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What do you think my trade-in should be worth?

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ddcha

Shiny_Rock
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Mar 25, 2009
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Maybe it''s a sign of the economic times, but most folks I''ve talked to will entertain a trade-in for my stone. thank you.

EGL report states:
weight: 1.03ct
shape: round brilliant cut
measurements: 6.57x6.53x3.95
depth: 60.3%
table: 57%
crown height: 15%
pavilion depth: 43%
girdle thickness: thin to medium faceted
finish: excellent
clarity: VS1
color: F
photoluminescence: none
comment: ideal cut

Appraiser (D.G. GIA) says:
weight: 1.04ct
color: F
clarity: VS2
measurements:6.52x6.56x3.94
 

neatfreak

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Honestly that is a very unusual thing around here so I would just shop it around to different vendors and see what they will pay. It''s worth what someone will pay for it!
 

ddcha

Shiny_Rock
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Messages
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true, but there is the intrinsic value vs. the current market value, which may fluctuate, right? EGL cert warrants a discount I know. But I always figured that a 1ct round had a very broad audience...
 

Lorelei

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Date: 3/27/2009 2:26:04 PM
Author: ddcha
true, but there is the intrinsic value vs. the current market value, which may fluctuate, right? EGL cert warrants a discount I know. But I always figured that a 1ct round had a very broad audience...
It is usual even with GIA graded diamonds to only recoup around 30- 50% of what you originally paid for it - regardless of size, EGL less than that, so as Neat says if you get a vendor who will even consider taking it then see what the best offer is.
 

ddcha

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Date: 3/27/2009 2:32:45 PM
Author: Lorelei
Date: 3/27/2009 2:26:04 PM

Author: ddcha

true, but there is the intrinsic value vs. the current market value, which may fluctuate, right? EGL cert warrants a discount I know. But I always figured that a 1ct round had a very broad audience...
It is usual even with GIA graded diamonds to only recoup around 30- 50% of what you originally paid for it - regardless of size, EGL less than that, so as Neat says if you get a vendor who will even consider taking it then see what the best offer is.
What does the price I paid 7 years ago for the diamond have to do with what it is worth today? Forgive me because I''m a simple finance guy. I have an asset that was purchased 7 years ago. Market values for my asset have risen over those 7 years. But my asset is worth 30-50% of what I paid for it because it is used? This isn''t a wear and tear item that depreciates over time, right? I just have trouble understanding this. please educate me on how this all fits together. thanks.
 

Lorelei

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Date: 3/27/2009 2:42:32 PM
Author: ddcha


Date: 3/27/2009 2:32:45 PM
Author: Lorelei


Date: 3/27/2009 2:26:04 PM

Author: ddcha

true, but there is the intrinsic value vs. the current market value, which may fluctuate, right? EGL cert warrants a discount I know. But I always figured that a 1ct round had a very broad audience...
It is usual even with GIA graded diamonds to only recoup around 30- 50% of what you originally paid for it - regardless of size, EGL less than that, so as Neat says if you get a vendor who will even consider taking it then see what the best offer is.
What does the price I paid 7 years ago for the diamond have to do with what it is worth today? Forgive me because I'm a simple finance guy. I have an asset that was purchased 7 years ago. Market values for my asset have risen over those 7 years. But my asset is worth 30-50% of what I paid for it because it is used? This isn't a wear and tear item that depreciates over time, right? I just have trouble understanding this. please educate me on how this all fits together. thanks.

Probably the best thing I can do is show you Neil Beaty's article on reselling diamonds, it should give you the info you are looking for,

http://journal.pricescope.com/Articles/66/1/A-consumer%e2%80%99s-guide-to-reselling-diamonds.aspx

This page on pricing is pertinent...


Pricing.
Not surprisingly, everyone wants top dollar and almost everyone has unrealistic expectations about prices. To some extent this comes from how much people paid and what they were told during the original sales presentation and to some extent it comes from ‘appraisals’ that report things as being enormously valuable. A reality check is essential. Thanks to the Internet, it’s easier than ever to work this out, at least with diamonds. For starters, with the exception of certain designer and antique items, your resale price is almost always going to be based on the materials, not the craftsmanship or design of the mounting, and the major item on the materials is that center diamond. As with many of the issues above, it’s essential to know what you have before you can sensibly set your prices and the easiest way to get this is to hire YOUR OWN expert grader. When you’re confident that you know the grading details of your stone, use the ‘Pricescope your diamond’ engine to search the database here for comparable offers. What you’ll see is your competition. Usually there are dozens to hundreds of superficially similar stones being offered by the dealers here and usually the range of prices will be a factor of 2 or so. Choosing the right one as ‘comparable’ can be a little tricky but here’s an approach.


