If You Have a Diamond Ring You Want To Sell, Read This Now!
If you are interested in selling your diamond in the secondary market to a buyer like us at D. Atlas Estates, this information is something you may benefit from knowing.
It’s getting harder every year for diamond merchants to get a good price for their product as competition within their landscape becomes more and more aggressive.
First, there’s mounting production costs of natural diamonds. And now lab-grown synthetic diamonds have gotten so good that they’re almost indistinguishable from the kind that come out of the ground. On top of all that, some customers are turned off by the endemic violence in parts of diamond mining regions despite improvements made by implementation of Kimberley process certifications.
Second, oversupply is a harder nut to crack. In July, Bloomberg wrote, “High-end jewelry sales are stagnating as other luxury offerings like shoes, handbags and resort vacations, crowd the field.” In October they reported that “demand for rough diamonds is continuing to plunge as polishers and traders refuse to buy stones when they can’t make a profit.” And this month they quoted industry sources saying that De Beers cut prices about 5% at its November sale in the Botswanan capital of Gaborone, the first such price cut in years.
This is important to note because in diamonds, as in any industry, the price in the most recent transaction determines valuation. So the price cut at the latest sale in Botswana didn’t just affect the $390 million in rough diamonds sold there. It effectively erased billions of dollars in paper wealth by devaluing diamonds not involved in the sale. This affects all diamonds around the world, including yours.
The challenge from synthetic lab grown diamonds is particularly interesting. Synthetic diamonds are to natural diamonds what robots are to factory workers—an improving and cheaper alternative. If they are “too perfect,” that’s solvable: Diamond factories can mimic the inclusions and chemical impurities that natural diamonds have.
The last resort of diamond merchants is to acknowledge that synthetic diamonds have lower resale value than natural ones. That is a weak threat to mass-market customers, who don’t buy jewelry with a focus on resale value. They buy them for the pleasure they get from them. The same way they buy, say, avocados. And no one thinks about selling back an avocado.
In conclusion, if the diamond industry continues on this path, the engagement ring that you’re thinking about selling could be worth more than 5% less than it was worth last year or worse. So don’t wait for the market to crash. If you have any unwanted diamond jewelry that you’re looking to sell, NOW is the time.
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