what I see on PS to be the same as in person, or is PS much cheaper? Pscope does not sell diamonds. It allows various vendors to list stones side by side - so it makes for a very competitve situation.

2. I saw a few private sellers with nice pieces, is PS a good way to indicate if I am getting a good deal?

3. Lastly, assuming that once we are married, and have some money, how much return on our investment should we expect if we want to upgrade? I know I won''t profit, but if I paid 3k for a ring, should I expect to sell it back for 1000 to a B&M? Or what. many pscope vendors and B&M stores will give you a trade up option where they might make no margin on your original purchase re-sale, but only make some $$ on your new contribution. Some have a restocking fee, which might cover a new grading report of whatever.

Thanks a lot for all your help!

 

[buyza54]

Still wondering:

I saw a few private sellers with nice pieces, is PS a good way to indicate if I am getting a good deal?

And what if I don''t get a trade up option with the store I acquire it from. I have found a rind that in stores in my local B&M is 3000, but private party is selling for 2000. Is it Realistic to think in a few years I will be able to get 1000-1500 for it from a jeweler?

thanks again for all the help!

 

[WinkHPD]

Date: 9/10/2007 10:46:10 AM
Author: buyza54
Still wondering:


I saw a few private sellers with nice pieces, is PS a good way to indicate if I am getting a good deal?


And what if I don''t get a trade up option with the store I acquire it from. I have found a rind that in stores in my local B&M is 3000, but private party is selling for 2000. Is it Realistic to think in a few years I will be able to get 1000-1500 for it from a jeweler?


thanks again for all the help!

Impossible for us to say without knowing more. It could be a designer piece that is price protected, or it may be a piece that any of the vendors here could make for $1000-1200. For us to guess at what a jeweler might give you in trade is totally impossible. That will depend on how well it is cared for and how worn it is when you go for the trade.

You may get nothing but scrap for it too, it is VERY difficult for a jeweler to sell a used engagement ring, it is not high on the list of things that people want.

Wink

 

[buyza54]

Well the person is selling this:

here

half off retail. I can possibly get it cheaper. Wondering if a few years down the road I could get my money back assuming I paid 2k, since its a 4500 set.

 

[denverappraiser]

PS advertisers are very competitive dealers with one another but it has very little to do with the resale or secondary market. Certain items, like ideal cut round untreated natural diamonds in popular sizes and grades do well here while others, like unusual shapes, poor cuts, and unpopular clarities and colors do very poorly. Several of the PS dealers will buy or accept consignments for items that are appropriate for them and you can realize as much as 75% of the prices that are being asked. For the right items, it can move with reasonable speed. Unfortunately, most individual sellers paid higher prices than what are listed here and the merchandise is often misgraded or simply inappropriate for this marketplace. This makes using the PS database a dangerous thing for estimating your own resale value.

Here’s an experiment. I apologize for all of the numbers:

Let’s assume that you’ve got a stone that was sold to you as a 1.01ct., G/VS2 round brilliant, pretty good cut in a $1000 mounting by a moderately well regarded local store.

Search the database at the top of the page titled ‘pricescope your diamond’ for 1.00-1.05cts/round brilliant/G/VS2. These are the default settings in the search engine. I get 1195 hits with 200 listed. Sort by price by clicking on the title of the price column and ignore the probable errors and the most expensive offer is $8120 while the cheapest is $3993. That’s more than a factor of 2 difference. Most are in the neighborhood of $6,500. For what it’s worth, Rap lists this stone at $7,200/ct.

Now adjust your search to include H/SI1, a single grade different in color and clarity. The bottom number drops to $3072. We’re close to a factor of 3, and that’s just using the PS dealers! Local dealers generally charge more because of their added overhead.

If the dealer called it an ‘average’ PS stone and put a 20% premium on top of the price, you’ll be paying $7,400, just over Rap plus the $1000 for the mounting comes to $8,400.. This is really not an unreasonable storefront price. They hand you an appraisal that says it’s ‘worth’ $14k and you go away happy, confident that you got a good deal.

