Pricescope sell your diamond

[denverappraiser]

Some may have noticed that Pricescope has added a ‘sell your diamond’ feature here:
https://www.pricescope.com/sell-your-diamond

This is a system where people can offer stones for sale to an assortment of dealers who subscribe to the data. It’s still in something of a beta testing phase but it seemed appropriate to point it out for those who are interested in it.

I’ve had the opportunity to monitor it for the past month or so and I have a few comments that I think might make it work better for both sellers and buyers. This no doubt will change as it develops and I’m confident that the admins would be interested in people’s experience. Here are some thoughts of my own:

1) Remember that these are offers to dealers. Prepare yourself for bids that you may not like. You are unlikely to get offered retail prices. Most are offering to buy outright, some are offering consignments, and some are offering both. Understand the difference. The dealers HAVE been vetted by Pricescope but when you are ready to make a deal, remember to do this yourself too. Don’t just send your valuables to someone who responded to an email blast with an offer of big bucks.


2) When you fill out the form, the data goes directly to the dealers who are participating. They can respond or not as they wish. Even at the beta phase, there’s quite a bit of traffic and there’s a high possibility you won’t get a response at all. The problem is almost always lack of data. If you’ve got a GIA/AGS/IGI/EGL report, include enough info that a potential buyer can look up the report and do a preliminary evaluation. If you’re selling something that doesn’t have a lab exam on it, say this, don’t just leave things blank.

3) Include your contact information and, in particular, include the location of the stone. It WILL be necessary for you to ship the stone before any deal happens and NONE of the dealers will agree to prepay you before it arrives at their grader and they have the chance to inspect it. If this is one of your requirements you will need to find a different marketplace.

4) If you have some specific objectives in terms of price or speed, you can save a lot of time and aggravation by saying this up front. Dealers can and will bid whatever they want regardless of what you ask but if you play too close to the vest and just ask for as many blind email bids as possible, the result will be that the majority of buyers, quite possibly including the best, will refuse to spend their time dealing with you. My personal experience is that the majority of sellers seem to have unreasonable expectations and the buyers don’t want to spend the time either writing bids that are unlikely to go anywhere or in educating sellers anonymously. The way to calibrate your expectations is to get an appraisal in advance by a competent appraiser chosen by YOU. This is not an insurance appraisal and it’s not something that was supplied by the seller when you bought it. By all means mention that you’ve done this in your comments. There are free ways to figure out market values yourself and I may write a tutorial on it someday but suffice it to say that it is not a percentage of some unattributed insurance appraisal and it is not a percentage of retail asking prices in the database unless you are extremely careful about how you choose what is comparable.


5) I would venture to guess that 90% of the ones that I’ve seen pass by get no responses at all. This is either because the goods seem unattractive for an assortment of reasons, important data is absent (like the location or it includes a vague message like ‘contact me for grading details’) or they just don’t seem credible. If you’re one of these people, I feel your pain and I think you can improve your chances by being more forthcoming. What do you have? What’s your grading source? Where is it? How much do you want for it? Are you in a hurry or can you wait if it means more money?

 

[denverappraiser]

I wanted to address a specific fear that people seem to have with things like this, namely that of giving ‘too much information’. Let’s make an example.

For sale: 1.01 F VS1 GIA round x-x-x report number xxxxxx. Located in Frozen Dog Montana. Was offered $2000 by a local jeweler and am looking for at least $2500. Willing to ship to qualified dealer or appraiser for examination at your expense. Need payment within a week.

What will be the response? One choice is for a dealer to respond with ‘Great! I’ll take it for your $2500 asking price. Ship it to xxxx’. This seems to be what people are worried about because they fear leaving money on the table because they don't know the market value. Another is a dealer who says ‘That’s cheap. It’s quite possibly worth $6,000 or more. I’ll be happy to take a look and give you a firm bid with overnight payment. Let me know and I’ll arrange for FedEx pickup’. Who’s more likely to get the deal? What was actually lost by providing the information?

How about this:
For sale. One carat super-duper GIA ideal round in designer setting. Appraised for $20,000. Email bids to me and I’ll decide what to do. No phone calls please.

