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Secondary market diamond prices

MissStepcut

Brilliant_Rock
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I have a pet peeve: when shopping on the secondary market: when a seller's listing exclaims that 30% off of retail is some sort of crazy steal, it really turns me off. Especially when the seller is a Pricescoper... I KNOW that you KNOW that selling your diamond for 30% less than a retail one would be a great deal... for you!

But then I got to thinking... with diamond prices so out of control lately, do you think sellers might be able to demand higher prices, as more people look for some price relief in the secondary market? An increase in buyers in the market might bring prices up relative to retail prices. Or will the insecurity and intangibles of the primary market stop people from taking the chance?
 

Haven

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Feb 15, 2007
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These are really good questions.

I've always wondered WHY the secondary market is so much lower for diamonds than retail cost. I understand (and appreciate!) the benefits that come with purchasing my stone from a jeweler, but I don't understand why the price goes down SO VERY MUCH when a diamond is sold by an individual. I don't think the difference is as great as with cars, for example, or other large items. What gives? Why do diamonds command so much more when sold by a jeweler or other retailer, anyway?
 

Circe

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I think that traditionally, there are two reasons for the pricing discrepancy.

1) the background factor where people worry it it being a stone of divorce, a dead person's, something that might otherwise tarnish their image of a diamond being forever starting with them.

2) the lower degree of trust you have in a private seller, and the decreased options. You buy your diamond from Joe's Diamonds on Main Street, well ... Joe's been there for years, if you discover it appraised lower or want to upgrade or chip it or whatever, Joe's your man! Also, Joe can get you a D or a J or a whatever for minimal effort on your part. Joe Private Citizen selling the diamond from his broken engagement, on the other hand? For all you know, he's leaving town, or a scammer: at any rate, under no circumstances is he going to be of assistance if you have an issue a year or two down the line.

I feel like both of these are spurious reasons. De Beers had a lot invested in convincing people that their diamonds were so emotionally significant that selling them, ever, would be a scandal and a hissing: it kept the market from flooding with second-hand goods by stigmatizing that market.

Now that there's no longer a tight monopoly, AND diamond prices are rising (not to mention the internet and the fact that people are buying from people they "know" like they know them from here on The Place That Must Not Be Named, or if their PS name and their eBay name is the same, if they pay through PayPal or have some other consumer protection). I think it's going to be an interesting couple of years for buyers and sellers alike ....
 

MissStepcut

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Circe, if you found a diamond on the secondary market that was within the range of what you were shopping for (since it's only a deal if it's what you really wanted!) how much reduced from James Allen/WhiteFlash/GOG would it have to be before you would choose to just do business with the retailer instead of the private party?
 

lyra

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I agree with Circe. I've seen a steep rise in the secondary market, but it has been a consistent rise over the last year, not all of a sudden. I think some people are trying to maximize their profit, but agree also that 30% off retail is no bargain by any means. I only expect to pay around 50% of retail if that. I can wait it out though. I'm not going to buy anything at these inflated prices. The secondary market inflation will play out eventually. People won't be able to sell at high prices. When it approaches retail, most people would just as soon buy retail and have perhaps an upgrade policy, return policy and all that comes with a smooth retail transaction.
 

kelpie

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I have noticed the secondary market prices are more like retail prices from 18months ago...but I mostly look at bids on no reserve auctions so it's clearly buyer driven!
 

kenny

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Prices adjust to what the market will bear.
Nobody is being a meanie.
It's just business.

When retail prices go up used prices will go up too.
Sure it sucks, but so does death and taxes.
Stuff just IS.
I do not understand why listing a diamond for a pretty fairly widely agreed to standard of 70% of retail would make someone resent seller.

I CAN certainly understand disappointment that prices for all diamonds have gone up so much.
But I don't blame Whiteflash or GOG, why should I hold it against the seller of a used diamond?

So you think sellers have some ethical or etiquette-related obligation to sell for 70% (or less) of what they paid long ago?
Do you also feel this way about real estate, gold or stocks?
Stuff is worth what it is worth today; yesteryear's price is not relevant.
So membership in the PS club means sellers should lose money, to be nice?
Wouldn't that be not very nice to the seller?

If you think 30% below todays retail is too high, then just don't buy.
If nobody buys it for a long enough time the seller may lower the price, or not if that diamond IS worth 70% of retail to today's seller.

Frankly, I'd be celebrating if I could buy anything that's as good as new for a 30% discount.
IMHO, expecting niceness to enter into business transactions is not realistic for either side.
I often hear about someone upset because they got "ripped off".
Unless the seller held a gun nobody forced the buyer to buy at any price.
Just do your homework, make a decision and take responsibility for it.
 

