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I wonder how well this Reddit-famous commentary about the diamond industry has aged: https://reddit.com/r/IAmA/comments/8pb8d5/i_grow_diamonds_i_make_custom_je

I wonder how well this Reddit-famous commentary about the diamond industry has aged: https://reddit.com/r/IAmA/comments/8pb8d5/i_grow_diamonds_i_make_custom_jewelry_with_these/e09x919/ https://reddit.com/r/IAmA/comments/8pb8d5/i_grow_diamonds_i_...

tda 5y ago
There was an article the other day that talked about the resale value of diamonds. Basically jewelers refuse to buy back diamonds at any reasonable price (compared to original retail value. And refuse to make new rings with old diamond etc. So there is very little market for second hand diamonds. Sounds like a business ready to be disrupted Edit: Found the article: https://www.nytimes.com/2019/09/15/fashion/jewelry-diamond-sale.html https://www.nytimes.com/2019/09/15/fashion/jewelry-diamond-s...
- deleted 5y ago
  [deleted]
- faet 5y ago
  Diamond prices are fairly stable, the issue is jewelers mark prices way up and most people don't know what a good price is. If a diamond goes for $5k wholesale, chances are they're looking to sell it for $10-20k. Since most people only buy 1-2 engagement rings in their lifetime they don't know what is a reasonable price. They "shop around" at three stores that are all owned by the same company. So they end up paying $15k for a ring. Then if they need to return it they only get $5k for it. They overpaid due to the emotion of the moment and expect to get something close. Even in the article you listed there were a number of offers all close to each other. ~8-10k is a 'reasonable price' for that ring. Most jewelers I've interacted with are more than happy to buy your diamond for a bit under wholesale cost. They're also happy to make rings with old diamonds. They make money selling settings too. One issue is the public. There are a number of people who don't want a "Used Ring". But, there are a large number of diamonds being sold that have been owned previously.
  - bluedevil2k 5y ago
    This is all correct! I've worked in the diamond business for almost a decade now and see people complain on HN and Reddit constantly about diamonds all while barely understanding the industry at all. The common complaint of "you can't sell them for what you paid" is a dumb complaint because they don't understand the HUGE markup the stones receive at retail. Here's the profit margins that the stones receive along the way: - Miners selling to cutters - 10-15% profit - Cutters selling to wholesalers - 3-5% profit - Wholesalers selling to retail - 10-20% profit - Retail to consumers - 100-200% profit Everyone on these threads is always mad at the miners and I never see any anger placed on the Jared's, Kay's, Zale's of the world (all owned by the same company btw).
    - bkor 5y ago
      > The common complaint of "you can't sell them for what you paid" You and the other person gives loads of reasons why people giving that complaint are entirely right. The marketing is (partly) that it is valuable. In practice you'll not be able to resell it for a similar value.
      - bluedevil2k 5y ago
        I was hoping the takeaway would be “don’t buy diamonds from retail”. BlueNile is the best option here in the US for buying diamonds, usually around a 10-15% markup over wholesale.
        banbanbang 5y ago
        No. Costco is the best option. You can also return for a full refund.
    - conductr 5y ago
      My wife is a jewelry buyer for big retail , this is accurate but people also don’t understand the overhead and cost associated with retail in general. It’s much more burdened that some B2B middleman. My opinion after countless conversations with her about the industry is the best model would be something like Trunk Club where they mail you a bunch of rings, you decided which to keep. It probably exists in some format, if not, the obvious problem is the value of the inventory and the potential for fraud/theft that it would attract. Unfortunately it’s essentially what’s been going on in our house since covid WFH, she had a million dollars of product sitting on a shelf in her home office.
- deleted 5y ago
  [deleted]
- clajiness 5y ago
  > Basically jewelers refuse to buy back diamonds at any reasonable price (compared to original retail value. And refuse to make new rings with old diamond etc. I bought my wife's diamond out of an ugly ring I found at a pawn shop. I brought it to a jeweler at a mall and had him pop it in one of his bands. I saved a TON of money, my wife got a modern design with a really high quality stone, and the jeweler still got some business and his ring on another finger. Win/Win
JoshuaEddy 5y ago
The comment predicts a precipitous fall in price. A gem-quality diamond price index [1] shows fluctuation but nothing precipitous: Jun 7 2018: 124.79 (day of Reddit comment) May 4 2021: 124.27 (today) The reddit comment ignores obvious macroeconomic trends. Growth of middle class in China and India are adding to the diamond demand (a lot), in addition to general global population growth and greater purchasing power. [1] http://www.idexonline.com/diamond_prices_index http://www.idexonline.com/diamond_prices_index