Start by searching for the same shape/clarity/color and a size range of a few points around yours being careful about crossing over a critical weight barrier like 1.00cts. or 2.00cts. If there’s only one or two results, make a bigger size range and if there’s more than a few hundred results make the range smaller. You can sort the list by price by clicking on the column header to the price column. Scan the list for comparables. Make sure to pay attention to the lab doing the grading and to the cutting. If you’ve got a GIA, look for GIA’s, if you’ve got an IGI, look for an IGI,etc. Don’t forget the cut grading. If you don’t have it, don’t assume it’s‘Ideal’ or even ‘Excellent’. You can be sure your prospective buyers won’t. Assume‘good’ unless you’ve got some reason to believe otherwise. If you’ve got a fairly ‘standard’ sort of stone, this should zero you in on a price from your aggressive dealer competitors to within about 15%.



If you’re selling to a dealer, expect to see about 40% - 75% of that price. Popular things, like 1.00/VS1/G/GIA/XXX are going to sell easier and for a higher percentage than the things they will expect to need to own for a while before they can find a it new owner, like a 2.85/VVS2/K/IGI/Marquise. It doesn’t matter what you paid, and it doesn’t matter what the selling jeweler/appraiser said the ‘retail’ value is.



Pricescope is a pretty price competitive place and a lot of consignment dealers can get higher prices than the dealers here. They’ll be selling for anywhere from matching these prices to 50% above, again depending on what you have but also depending on the nature of their store. Commissions will range from 15% up to as much as 50%. A quick note on consignment pricing. It isn’t always best to go with the dealer who charges the lowest commission and/or the one who asks the highest prices. ASKING a lot isn’t the same as GETTING it. By all means if you’ve got a dealer who can get top prices and is willing to do it cheaply, go for it, but these two things rarely go hand in hand.



Direct retail sale prices will be somewhere between the above two depending on your own selling skills, what you have and just plain luck. If your buyer can get it cheaper from a ‘real’ dealer, they almost certainly will prefer to do it that way and if you can sell it for more to a pro then there’s no reason for you to go through the brain damage of dealing with a retail buyer.



 

purrfectpear

Ideal_Rock
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1. Diamonds are not an investment. Similar to a new car, they "depreciate" the moment they leave the retail store.

2. An EGL 1.05, F, VS1 currently retails for $5200. The resale value is closer to $3000.
 

Lorelei

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Just purely as an example, I found an EGL graded diamond similar to yours, weight, colour, 1 clarity grade lower and cut quality for $4400 roughly. This is what comparable diamonds are selling for at this moment from online vendors, as I said before diamonds are not good investments and it is extremely rare to sell at even close to what you paid, let alone make any money. Working on Neil's advice of a dealer giving you around 40 - 75% of what you paid using the above figure as an example ( this being based on GIA graded diamonds which will command a higher value than EGL) so I am working on 40%, then you are looking in the region of less than 2k. I am just basing the above as an example only, not in any way suggesting any real value for your diamond.
 

ddcha

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Date: 3/27/2009 2:52:20 PM
Author: purrfectpear
1. Diamonds are not an investment. Similar to a new car, they ''depreciate'' the moment they leave the retail store.


2. An EGL 1.05, F, VS1 currently retails for $5200. The resale value is closer to $3000.
The article above is helpful in describing to me "this is the way it is", but without explaining to me why this is the way it is. A diamond is a non-perishable scarce commodity in my mind. Very different from a car. I tend to view a diamond like I would look at a bar of gold. Or even a house. or plot of land. I guess the retail markup and margin is simply that high. Perhaps the consumer needs to bargain a bit harder...
 

Lorelei

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Date: 3/27/2009 2:59:57 PM
Author: ddcha






Date: 3/27/2009 2:52:20 PM
Author: purrfectpear
1. Diamonds are not an investment. Similar to a new car, they 'depreciate' the moment they leave the retail store.


