Trading a stone in? Do Jewelers give you paid value?

[find45di2]

I was curious to know how a jeweler would handle someone trying to upgrade a diamond IF it was no originally purchased from them? I am buying my diamond from a personal diamond seller who is willing to give me the full value of the paid diamond upon an upgrade, but am curious to know if other jewelers would also consider this?

I know that just about all stores you purchase from will promise that they will give you 100%, but I am not buying from a store so I am curious to know if it would be very difficult to get rid of the first diamond if it wasn''t purchased from the same place.

The Stone will be an Round EX stone with a GIA and is a superb stone. I doubt that I will be dealing with this anytime soon, but am curious to know what to expect if I ever decide I want to go this route.

Is it standard for a jeweler to give you the value of what the stone would be worth at that given time? Is this something that is not preferred and very hard to do? Curious to know how the process would work and if this is a very common thing, or if it is very rare and hard to upgrade with anyone.

Thoughts?

 

[Garry H (Cut Nut)]

Different folks do it differently.

In my B&M store we are happier to give more credit on our own stones, but we trade up others too. It depends very much on how much more you will contribute.
Double the ct wt = approx 4x the $$$

 

[stebbo]

Date: 9/8/2007 2:22:00 AM
Author:find45di2
I was curious to know how a jeweler would handle someone trying to upgrade a diamond IF it was no originally purchased from them? I am buying my diamond from a personal diamond seller who is willing to give me the full value of the paid diamond upon an upgrade, but am curious to know if other jewelers would also consider this?

I know that just about all stores you purchase from will promise that they will give you 100%, but I am not buying from a store so I am curious to know if it would be very difficult to get rid of the first diamond if it wasn't purchased from the same place.

The Stone will be an Round EX stone with a GIA and is a superb stone. I doubt that I will be dealing with this anytime soon, but am curious to know what to expect if I ever decide I want to go this route.

Is it standard for a jeweler to give you the value of what the stone would be worth at that given time? Is this something that is not preferred and very hard to do? Curious to know how the process would work and if this is a very common thing, or if it is very rare and hard to upgrade with anyone.

Thoughts?

Upgrading is not the hard bit (James Allen for one will even buy an AGS or GIA diamond over a 0.5 carat outright, without an upgrade), it's how happy you'll be with effective trade-in value. Needless to say, that depends on what you're upgrading to and your old stone can be sold for. It also depends on whether it needs repolishing, a new crisp lab report and whether the vendor discloses that it's a preowned diamond or not (preowned diamonds commonly = divorce or financial struggles = bad omen

)

Just remember that these 100% trade-up deals can be made available not only because of the profit in the new sale but the extra customers the deal initially attracted as well.

 

[denverappraiser]

The dealers are in this to make a buck (of course) and how hard that is to do depends on what you have, how much you paid for it, what you are buying and how much they get to charge for the new one. Some of this, like what you paid and whether you have something that’s likely to do well in their store is completely out of their control so it makes no sense to have a blanket rule of trading in everything unless the price they are charging for the new piece is so high that it doesn’t really matter. A lot of dealers will be happy to work with you as long as they can put a deal together that benefits both sides as well as the new buyer for the one you’re trading in but remember that if you paid too much or made a silly purchase in the first place, this is your fault not theirs.

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

 

[stebbo]

Date: 9/8/2007 8:30:32 AM
Author: denverappraiser

.... but remember that if you paid too much or made a silly purchase in the first place, this is your fault not theirs.

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

I think find45di2 never hoped that he/she might get back the original purchase price, rather it's current (retail I guess) market value.

Interesting what you say about the 'blanket rule' Neil - I would have thought refusing to buy a stone would be more about upholding quality standards than a profitability issue, as the offer just has to be made low enough to satisfy the latter.

 

[denverappraiser]

A lot of stores simply refuse to buy from the public so I guess that would qualify as a ‘blanket rule’ but this is for some complicated reasons. For starters, buying well requires more skill on the part of the worker than selling. The buyer is putting money on the table and they better be good at grading stones, evaluating damage and predicting what is going to sell well for them. This skill set takes a lot of time to develop and many jewelry store workers know little more than what’s written on the price tag. A store would be nuts to trust them with the checkbook. It also tends to be hard on their reputation. If they offer $1000 for an item that the customer thinks is ‘worth’ $4000, they end up with a customer out there who thinks they’re a bunch of crooks. Keeping the buying and selling channels separate is simply easier and less risky to do. On the other hand, buying from the public is where the biggest profits are being made in diamonds these days.