What will be the response? It’s the same stone and the same deal. This is going to get either no response at all (likely) or, at best it’s going to start a conversation designed to extract exactly what’s given up front in the first one. It’s going to end at the same price and you can make a deal or not as you wish but the dealer is NOT going to bid more because some appraiser said it’s worth a lot, and they are NOT going to give a blind bid without the details.

 

[diamondseeker2006]

Nice information, Neil, thank you!

I do have a general pricing question for you. Do you have any idea at all of the typical mark-up from wholesale prices? I have no idea if jewelers are making 5% profit or 30% profit. I realize some operate at a tighter margin than others, but I am thinking more of PS vendors.

 

[denverappraiser]

‘Wholesale’ is a tricky word in this business, as is the word ‘markup’. Most of the price competitive resellers of the virtual stones offered here are getting 10-15% or so for their work. Margin goes down as prices go up. Part of the deal here is that someone else is taking the risk and expenses of inventory. That is to say, there’s some supplier who has offered their goods for sale and the dealers are offering them for sale with a commission. They have very low risks. THAT guy is going to be wanting something like 25% for his part before he/she lays cash on the table. This too goes down at the high end and up at the low end although the high end gets into cash flow issues as well. Most people don’t have $100k sitting around waiting for someone to offer them the right thing. In terms of buying from the public, there’s also routinely repair costs, lab fees and similar expenses that get factored in. It gets further complicated by the fashion component. A dealer considering taking a J/I1 heart into stock is going to expect to own it for a long time before the final buyer comes along whereas a GIA/SI/F-H/xxx/1.0-2.0 is going to be able to move it out the door more quickly and is likely to be willing to own it for a lower margin.

So, as an example:
Not so long ago I examined a stone that was a 6.xx round, very spready make from the 80’s with a major chip out of it. I estimated it as L SI1 material and the recut potential for 4.25cts. In nearly every market, that’s a bit of a dog, but it’s a BIG dog. Not surprisingly, the client was having a tough time selling it. Discount retail (PS sort of prices) on a 4.25/L/SI1 of less than fabulous cut will be about $25-30k (and killer cut L’s are tough sells by the way so it will almost certainly be cut for weight). 10% will go to the selling dealer. Cutting fees on a job like this are about $1000. The lab is another $500 so when it moves at the end the dealer can expect $21,000 to maybe $24,000 depending on how things actually work out. It’s not the easiest thing in the world to sell but it’ll go. She shopped it around pretty hard and got bids ranging from $13k to $19k. FWIW, she had an appraisal saying it was an I1 because of the chip (generous but basically correct) and that the ‘insurance’ value was upwards of $70,000 (also not unreasonable given the grade). In some sense that means that the markup here was huge. On the other hand, the buyer at $19k, who actually did end up with the stone by the way, quite possibly overpaid. A rather small hickup, like an M color or a 3.9x weight and he's going to lose money.

 

[diamondseeker2006]

Wow, very interesting! Thanks so much!

 

[Rockdiamond]

Useful thread Neil!!
Can you post a link to the listings themselves?

My personal experience is that selling a diamond is a daunting experience for a lot of consumers that own stones, and want or need to sell.
Usually, a sign proclaiming "Highest prices paid!!" will result in the opposite.
Re: wholesale versus retail- as Neil mentioned these are not "calibrated" terms
Take a given diamond that may be on the PS database for $10k.
Let's say the cutter wants $9k for it.
If it was in a high end retail store, it might go for $15k
On Craig's list? Maybe $6k
What would the average business holding cash for the purpose of buying diamonds from consumers pay?
Probably $4k

It really is a huge spread. But it's important to remember as a buyer what you get in each of these instances.
Imagine meeting someone from Craig's list with $6000 in your pocket.
Same for sellers- easy cash= lower price

 

[ruby59]

I can identify with what it is like to sell your diamond to a jewelry store advertising highest prices. I sold it locally, not to anyone affiliated with Pricescope.

My diamond did not have a GIA or EGL report. I did have a written appraisal from a third party appraiser, which was a "put together price." They stuck a wholesale diamond listing in front of me, and then quickly said those are prices they pay their wholesalers. It may sit for a long time, the economy is terrible, they are taking all the risks, yadda yadda.