Dancing Fire

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32,399
MissStepcut|1314376266|3000349 said:
I have a pet peeve: when shopping on the secondary market: when a seller's listing exclaims that 30% off of retail is some sort of crazy steal, it really turns me off. Especially when the seller is a Pricescoper... I KNOW that you KNOW that selling your diamond for 30% less than a retail one would be a great deal... for you!

But then I got to thinking... with diamond prices so out of control lately, do you think sellers might be able to demand higher prices, as more people look for some price relief in the secondary market? An increase in buyers in the market might bring prices up relative to retail prices. Or will the insecurity and intangibles of the primary market stop people from taking the chance?
how do you know she is a PSer?
 

lyra

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I see your points Kenny. When I speak of "retail" I mean B&M store retail, not internet PS vendor retail. I acknowledge that these are 2 different markets as well. So 30% of regular retail is not a bargain to *me*, and that's just an individual thing. Regular retail mark-up is very high. I do not think anyone is being mean by asking any price they want to sell their stuff. They will get whatever the market will bear, as you say. (They might not get it from *me*, but that's not important.) ;))
 

Circe

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MissStepcut|1314378203|3000377 said:
Circe, if you found a diamond on the secondary market that was within the range of what you were shopping for (since it's only a deal if it's what you really wanted!) how much reduced from James Allen/WhiteFlash/GOG would it have to be before you would choose to just do business with the retailer instead of the private party?
Honestly? Savings are savings. Since I'm not really an "upgrader" as such (I tend to hoard, which means that whatever I buy, I KEEP!), if it was exactly what I wanted, I'd buy from a trusty second-hand source even if it was only a savings of 10% or 20%.

So, you know, if you see an 8.4 mm OEC with strong blue fluor, color variable, floating around out there for a negligible discount, point me in the right direction!

More realistically speaking, though, I find that is the greater incentive to shop with a good retailer: to find exactly what you want is like a needle in a haystack. I collect eternity bands, so I periodically stumble across this or that in vaguely-enough my size at good enough savings that it's worth me gambling (like, with the last purchase - I wasn't planning on getting a thumb ring, but when it popped up and called my name ... it had to be). But when I knew I wanted studs last year, and I knew I wanted blue fluor? It just wasn't worth waiting a year or three for them to come around, even if I would have saved another grand or two. Depends on how picky you are and how much you trust the seller, I think ....
 

kenny

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lyra|1314379821|3000424 said:
I see your points Kenny. When I speak of "retail" I mean B&M store retail, not internet PS vendor retail. I acknowledge that these are 2 different markets as well. So 30% of regular retail is not a bargain to *me*, and that's just an individual thing. Regular retail mark-up is very high. I do not think anyone is being mean by asking any price they want to sell their stuff. They will get whatever the market will bear, as you say. (They might not get it from *me*, but that's not important.) ;))
Let's say some guy in love doesn't bother researching or negotiating and buys a diamond for the full sticker price of $10,000 at a B&M with no return policy and let's also say the equivalent diamond would be $7,000 at Whiteflash.
Let's also say she turned him down and next day the sad guy list it for sale at $7,000.
Informed PSers will not buy it.
But the less-informed may feel just fine about the price.

As with many products, especially Steinway pianos, there are two markets, the informed market and the uninformed market.
Just because the informed person would only pay $7,000 for a certain old Steinway does not mean people won't line up to pay 2 or 3 times that.
In cases like this I don't think the people paying $7,000 for that used B&M diamond or $20,000 for that old Steinway ARE getting ripped off.
As we often hear from appraisers values are not absolute; they vary.

Additionally, if a PSer buys that $7,000 diamond from WF, she says No after the 10-day return period, and he lists it the next day for $7,000 I see no ethical issue here.
If, you buy wisely and a market will bear that price, why not try to get it?
Sure PSers are not going to buy it but plenty of buyers are not PSers.
 

lyra

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But Kenny...I think we are in agreement, so I'm not understanding the argument. :bigsmile: I don't disagree with anything you've said. I only said I'm not sure I personally would pay, but like Circe said, if it was something that I had been specifically looking for, then yes, I`d pay whatever the price was listed at.
 

MissStepcut

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Jun 29, 2011
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kenny|1314379195|3000408 said:
Prices adjust to what the market will bear.
Nobody is being a meanie.
It's just business.

When retail prices go up used prices will go up too.
Sure it sucks, but so does death and taxes.
Stuff just IS.
I do not understand why listing a diamond for a pretty fairly widely agreed to standard of 70% of retail would make someone resent seller.

I CAN certainly understand disappointment that prices for all diamonds have gone up so much.
But I don't blame Whiteflash or GOG, why should I hold it against the seller of a used diamond?

So you think sellers have some ethical or etiquette-related obligation to sell for 70% (or less) of what they paid long ago?
Do you also feel this way about real estate, gold or stocks?
Stuff is worth what it is worth today; yesteryear's price is not relevant.
So membership in the PS club means sellers should lose money, to be nice?
Wouldn't that be not very nice to the seller?