Quality standards are certainly a piece of it. Not every store does well with all merchandise and they need to buy things that are appropriate for their own market.

Many people have the impression that their jewelry is something of a bank account and that they can make deposits and withdrawals through this process of trading up and reselling. Lots of jewelers go out of their way to encourage this idea and it’s almost always incorrect.

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

 

[stebbo]

Date: 9/8/2007 9:34:01 AM
Author: denverappraiser
A lot of stores simply refuse to buy from the public so I guess that would qualify as a ‘blanket rule’ but this is for some complicated reasons. For starters, buying well requires more skill on the part of the worker than selling. The buyer is putting money on the table and they better be good at grading stones, evaluating damage and predicting what is going to sell well for them. This skill set takes a lot of time to develop and many jewelry store workers know little more than what’s written on the price tag. A store would be nuts to trust them with the checkbook. It also tends to be hard on their reputation. If they offer $1000 for an item that the customer thinks is ‘worth’ $4000, they end up with a customer out there who thinks they’re a bunch of crooks. Keeping the buying and selling channels separate is simply easier and less risky to do. On the other hand, buying from the public is where the biggest profits are being made in diamonds these days.

Makes a lot of sense.

 

[diamondseeker2006]

The answer is that you are very likely to lose money if you upgrade elsewhere. No jeweler will give you current retail value of the stone. Maybe they will give you current wholesale. So if you trade the diamond in the near future, you''re likely to lose money. I''d only buy from someone I expect will be in business in the future who will give me 100% of my purchase price toward an upgrade. Does your personal diamond seller have a written policy that you can depend on?

 

[find45di2]

Thanks for the replies everyone.

So I guess what I expected is probably what is true...they will try to give you wholesale value or maybe what you paid depending on what you are upgrading too.

I considered buying from a store but everything I saw was not as clean as what this guy showed me. Not to mention that if you want a super nice stone at the store they are usually E or F VS1''s. I was looking for something in the G and H range, and a very clean SI1. So in the retail world, that was extremely hard to find. This guy took the time to educate me, showed me his own stones, and brought in some stones. I ended up liking one which he owned, and one he brought in from another seller. He agreed the stone that he brought in was a nicer choice for all of the dimensional reasons on paper, but to the eye there wasn''t a huge difference. So what I am saying is that he didn''t pressure me to buy his stone versus another.

I will have to request an upgrade guarantee in writing, but I think this person is honest. The only risk is that he may not be selling diamonds anymore.

Guess I can always buy a match and turn them into some really nice earrings if nobody wants to allow a trade in jk

 

[denverappraiser]

It sounds like a good jeweler who is treating you right. That's worth a lot.

Most stores will pay LESS than wholesale for trade-in’s. Those who are accustomed to my writing will notice that I rarely use the word ‘wholesale’ because it’s such a slippery term that's so often misunderstood. In this case, what I mean is the price that they would expect to pay to their regular vendors for comparable goods in the ordinary course of business.

The reason to pay you less than that is fairly simple. All jewelers have a supply chain that they buy goods from and their usual supplier offers some added value to them beyond just providing the merchandise. They can get stones on consignment to show to customers, they can get extended payment terms if needed, they can trade in things themselves if they aren’t selling well or they may just like the sales people. Some supply advertising support for the brands or just free coffee cups and swag for the staff and often a deal can be done in a 30 second phone call because of the pre-established relationship. Each supplier firm will have a different program and they’re very competitive with one another. This competition often happens in areas other than the price (rather like the same thing happens at retail) and a store will have a short list of regulars that they call on when they need something. A good supplier firm sees things as very much a partnership with the jeweler and this goes both ways. For long term success to happen they need each other. Buying off the street is usually a cash deal with no recourse if they have a problem. It often requires minor repair work be done and it often requires sending the stone to the lab to get new documentation. They have to take it into inventory before they have a sale lined up so they are tying up their working capital and if it sells slower than expected this can turn into a fairly serious problem. All of this takes time, and as the saying goes, time is money. The reason to put up with all of this is that the prices are better this way, sometimes quite a bit better. I talk about buying from the public because that’s what taking a tradein that you didn’t sell is doing. It’s a purchase and a sale combined. Done right there’s profit to be had on both sides but, in the end, they are buying your tradein and you can bet that they’re doing the math even if you aren’t.

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