2. An EGL 1.05, F, VS1 currently retails for $5200. The resale value is closer to $3000.
The article above is helpful in describing to me 'this is the way it is', but without explaining to me why this is the way it is. A diamond is a non-perishable scarce commodity in my mind. Very different from a car. I tend to view a diamond like I would look at a bar of gold. Or even a house. or plot of land. I guess the retail markup and margin is simply that high. Perhaps the consumer needs to bargain a bit harder...
I suppose it is a case of supply and demand, I do see what you are saying but when diamonds are being sold retail with various benefits and consumer protection laws offered at a certain price point, then it is reasonable to expect less when trying to resell a ' used' diamond. Maybe it would be helpful for you to get an independant appraiser to examine your diamond and give you a price point you can work with for resale purposes. As to why EGL lab graded diamonds can go for less still than GIA, EGL are considered to be less strict on grading in some circumstances, this can make them less attractive as a trade in option by vendors due to this reason, as they need to be able to resell a diamond readily and make some sort of profit on it as easily as possible - and some diamonds just aren't good propositions even to a jeweller who has an inventory of his own diamonds and can decide to take a trade in if he so wishes.

This page explains how the grading labs rank

http://diamonds.pricescope.com/grading.asp
 

Lorelei

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Date: 3/27/2009 3:12:00 PM
Author: ddcha
I appreciate it thank you.
Most welcome, I hope it helped a bit and I wish you the best of luck in trying to sell your diamond!
 

Stone-cold11

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Simple fact is that most of the stones displayed online or in stores are not own by the vendors but by the cutters and payment will be made to the cutters only after the stones are sold and not necessary immediately, depending on the agreement between them. But for a store to buy your stone means he has to come up with the cash up-front, on a stone of questionable quality, (e.g. you may be a one-time seller that he is not familiar with, out to scam him? how can he know with complete trust?) and need additional expenditure of time and money on his part, to send to a grading lab to be regraded, polish off nicks, etc. All will affect his liquidity, so what is it to entice him to buy your stone other than greater potential profit by buying it at a much lower price than from a cutter?
 

Moh 10

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Diamonds are not a commodity like gold which has a universally agreed to and easily-measurable value.

The reason a private seller gets only half, or less, of what a retailer gets for a diamond is retailers are not charities.
They must pay for their expense and then make a profit.

If a retailer had to pay $5000 to buy it but then sell it for $5000 because "that's what it is worth" how could they survive?

Buyers prefer buying from a retailer, not a private seller where trust and comfort level are concerns.
 

swingirl

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Occasionally vendors have taken in previously owned stones when someone was making a substantial purchase. Have you contacted the vendors and gotten any feedback on that possibility?
 

ddcha

Shiny_Rock
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Date: 3/27/2009 3:13:34 PM
Author: Moh 10
Diamonds are not a commodity like gold which has a universally agreed to and easily-measurable value.


The reason a private seller gets only half, or less, of what a retailer gets for a diamond is retailers are not charities.

They must pay for their expense and then make a profit.


If a retailer had to pay $5000 to buy it but then sell it for $5000 because ''that''s what it is worth'' how could they survive?


Buyers prefer buying from a retailer, not a private seller where trust and comfort level are concerns.
Yes, I''m aware of this. But give me an example of another non-perishable scarce commodity where the margin is so great. I''m talking about the stone and not fashion jewelry. I know that a retailer needs to make a margin of course. But it''s astonishing what the margin appears to be. From the numbers I''ve seen thrown around, it looks like a traditional retailer gets a 80% margin on the stone. A "wholesaler" or dealer gets 50-60% for the stone itself. Sound right?
 

neatfreak

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Date: 3/27/2009 3:29:07 PM
Author: ddcha
Date: 3/27/2009 3:13:34 PM

Author: Moh 10

Diamonds are not a commodity like gold which has a universally agreed to and easily-measurable value.



The reason a private seller gets only half, or less, of what a retailer gets for a diamond is retailers are not charities.


They must pay for their expense and then make a profit.



If a retailer had to pay $5000 to buy it but then sell it for $5000 because ''that''s what it is worth'' how could they survive?



Buyers prefer buying from a retailer, not a private seller where trust and comfort level are concerns.

Yes, I''m aware of this. But give me an example of another non-perishable scarce commodity where the margin is so great. I''m talking about the stone and not fashion jewelry. I know that a retailer needs to make a margin of course. But it''s astonishing what the margin appears to be. From the numbers I''ve seen thrown around, it looks like a traditional retailer gets a 80% margin on the stone. A ''wholesaler'' or dealer gets 50-60% for the stone itself. Sound right?
Where are you getting this?
 