tda 5y ago

There was an article the other day that talked about the resale value of diamonds. Basically jewelers refuse to buy back diamonds at any reasonable price (compared to original retail value. And refuse to make new rings with old diamond etc. So there is very little market for second hand diamonds. Sounds like a business ready to be disrupted Edit: Found the article: https://www.nytimes.com/2019/09/15/fashion/jewelry-diamond-sale.html https://www.nytimes.com/2019/09/15/fashion/jewelry-diamond-s...

deleted 5y ago
[deleted]
faet 5y ago
Diamond prices are fairly stable, the issue is jewelers mark prices way up and most people don't know what a good price is. If a diamond goes for $5k wholesale, chances are they're looking to sell it for $10-20k. Since most people only buy 1-2 engagement rings in their lifetime they don't know what is a reasonable price. They "shop around" at three stores that are all owned by the same company. So they end up paying $15k for a ring. Then if they need to return it they only get $5k for it. They overpaid due to the emotion of the moment and expect to get something close. Even in the article you listed there were a number of offers all close to each other. ~8-10k is a 'reasonable price' for that ring. Most jewelers I've interacted with are more than happy to buy your diamond for a bit under wholesale cost. They're also happy to make rings with old diamonds. They make money selling settings too. One issue is the public. There are a number of people who don't want a "Used Ring". But, there are a large number of diamonds being sold that have been owned previously.
- bluedevil2k 5y ago
  This is all correct! I've worked in the diamond business for almost a decade now and see people complain on HN and Reddit constantly about diamonds all while barely understanding the industry at all. The common complaint of "you can't sell them for what you paid" is a dumb complaint because they don't understand the HUGE markup the stones receive at retail. Here's the profit margins that the stones receive along the way: - Miners selling to cutters - 10-15% profit - Cutters selling to wholesalers - 3-5% profit - Wholesalers selling to retail - 10-20% profit - Retail to consumers - 100-200% profit Everyone on these threads is always mad at the miners and I never see any anger placed on the Jared's, Kay's, Zale's of the world (all owned by the same company btw).
  - bkor 5y ago
    > The common complaint of "you can't sell them for what you paid" You and the other person gives loads of reasons why people giving that complaint are entirely right. The marketing is (partly) that it is valuable. In practice you'll not be able to resell it for a similar value.
    - bluedevil2k 5y ago
      I was hoping the takeaway would be “don’t buy diamonds from retail”. BlueNile is the best option here in the US for buying diamonds, usually around a 10-15% markup over wholesale.
      - banbanbang 5y ago
        No. Costco is the best option. You can also return for a full refund.
  - conductr 5y ago
    My wife is a jewelry buyer for big retail , this is accurate but people also don’t understand the overhead and cost associated with retail in general. It’s much more burdened that some B2B middleman. My opinion after countless conversations with her about the industry is the best model would be something like Trunk Club where they mail you a bunch of rings, you decided which to keep. It probably exists in some format, if not, the obvious problem is the value of the inventory and the potential for fraud/theft that it would attract. Unfortunately it’s essentially what’s been going on in our house since covid WFH, she had a million dollars of product sitting on a shelf in her home office.
deleted 5y ago
[deleted]
clajiness 5y ago
> Basically jewelers refuse to buy back diamonds at any reasonable price (compared to original retail value. And refuse to make new rings with old diamond etc. I bought my wife's diamond out of an ugly ring I found at a pawn shop. I brought it to a jeweler at a mall and had him pop it in one of his bands. I saved a TON of money, my wife got a modern design with a really high quality stone, and the jeweler still got some business and his ring on another finger. Win/Win

JoshuaEddy 5y ago

The comment predicts a precipitous fall in price. A gem-quality diamond price index [1] shows fluctuation but nothing precipitous: Jun 7 2018: 124.79 (day of Reddit comment) May 4 2021: 124.27 (today) The reddit comment ignores obvious macroeconomic trends. Growth of middle class in China and India are adding to the diamond demand (a lot), in addition to general global population growth and greater purchasing power. [1] http://www.idexonline.com/diamond_prices_index http://www.idexonline.com/diamond_prices_index