If you think 30% below todays retail is too high, then just don't buy.
If nobody buys it for a long enough time the seller may lower the price, or not if that diamond IS worth 70% of retail to today's seller.

Frankly, I'd be celebrating if I could buy anything that's as good as new for a 30% discount.
IMHO, expecting niceness to enter into business transactions is not realistic for either side.
I often hear about someone upset because they got "ripped off".
Unless the seller held a gun nobody forced the buyer to buy at any price.
Just do your homework, make a decision and take responsibility for it.
I don't think it's being "mean" (and I don't know why you are mischaracterizing my post like that), I think it's being less than forthright. Since when is 70% of retail the "standard"? I don't pay that, and won't. 40%-60% of the next best retail price is what I expect to pay, and am willing to pay. I do resent people for misleading advertising. It makes me distrustful of them. It's not that I think 70% of today's retail is too high, in and of itself, it's that I think it is NOT a bargain or a even fair price on the secondary market.

Now, I acknowledge that changes in the market may also force me to change my math... which is why I started the thread.
 

Circe

Ideal_Rock
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8,087
MissStepcut|1314380784|3000445 said:
kenny|1314379195|3000408 said:
Prices adjust to what the market will bear.
Nobody is being a meanie.
It's just business.

When retail prices go up used prices will go up too.
Sure it sucks, but so does death and taxes.
Stuff just IS.
I do not understand why listing a diamond for a pretty fairly widely agreed to standard of 70% of retail would make someone resent seller.

I CAN certainly understand disappointment that prices for all diamonds have gone up so much.
But I don't blame Whiteflash or GOG, why should I hold it against the seller of a used diamond?

So you think sellers have some ethical or etiquette-related obligation to sell for 70% (or less) of what they paid long ago?
Do you also feel this way about real estate, gold or stocks?
Stuff is worth what it is worth today; yesteryear's price is not relevant.
So membership in the PS club means sellers should lose money, to be nice?
Wouldn't that be not very nice to the seller?

If you think 30% below todays retail is too high, then just don't buy.
If nobody buys it for a long enough time the seller may lower the price, or not if that diamond IS worth 70% of retail to today's seller.

Frankly, I'd be celebrating if I could buy anything that's as good as new for a 30% discount.
IMHO, expecting niceness to enter into business transactions is not realistic for either side.
I often hear about someone upset because they got "ripped off".
Unless the seller held a gun nobody forced the buyer to buy at any price.
Just do your homework, make a decision and take responsibility for it.
I don't think it's being "mean" (and I don't know why you are mischaracterizing my post like that), I think it's being less than forthright. Since when is 70% of retail the "standard"? I don't pay that, and won't. 40%-60% of the next best retail price is what I expect to pay, and am willing to pay. I do resent people for misleading advertising. It makes me distrustful of them. It's not that I think 70% of today's retail is too high, in and of itself, it's that I think it is NOT a bargain or a even fair price on the secondary market.

Now, I acknowledge that changes in the market may also force me to change my math... which is why I started the thread.
In a case like this, specifically, I don't know if I'd see it as misrepresentation unless the wording was really specific: I mean, 30% off retail is a deal ... compared to retail. Compared to the rest of the secondhand market? Not so much. But while it's not an apples-to-apples comparison, it's not egregious misinformation: while I might or might not buy from them (hey, if you get a sketchy feeling from the transaction for whatever reason, trust your gut!), I wouldn't necessarily put a black mark by their name in perpetuity.

On Kenny's tangent, though ... I will say, I've seen a couple of threads recently (not this one! just a general observation) where people have been bemoaning Those Greedy Jewelers, whether it be on Etsy or PS vendors or what have you. Dudes, the price hikes are hurting the jewelers more than they're hurting us! Their raw materials are through the roof, people are buying less as a result, and the only place where there's any give at all is on what they charge for labor. Hate the game, not the player - or, rather, hate the enormous distributors, not the small-fry artisans.

/end rant/
 

kenny

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MissStepcut|1314380784|3000445 said:
I don't think it's being "mean" (and I don't know why you are mischaracterizing my post like that), I think it's being less than forthright. Since when is 70% of retail the "standard"? I don't pay that, and won't. 40%-60% of the next best retail price is what I expect to pay, and am willing to pay. I do resent people for misleading advertising. It makes me distrustful of them. It's not that I think 70% of today's retail is too high, in and of itself, it's that I think it is NOT a bargain or a even fair price on the secondary market.

Now, I acknowledge that changes in the market may also force me to change my math... which is why I started the thread.
Okay, not mean, less than forthright then.

I offer that expecting sellers to be forthright in sales of used goods will lead to disappointment.
Rather, expecting buyer beware and whatever the market will bear does not lead to disappointment.