Now you try to sell it. First, expect nothing for the mounting. ‘Used’ engagement rings are nearly impossible to resell unless there is something really special about it. They can recycle the gold but that’s usually about it. Let’s further assume that the buying dealer disagrees a little bit with the ‘average’ claim and/or they disagree with some of the grading. Maybe they think it’s really an SI1 or and H or they don’t care for the cutting. This sort of discrepancy is VERY common, even among credible vendors. They expect to sell it for $4,500 instead of $6,500. That’s not the bottom mind you but below what you thought. They want 25% of the sale price for a consignment fee and they want $150 to get an updated lab report from a different lab that sells better for them. This leaves you $3225, 38% of your original purchase price and a mere 23% of the ‘appraised value’. If you want to sell it outright, instead of putting up with the consignment process it’s going to be even less. Figure they’ll want more like 40-50% of the resale money so your price drops to $2,250.00. That may be a bit on the low side but it’s not completely crazy, especially if there’s a real problem with the grading.

After that first search, most folks would notice that $8120 number right away and figured they could live with 75% of that and stop right there. $6,090. That’s a 37% hit which seems fair. This is what quite a few people do and then they get appalled when they visit someone in the real world and get substantially different offers. Alternatively they take that $14k appraisal and say that it’s really ‘worth’ half of that or $7k and wonder why they aren’t getting bids on ebay.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[buyza54]

So If I am reading that correctly, its very reasonable and/or likely to get 1/4 of the pricescope price if resold later on to a jeweler? And possibly 1/3 if sold on consignment?

And I am going to assume more if its a very nice diamond (E VVS1 or so) vs less if it is (K I2).

 

[denverappraiser]

Date: 9/10/2007 12:47:22 PM
Author: buyza54
So If I am reading that correctly, its very reasonable and/or likely to get 1/4 of the pricescope price if resold later on to a jeweler? And possibly 1/3 if sold on consignment?


And I am going to assume more if its a very nice diamond (E VVS1 or so) vs less if it is (K I2).

Maybe, maybe not. The point of that was to demonstrate that using the pricescope database is not a reasonable way to estimate resale values. It may be 5%, it may be 150%. The difference will depend on information that isn’t available. Get it appraised and ask your appraiser what you can reasonably expect to see on resale.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[oldminer]

Neil, excellent effort at making the points about resale and the many unknowns that may occur in getting back money when a consumer wants to unload an unwanted diamond or piece of jewelry. I have found that the subject can be addressed by saying that the liquidation market is well below regular wholseale replacement cost. It is a fraction of legitimate retail. Much beyond this and it goes right past most folks and what they understand about the various levels of the complex market which exists all around us. I am always amazed by what seems like a quite sophisticated individual who cannot grasp the idea that what they just paid at retail, or as an end-user, is not likely what they can sell it for should the desire to sell the item. Unless a diamond is large, quite good quality and in scarce supply, there will be no one waiting in line to buy the one diamond you happen to have for sale. Therefore, in order to get it sold, you sell it cheaply or put it back in the drawer for a time when you want to sell it even more.

If you can obtain 1/2 or more from the asking prices on Pricescope you may be getting a decent offer. It is most difficult to draw any distinct line, just as Neil told you. Many diamonds will not bring 1/2 of Pricescope sales prices. At some point there is a price where someone will buy nearly anything. Its not easy to define and dangerous to create artificial expectations. The buy-back and trade-up policies of some vendors make good sense to consumers who take advantage of them.

 

[diamondseeker2006]

I''m not sure we are clear on what you are asking. But you should know that some vendors, such as WhiteFlash and Good Old Gold, offer 100% of the amount you pay for your stone toward a future upgrade. Very few jewelers do that without some strings attached. WF has no minimum and I think GOG requires that the new stone cost at least $500 more than the original. So I personally wouldn''t consider buying any other way. And we did plenty of shopping at regular jewelers and found that the prices from these vendors as well as the quality of the stones was much better. I''d never buy another diamond from a regular jeweler again.