SECONDARY MARKET

WHAT’S THE DEAL WITH SECONDARY MARKET

The diamond is never a financial investment. It is a luxurious item that symbolizes meaningful connections and commitment. Parting with your diamond is always a very hard thing to do since there’s a lot of emotional attachment to it.

However, one of the things people consider when they buy a diamond is the possibility of getting some of their money back in case things don’t go as planned. As it is with all of the luxury, the value is always significantly lower during the resale. The question is not how much money the customer gains, but how little they lose.

 

A strong secondary market for mined diamonds has emerged only in the last 4 decades, with the rise of the pawn shops and big jewelry networks implementing the trade-in policies.

The usual practice during resale is that a customer gets about 30% of the original retail price back (meaning 70% loss at least). Diamond owners might sell to a jewelry store, pawn shop or directly to another consumer, but they will never be able to return the full amount.

With trade-ins, a diamond might be appraised higher (about 50-70% of the original price tag). Although, the customers are expected to pay extra on top to get the bigger or better quality diamond. So there is no real money return.

DOES LAB-GROWN DIAMOND SECONDARY MARKET EXIST?

Some people claim that lab-grown diamonds don’t have resale value, but that is simply not true. There is an emerging lab-grown diamond secondary market, with some lab-grown manufacturers and sellers practicing trade-ins and buying from the public. One can also sell them to other consumers through social media, online marketplaces or auctions - the demand is there. 

However, the main advantage of lab-grown diamonds is that they cost half the price of their mined counterparts. One would lose less money overall even if their man-made diamond was stolen the next day after the purchase. Even if an individual is not able to resell it, it is still money better spent. So the fact that lab-grown diamonds are starting to acquire a resale value only adds to their appeal. Don’t lose. Choose lab-grown!

Here’s a little infographics to prove the point:
One mined diamond $10000 (retail price)
Resale value $3000
Loss: $7000

One lab-grown diamond (same 4C’s) $5000 (retail price)
Resale value - $????
Loss: $5000 (if stolen)