Bottom line - my put together price was $14,600. Lack of a GIA report was a non factor because they agreed with the size, clarity and color of the diamond. Having a GIA report does not increase what they will pay you. They offered me $3,000 and begrudgingly brought it up to $3,500 because it was in a nice platinum setting.

 

[Rockdiamond]

I can identify with what it is like to sell your diamond to a jewelry store advertising highest prices. I sold it locally, not to anyone affiliated with Pricescope.

My diamond did not have a GIA or EGL report. I did have a written appraisal from a third party appraiser, which was a "put together price." They stuck a wholesale diamond listing in front of me, and then quickly said those are prices they pay their wholesalers. It may sit for a long time, the economy is terrible, they are taking all the risks, yadda yadda.

Bottom line - my put together price was $14,600. Lack of a GIA report was a non factor because they agreed with the size, clarity and color of the diamond. Having a GIA report does not increase what they will pay you. They offered me $3,000 and begrudgingly brought it up to $3,500 because it was in a nice platinum setting.

Ruby- first of all- I am sorry you were put through what sounds like a bad experience.

But I have to disagree with the part in italic.
Sellers are in a stronger position if the diamond has a GIA report.
If for no other reason than it's far more likely for legitimate buyers - generally the ones not advertising "Highest prices paid" -to show interest in a consumer's diamond.
Put another way- buyers that are looking to deliberately confuse consumer/sellers may not care about the presence of a GIA report.
But the same sellers that stress the importance of a GIA report in the way they market might pay more for nicely cut diamonds with GIA reports that the other type of buyer- and be less interested in stones with no GIA reports.

 

[Alexiszoe]

To Neil and David,

as a consumer I have questions about selling a diamond. We are interested in purchasing a GIA 4.5 to 5 carat H/I, SI round brilliant in the near future. However I always like to plan ahead and see what we can possibly get for it, if for whatever reason we need to sell it. Given that this market is (I assume) much smaller, should I assume that by selling to dealers I will be suffering a greater than 50% loss compared to Fair Market Value? What would be the best option to sell in this case given that this is a much smaller market?

 

[ruby59]

David, I can only go with my experience. I was told that having an original GIA report was a non factor because my diamond's clarity could have been lowered during the time I wore it. I kind of even thought out loud that maybe I should send it to GIA. From the impression I got, it would not have increased their offer. They looked over my diamond very carefully, and all that mattered to them was their assessment of it.

 

[Rockdiamond]

HI Alex,
In the case of a large, important diamond, I don't see a lot of choices for potential, safe buyers, other than a dealer.
If you were in the position of needing to sell outright, you'd need to shop for a buyer much the same way you'd shop for a seller.
Find someone you are comfortable with- that has an established reputation.
Of course it's better if you can find a place locally to purchase- but again, just like when you buy a big diamond, it might make sense to sell it to someone in a larger market, if you're located in a smaller town. That may involve shipping the diamond.

By the way, it's likely that consumers wanting to sell a diamond to purchase another can do best selling the old diamond to the place they're purchasing the new one from.
Kind of like trading in a car.

 

[Rockdiamond]

David, I can only go with my experience. I was told that having an original GIA report was a non factor because my diamond's clarity could have been lowered during the time I wore it. I kind of even thought out loud that maybe I should send it to GIA. From the impression I got, it would not have increased their offer. They looked over my diamond very carefully, and all that mattered to them was their assessment of it.

I got really angry reading about the way you were treated Ruby- I hate it when people in the trade behave this way.
I'm sure one part is true- they may not have offered more- but it certainly would have put you in a more informed position- and as a seller, that's where you really want to be.
What a load of bull about the clarity.
Sometimes diamonds do show wear- or abrasions- even chips- but all of this stuff can be repaired for a tiny percentage of value of we're speaking of a large diamond.
Wear DOES NOT CHANGE THE DIAMOND'S CLARITY on a permanent basis.
We've had Internally Flawless diamonds where GIA noted that there was a "chip"
The chip was microscopic, but did not prevent the IF grade.

