Retail vs Resale: The Value of a Diamond

“It’s an investment.” You might hear this phrase as you shop around for jewellery. But most of us don’t plan on buying and selling diamonds the way we might buy and sell stocks. Most people purchase jewellery for the long haul--to serve as a memento or even a family heirloom.

So what is the purpose of a valuation? And if you do choose to resell your diamond jewellery, what can you expect?

The Jewellery Valuation

When you purchase diamond jewellery, it’s often accompanied by official-looking paperwork. It’s typically signed and dated, and it might even include a photograph or two. Additionally, it probably consists of an appraised value, which may be equivalent to the purchase price but is often more.

This type of valuation provides information about its replacement cost and would assist if it was damaged, lost or stolen.

Keep in mind that jewellery valuations primarily serve to help you know how much insurance you need. They don’t provide information about resale value.

A Diamond’s Selling Price

Diamonds indeed retain a portion of their value. Because of their scarcity, diamonds are almost always in demand. The quality and condition of a diamond also impact resale value.

The precious metal in a piece of jewellery also retains a portion of its value, but much of a piece’s worth lies in other factors:

Labour
The original jeweller’s profit
Branding (in the case of international brand names)

In summary, all of the factors listed above are lost when you resell a diamond. Only the diamond’s intrinsic value is left, and that usually equals about one-third of the original appraised value.

Why Do Diamond Values Change?

Unless a diamond is very rare, such as a fancy-coloured diamond or signed item of jewellery by a famous brand, it will depreciate. Most people like to buy new pieces of jewellery. The styles are fresh and the gem is unscratched. It’s a thrill to wear a shiny, new diamond.

It’s not so different from purchasing a new car. Part of the price is wrapped up in the dealer’s commission and the marketing of this year’s fleet. When you sell the car a few years from now, it won’t fetch as much as you paid for it, even if you’ve cared for it diligently.

Why Is It Important to Know the Difference Between Retail and Resale?

When you understand the diamond market and use information wisely, you can care for your jewellery and then achieve the best prices for it if you choose to sell it.

The retail price you receive from a valuation will help you to know how much insurance you need. If you don’t have a recent assessment, we can help you to evaluate your piece and make sure you have adequate coverage. We also provide free yearly evaluations, so you always know if you have enough cover.

Now that you know the difference between retail and resale, you’re better equipped to make wise purchasing decisions and secure adequate insurance for your favourite diamond jewellery. To learn more about Q Report jewellery insurance, or to get a free online quote, get in touch with us.

1300 882 018

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