The onus is on the buyer to do his/her homework and decide on what they'll pay.
Your comfort zone is 40% to 60% of today's retail. (BTW if you have no way of knowing which store the diamond came from do you use Tiffany's or James Allen's retail?)

If someone lists something higher than your comfort zone, then just don't buy.
Someone else may, and IMHO that's fine.
People vary.

Seven years ago a casino bought a decade-old toasted cheese sandwich with the Virgin Mary on it for $28,000.
http://news.bbc.co.uk/2/hi/4034787.stm
I wouldn't have paid one penny, but people's perception of value varies.
Nobody's wrong.
Nobody got ripped off.
IMHO, ALL prices paid for anything when when no gun is involved are "fair".
You have every right to do so but IMHO are in for a lot of disappointment if expect the world of sales to play by what you consider to be "forthright" rules.
Don't change on my behalf, but your perspective is at odds with the fundamental realities of commerce.
Business is business and both sides want the best deal for themselves, and the idea that one price if fair (or even a price range) has no part because each side can't help but determine what is "fair" to their benefit.
 

MissStepcut

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@Circe: I might still do business with a seller who uses language like that, but trust is a fragile thing, and it would definitely make me more cautious in my dealings with that person. I am not saying a person who says their goods at a modest discount is a "great deal" is a scammer, just that it turns me off. I would be far more likely to enter negotiations with a seller selling the same thing at the same price if they stuck to the facts (cost of a comparable stone, current gold prices, etc).

@ Kenny, I use James Allen, Blue Nile and other online retailers as my "comp" price. You're right that you can sell whatever you want at whatever the market will bear, but many of these peices being offered at high prices sit around cluttering up sales forums for months and even years, so it would appear the market won't bear out the price in many instances.
 

centralsquare

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The secondary market just isn't very developed or at least centralized. Seems there are a few known, reputable vendors that offer second hand items as part of their offering. But it takes a lot of leg work and know-how identify secondary vendors, sift through the rubble, and find (and know what is) the "gem" so to speak. As long as those barriers are there, prices will be lower in the secondary market.

It's interesting to look at cars. Since the secondary market really was beefed up with vehix, carfax, and "certified pre-owned dealers" there are less deals to be had. So, in my opinon, I like a fragmented secondary market because we on PS have the power to find the good deals.
 

JewelFreak

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Calling an item a "great deal" sounds like somebody imitating tv ads, not trying to misrepresent anything. Got to come up with some eye-catching headline. To the seller, who probably paid a lot more for the stone, maybe it looks like a great deal -- it's the same diamond he bought last week or last decade but he's losing money on it. To him, the buyer's getting a bargain.

Kenny's right that any item's value is only what someone is willing to pay for it, no more. What intrinsic value does, say, a classic comic book have? 10 pgs of faded musty paper, but some will pay thousands of bucks for it. Perception is everything. Nothing wrong with trying for the most you can get; if it doesn't move, you drop your price. Any time, but especially in the secondary market, it's up to the buyer (assuming the seller isn't deliberately lying about facts) to do due diligence in order not to be disappointed.

--- Laurie
 

MissStepcut

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I feel like people are missing the nuance in my criticism. I don't think anyone is lying. I do think they're being less than forthright and also trying to exploit uninformed consumers. Think about our most beloved PS dealers: we all value honesty and transparency. Of course you should do your due diligence, but don't we all have the most respect for vendors that are the most honest, have the most representative photos, etc, etc? And if a vendor represented a product in a way that might be technically true in some contexts, but also not a totally forthright representation of the circumstances, wouldn't you feel less warmly about that vendor? Obviously anyone is entitled to seek any price they want to try to get, but the way they frame the basis for the price can make me trust them less. Am I really the only one who feels this way?
 

lyra

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You're talking about a specific case I guess, and for the life of me, I can't find it even though I *think* I know where to look. So I can't form any opinion on the wording of an ad. On the other hand, just generally speaking, I don't trust what any ad says, on the secondary market. I think sometimes there's only about 10% truth out there. ;)) I've seen things blatantly misrepresented. I just pass. I guess you'd have to be more forthcoming on what was "said" to get the opinions you're hoping to find.
 

MissStepcut

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lyra|1314407040|3001020 said:
You're talking about a specific case I guess, and for the life of me, I can't find it even though I *think* I know where to look. So I can't form any opinion on the wording of an ad. On the other hand, just generally speaking, I don't trust what any ad says, on the secondary market. I think sometimes there's only about 10% truth out there. ;)) I've seen things blatantly misrepresented. I just pass. I guess you'd have to be more forthcoming on what was "said" to get the opinions you're hoping to find.
I see it often, so it's not really a specific instance. But, you know, I am not looking for a certain opinion, I just thought more people would have thought the same thing!
 
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