 

[denverappraiser]

A 5 carat H/I SI GIA xxx is actually a pretty hot item but with ALL diamond purchases you can expect to take a haircut on resale. Do not buy diamonds expecting to see your money again. The problem is not with the diamond (in this case) but with the market and more generally, consumer expectations about how markets work. ‘Fair Market Value’ is more about ‘Market’ than about ‘Fair’. This applies to both when you are buying and when you’re selling. The dealer who sells to you is going to be making money. The dealer you sell to is going to be making money. The dealer HE sells to is going to be making money. Diamonds do better than most of the things you buy but they are NOT bank accounts. Buying is easy. Selling is hard. That applies to nearly everything by the way, not just diamonds.

 

[denverappraiser]

Major damage most definitely does change the clarity although I agree that it may not be permanent. Selling damaged stones takes imagination on the part of the buyer and, assuming they’re going to make a buck on the deal, it takes some skill. All sales channels lead to another consumer at the end and the vast majority of consumers don’t want to be buying damaged goods, at not unless there’s going to be a steep discount associated with it. That means that somebody is going to be dealing with the repairs. This may or may not be you but it’s going to affect both the price and the marketing strategy. In some cases, it can affect these pretty dramatically.

 

[Rockdiamond]

Neil- we need to define "major" damage.
I've seen stones that were basically destroyed in manufacture- or accidents when people wear them. Things like a gouge out of a stone.
If a person can easily see the damage, it's clearly going to have a large impact on value- and potentially clarity.
But far more common is what I've referred to as "wear"
I mean damage that is relatively simple to remedy. Abrasions. Chips on the girdle, either between the prongs or under a prong, or at the culet. I've never seen this second type of damage do permanent harm to a diamond's clarity.
There are cases where a minor repair or re-cut may actually be able to substantially increase the potential value of the diamond at retail level.
The trick for consumers needing to sell is figuring out how to get treated fairly.

What I see happening on a daily basis is more similar to Ruby's experience- where instead of explaining the reasoning about the value of a diamond in a consumer's hands, versus in a dealer's hands, the buyers insult or plant seeds of doubt in the victim's- I mean unfortunate consumer/ seller's mind.
Of course I'm jaded walking down 47th street- where no one is allowed to walk unfettered by offers to buy anything you've got to sell by massively aggressive hawkers.

But more and more, in speaking to retail jewelers outside NYC, they tell me that buying over the counter has become one of the main sources of income.
Even though consumers loose when buying and selling, rising prices still mean that consumers that need to sell may have a stronger hand than they might realize.

I'm sure people like Neil are busier and busier helping folks avoid some of the pitfalls in liquidation of valuable diamonds.

 

[oldminer]

If one compares what they have for sale to what is being offered by reliable vendors to the public on Pricescope by doing a retail search, common stones can be found in quantity that indicate the low end of the retail market. Most of these diamonds are reasonably well cut although there are a few bad ones and quite a few exceptionally well cut ones. You can use the GIA XXX as a filter to eliminate the less well cut types.

Obviously, dealers cannot and will not pay even low retail. Often naive consumers actually expect dealers to pay more than the retail prices in a Pricescope search. No amount of conversation gains their belief or dims their expectations. The only thing which proves that dealers cannot pay retail is that it is impossible to retail a diamond to a dealer. You may hear all sorts of high potential "offers", but reality comes to the front when it is time to agree on an exact amount and a check is to be written. That is where the BS ends and the value of the diamond in the secondary market is all the truth there is.

Depending on rarity, demand, cut quality, fluorescense, and several other factors beyond the 4 c's, a diamond may have a value of <20% to 60% of "retail". This is an extremely wide range and can't be further fine tuned on diamonds not examined by the buyer. Stones of 1ct and more might be said to have <35% to 60% of retail value in a cash deal. Some diamonds under a carat are those which will be <20% to 50% of retail. This is not a perfect description of the entire market, but an observational and general opinion about the differences usually found. There are definitely exceptions and the above is not even a "rule of thumb". It should be helpful to those who are curious about what the potential sales value to a dealer may be on the general run of diamonds, not those very few diamonds which for some special reason are exceptionally scarce or unusual. Keep in mind, that everyone thinks their diamond is "special" or "rare", but the truth is that few are. Few custom made settings are truly "made to order". Most are produced and modified or assembled from readily obtained components. The hyperbole of the original sales pitch generally makes the reality of selling a very challenging task for novice diamond sellers.

It is 100% easier to purchase a luxury item than it is to sell it. No matter what the product may be.

