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What is the Real Resale Value of a Diamond?

What is the Real Resale Value of a Diamond?

Discover the key factors influencing the Diamond resale market so you’re able to make informed decisions before buying or selling your Diamond ring or jewellery piece.

The public has long been led to believe that Diamonds are a symbol of love with good resale value to justify the hefty price tag. And luckily, it's something that most people won't ever have to look into, as they stay happily married with the 'investment piece' taking prime real estate on the fourth finger of their partner's left hand to be cherished forever.

But this isn't always the case for many reasons whether it's upgrading your engagement ring, divorce or passing it down to the next generation, sometimes, things change. And more often than not, people will find that they weren't told the whole truth when purchasing their Diamond ring on its real resale value.

In fact, having a Diamond engagement ring only dates back to the 1920s, where De Beers ran a marketing campaign stating ‘A Diamond is Forever’. This campaign had exceptional success and cemented Diamonds as a symbol of eternal love and De Beers as an industry leader. De Beers also had a major hand in setting the precedence for price point and apparent ‘resale value’.

There are many factors affecting resale value with the most prominent being the actual quality and current condition of the Diamond, the market demand and official certification of the Diamond. However, even if all of these are near perfect, it is still difficult to get the same purchase price back at resale – due to the resale price incorporating quite large mark ups. These unclear markups can inflate the price of the Diamond anywhere from 300% to 1000% of its original wholesale value. This markup accounts for the middle men, cost of production and the company's profit too – which is protected by the fact that everyone else in the industry has relatively similar mark ups.

Recently, there was a new disruption to the world of Diamonds – lab-grown Diamonds. This technological advancement allowed us to produce Diamonds at a more accessible price point and quicker than it would take for a mined Diamond to form within the earth before being extracted. When lab-grown Diamonds first arrived on the market, they were certainly met with scepticism due to the lack of information surrounding the stone. However, in recent years they have solidified their place amongst precious gemstones. In fact, De Beers starting selling their very own lab-grown Diamonds using the brand Lightbox. Over time, the public view of lab-grown Diamonds changed to an appreciation of the ethical benefits and the accessible price point (they can undercut their mined counterparts by up to x4). Lab-grown Diamonds now hold a major position in the general market.

Although generally accepted by the general public, lab-grown Diamonds still receive backlash with those that oppose them and will often be questioned on how their resale value stacks up against a mined Diamond.

Differences between mined v. lab-grown

The resale value of all Diamonds is calculated by a mixture of ranking the quality via the four C’s (cut, clarity, carat and colour) and also, the public and market demand for Diamonds. Therefore, the resale value of any Diamond – mined or lab-grown – is contingent on its condition and the public desire. Mined diamonds have been in the market longer which does partially give people confidence that they will retain their value, however, they too can be susceptible to market fluctuations. Their resale value can drop drastically in economic recessions or as is happening as we speak, people realise that lab-grown Diamonds provide an identical product for a far more attainable price. Therefore, it is important for buyers to remember that resale varies greatly and buyers should remain realistic.

Lab-grown Diamonds are relatively new to the scene, meaning they haven’t quite captured as much public confidence as mined Diamonds. However, there are many other benefits of these new Diamonds that are causing buyers to quickly change their mind. Lab-grown Diamonds provide an alternative to those looking to source Diamonds more responsibly which currently, for many buyers, is important to factor in.

Whilst there has been a huge improvement in the sourcing of Diamonds – with the Kimberley Process of 2003 stating that Diamonds should not be sourced from zones of conflict, there is still some level of ambiguity around the actual working conditions within mines. There are mixed levels of adherence and actual enforcement of these regulations. Therefore, a lab-grown Diamond ensures you still are able to have the exact same sparkle on your hand without any shady sourcing practices. Public perception is improving rapidly and as is their resale value, which becomes a self-improving cycle. Plus, lab-grown Diamonds also tend to have far more accessible retail prices due to the less complicated process, you also had to spend on average almost 4x less to acquire a visually and chemically identical stone.

Shared Difficulties of Reselling

Reselling Diamonds is difficult regardless of the type of Diamond, simply due to the nature of the product. The demand for pre-owned Diamonds is less than the demand for new Diamonds and whilst there will be people looking for these Diamonds in order to find a more fair deal – that is exactly the challenge. People expect a more fair deal for ‘second hand’ rings.

Jewellery stores occasionally offer to help customers resell their rings by showing it in their display and if it sells, take a generous commission. The issue with this is there is no confirmed time span and can often take quite a while, with an end earning of far less than what you paid for the piece. Pawn stores on the other hand do offer instant cash, but the catch is often they propose deals undervaluing the ring. Therefore, when attempting to resell, customers do have to grapple with two less than ideal options.

Whilst it is true that mined Diamonds are a finite resource with enduring sentimental value, lab-grown Diamonds are entirely chemically identical. It is also easier to locate the origin of lab-grown Diamonds with some even being created with fully renewable energy sources such as our Solar Diamonds. And of course the more accessible price tag that allows the buyer even more leeway on size and design that they might be limited by when opting for a mined Diamond with 4x the RRP.

In the end, it’s important to evaluate all your options carefully and properly research your purchase without being swayed by scaremongering tactics as well as being realistic about what to expect if you were to resell your Diamond.

We also believe that the main focus of buying an engagement ring should be immortalising your love. The whole process should be enjoyed – after all, engagement ring shopping is the ultimate celebration of you and your partner. And despite any nuance on resale or market valuation, it is best if you just prioritise choosing the ring you love the most. Diamonds' attraction will last whether they are formed naturally or in a lab, acting as enduring symbols of devotion and love for future generations.  

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