Lorelei

Super_Ideal_Rock
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Date: 3/27/2009 3:23:09 PM
Author: swingirl
Occasionally vendors have taken in previously owned stones when someone was making a substantial purchase. Have you contacted the vendors and gotten any feedback on that possibility?
I was thinking the same as Swings, then it can be worth asking certainly.
 

ddcha

Shiny_Rock
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Mar 25, 2009
Messages
170
Where are you getting this?
You said that I should expect to get roughly 40% for the price I pay a vendor(such as GOG or the other vendors). That means that their gross margin is 60%. I assume traditional retailers (i.e., Zales, Tif, etc.) need to make more than that, so call it 80%? Is this erroneous?
 

ddcha

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170
Date: 3/27/2009 3:23:09 PM
Author: swingirl
Occasionally vendors have taken in previously owned stones when someone was making a substantial purchase. Have you contacted the vendors and gotten any feedback on that possibility?
Yes, I''ve been given this opportunity since I''m upgrading from 1ct to 2ct. I''m not sure what to answer when they ask me "what are you looking to get for the trade-in?". Hence I''m asking all the experts here....
 

Lorelei

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Date: 3/27/2009 3:41:22 PM
Author: ddcha

Where are you getting this?
You said that I should expect to get roughly 40% for the price I pay a vendor(such as GOG or the other vendors). That means that their gross margin is 60%. I assume traditional retailers (i.e., Zales, Tif, etc.) need to make more than that, so call it 80%? Is this erroneous?

I think that was from my post above, not NeatFreak''s - quoted from Neil Beaty''s article .

"If you’re selling to a dealer, expect to see about 40% - 75% of that price. Popular things, like 1.00/VS1/G/GIA/XXX are going to sell easier and for a higher percentage than the things they will expect to need to own for a while before they can find a it new owner, like a 2.85/VVS2/K/IGI/Marquise. It doesn’t matter what you paid, and it doesn’t matter what the selling jeweler/appraiser said the ‘retail’ value is. "
 

ddcha

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Messages
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Date: 3/27/2009 3:45:03 PM
Author: Lorelei
Date: 3/27/2009 3:41:22 PM

Author: ddcha


Where are you getting this?

You said that I should expect to get roughly 40% for the price I pay a vendor(such as GOG or the other vendors). That means that their gross margin is 60%. I assume traditional retailers (i.e., Zales, Tif, etc.) need to make more than that, so call it 80%? Is this erroneous?


I think that was from my post above, not NeatFreak''s - quoted from Neil Beaty''s article .


''If you’re selling to a dealer, expect to see about 40% - 75% of that price. Popular things, like 1.00/VS1/G/GIA/XXX are going to sell easier and for a higher percentage than the things they will expect to need to own for a while before they can find a it new owner, like a 2.85/VVS2/K/IGI/Marquise. It doesn’t matter what you paid, and it doesn’t matter what the selling jeweler/appraiser said the ‘retail’ value is. ''

you are correct. apologies. You all have been incredibly helpful! thank you!
 

Lorelei

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Date: 3/27/2009 3:47:02 PM
Author: ddcha

Date: 3/27/2009 3:45:03 PM
Author: Lorelei

Date: 3/27/2009 3:41:22 PM

Author: ddcha



Where are you getting this?

You said that I should expect to get roughly 40% for the price I pay a vendor(such as GOG or the other vendors). That means that their gross margin is 60%. I assume traditional retailers (i.e., Zales, Tif, etc.) need to make more than that, so call it 80%? Is this erroneous?



I think that was from my post above, not NeatFreak''s - quoted from Neil Beaty''s article .


''If you’re selling to a dealer, expect to see about 40% - 75% of that price. Popular things, like 1.00/VS1/G/GIA/XXX are going to sell easier and for a higher percentage than the things they will expect to need to own for a while before they can find a it new owner, like a 2.85/VVS2/K/IGI/Marquise. It doesn’t matter what you paid, and it doesn’t matter what the selling jeweler/appraiser said the ‘retail’ value is. ''


you are correct. apologies. You all have been incredibly helpful! thank you!
Glad to help!
 

strmrdr

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Messages
23,295
online margins are between 8% and 25% before expenses on "new" goods depending on the stone and the information provided as well as the service offered.
Online sellers would kill for a 20%-25% profit on new goods most are closer to 10%.
Out of that 10% comes shipping to them then to you if they inspect it, time to evaluate and take images, if they provide a b-scope report it costs per diamond for the report and the sales persons salary.