 

[Karl_K]

I really think a lot of this needs to be spelled out in a FAQ page for the service.
Some questions would be:
What happens to my diamond once the vendor receives it?

What if my diamond is found to have damage?

Any offer to buy they get is going to be based on it passing an evaluation once the vendor gets it and that needs to be spelled out.

 

[Rockdiamond]

I'd still really appreciate the link to see the actual listings if anyone knows where it is.

 

[Regular Guy]

I'd still really appreciate the link to see the actual listings if anyone knows where it is.

At the top, select:

Resources,

And then the 4th option down:

Sell your Diamonds.


Ira Z.

 

[denverappraiser]

I'd still really appreciate the link to see the actual listings if anyone knows where it is.

As far as I can tell there's not a browsable listing created. It sends an email to dealer subscribers. I've no idea what it costs to be one of the participants but I'm sure the admins will be happy to discuss it with you.

 

[denverappraiser]

I really think a lot of this needs to be spelled out in a FAQ page for the service.
Some questions would be:
What happens to my diamond once the vendor receives it?

What if my diamond is found to have damage?

Any offer to buy they get is going to be based on it passing an evaluation once the vendor gets it and that needs to be spelled out.

I agree but I can actually answer both of those questions.

Each deal is a private transaction between the seller and the potential buyer. The buyer can bid whatever they want and apply whatever terms and conditions they want. The seller, in turn, can agree or not as they wish and can make a counteroffer that may or may not be accepted by the buyer. There is no obligation on either party and PS isn't involved at all. If you can't come to an agreement, you keep your stone and they keep their money. Who pays for shipping is part of the negotiation.

I'm sure a misrepresentation by the seller about what they have, either intentional or not, will be grounds for a renegotiation with ANY buyer.

 

[Rockdiamond]

I think you're correct about the browsable part Neil.
Interesting- I certainly will subscribe- but I thought there was a consumer to consumer area as well.......

Consumer sellers really need to vet the potential buyer due to the issues of damage, and ease of transaction.
I suggest getting an agreement in writing that specifies your liabilities as a seller.
For example- agree upon a fee for shipping/handling if the diamond is not acceptable to the buyer in advance.
Ask specifically when and how payment will be made to you.

 

[denverappraiser]

Consumer to consumer sales is a MUCH more dicey proposition for both buyer and seller. There are sites out there that do this ranging form ebay to diamondbistro to craigslist and they certainly have their place but it's a very different sort of thing from what we're talking about here.

 

[maccers]

Could we get this thread stickied?

I think it will be a great reference thread for consumers.

 

[Rockdiamond]

I agree Neil- but there's a lot of folks who want to simplify the process by doing it themselves- and I thought there was a new consumer marketplace on PS..... but I guess I was wrong.

 

[marymm]

I agree Neil- but there's a lot of folks who want to simplify the process by doing it themselves- and I thought there was a new consumer marketplace on PS..... but I guess I was wrong.

I wonder if you are thinking about the Preloved PS Jewels Forum (under Pricescope Cafe menu tab), where PS members can post threads about their preloved gemstones/jewelry that are up for sale on other websites... from what I recall, these threads are to include a link to the item's for-sale listing - most typically the links take you to for-sale listings on diamondbistro or eBay.

 

[Rockdiamond]

I agree Neil- but there's a lot of folks who want to simplify the process by doing it themselves- and I thought there was a new consumer marketplace on PS..... but I guess I was wrong.

I wonder if you are thinking about the Preloved PS Jewels Forum (under Pricescope Cafe menu tab), where PS members can post threads about their preloved gemstones/jewelry that are up for sale on other websites... from what I recall, these threads are to include a link to the item's for-sale listing - most typically the links take you to for-sale listings on diamondbistro or eBay.

Thank you soooo much Mary!
I guess my three brain cells left alive are still working ( today)

 

[oldminer]

The sell a diamond form goes via email only to dealer-buyers vetted by Pricescope. An article written by Neil Beatty and myself and edited by Erika is anticipated to be published which further explains the nature of selling format. I believe it is like many other sites on the Internet where information might be gathered if someone wants to know what to expect if they decide to sell a diamond. Obviously, not every inquiry leads to a sale.