The industry has and still does do everything it can to kill the secondary market, some will offer a much better deal than others.
 

oldminer

Ideal_Rock
Trade
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6,436
The diamond will vary in valiue according to how accurate the EGL grades meet GIA grading. In most cases there is some disparity and dealers who really do not know how to make their own grades usually just discount the veracity of EGL grading. Sort of stupid, but that''s how it works.
If it is a typically soft graded stone the liquidation, cash value is about $3500 to $3800 with some wiggle room left on either side. If it is properly graded and the buyer thinks they can get a legitimate F-VS1 grade from GIA the diamond is worth up to the $5,000 range, but this is at the upper limits. Most buyers will not pay to the top end.

On a trade in, you must foloow a very distinct protocol or you will be lost. Never ask about a trade in until the last moment and when you have the final price of what you want. Then, and only then, inflict the trade in on the seller..... They likely will not exceed the prices I have given you, but if they do, then you are getting even a further discount from the agreed price. If they offer a trade in below the prices I suggested, they are buying your trade in at a price they will make more money on. Making money is a requirement to stay in business and it is not a dirty thing, but the informed person can do a transaction well and not go away ashamed of how poorly they made their deal.

I hope this helps you.
 

zebramoray

Rough_Rock
Joined
Jul 8, 2008
Messages
38
ddcha.. I had this same issue last year. I bought my wife a 1.57 round 10 years ago and wanted to upgrade it for our 10 year anniversary. Jewelers were offering me about 30-40% of what I paid for it 10 years ago.. I ended up doing the Craigslist and Ebay thing. Eventually sold it on Ebay for about what I paid for it 10 years ago, maybe $1000 less. You have to get your stone as close to the buyer as possible.. Jewelers are too far down the chain.

The thing is, you bought it at retail x years ago, and now you are trying to sell it.. Jeweler are buying at wholesale prices.. When you buy at retail and sell at wholesale, you take a beating..

I ended up buying a 2.67 off of Ebay from a great jeweler in LA... Found the stone here on Pricescope and he got it for me and sold it to me for less.. Learned lots from this site though!
 

oldmancoyote

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Date: 3/27/2009 3:41:22 PM
Author: ddcha

You said that I should expect to get roughly 40% for the price I pay a vendor(such as GOG or the other vendors). That means that their gross margin is 60%. I assume traditional retailers (i.e., Zales, Tif, etc.) need to make more than that, so call it 80%? Is this erroneous?
It would be correct if the dealers got most of their stones at that price. Unfortunately for them, they don''t. However, because of cash-flow and risk the price you get offered is deeply discounted compared to what the wholesaler/manufacturer can get. It then gets discounted further because if there were a flourishing secondary market many in the industry would go belly up, since colourless diamonds aren''t all that rare after all. Only rare diamonds (extremely well cut, coloured and/or very large) escape this fate - which is why some PS vendors can afford to offer 70% cashback on their stones.
 

denverappraiser

Ideal_Rock
Trade
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Messages
8,805
Date: 3/27/2009 3:29:07 PM
Author: ddcha

Yes, I'm aware of this. But give me an example of another non-perishable scarce commodity where the margin is so great. I'm talking about the stone and not fashion jewelry. I know that a retailer needs to make a margin of course. But it's astonishing what the margin appears to be. From the numbers I've seen thrown around, it looks like a traditional retailer gets a 80% margin on the stone. A 'wholesaler' or dealer gets 50-60% for the stone itself. Sound right?
You would be hard pressed to find a product that isn’t worse other than the ones you’ve listed, and those only in certain rather narrow circumstances.

How about bricks? They’re not exactly perishable. Depending on what you get they cost anywhere from $1 to about $4 at Home Depot. Resale value is zero or close to it. This is not evidence that Home Depot's proceeds are 100% profit.

How about tires? They’ll cost you $30 - $200 apiece and you have to PAY to get rid of them.

Paper
Lumber
Books
Gasoline
Glass
Clothing
Etc. etc. etc.

None of these are what you would call particularly perishable. Although few are quite as long in usable life as a diamond, product life cycle doesn't seem to be the root of the issue. It's about the costs associated with a retail distribution system and a procedure for recycling things. Nearly everything you buy falls into this category, including other 'commodities' like rise and heating oil.

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

m76steve

Brilliant_Rock
Joined
Dec 21, 2008
Messages
605
ddcha-i guess you have to remember you have an item that although is old is definately not in short supply-unless you have an almost perfect stone you will probably only receive about 50 to 60% of what you paid for it-as a car-as soon as you take possession its value goes down-not half-but not what you paid for it-unless you buy from a wholesaler or cutter you are going to loose some of your paid price. will hold value better than most cars-i think that it can be considered a good commody especially with inflation foretold on the horrizon. my 2 cents...
 
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