Nowadays, the trend of selling engagement rings at the end of a marriage or through inheritance is rising. In such a situation, you might wonder “ what holds the value of the engagement rings”. Well, here in this article we will go through the following question and understand the resale value of an engagement ring.
This will help you to educate on how you can sell your engagement ring at the highest profit margin without getting scammed by unreliable buyers. So let us not waste any more time and look into it.
Elements that Hold the Value of Engagement Rings
To understand the resale value, we need to go through the prime components that determine the value of the engagement rings. These are as follows-
Value of the metal
Typically, a spot price is maintained for each metal. These might change from one another based on the availability and demand in the market, and one can simply find them online. The standard ring only contains a few grams of metal.
Calculating the spot price of the metal is extremely basic provided you know its purity. Customers that purchase an item from you won’t pay the spot price since they will have to pay additional charges to have the metal melted and refined after that.
You might expect to pay anything from 80% to 95% of the current market price. It is essential to keep in mind that the metal that makes up an engagement ring is the component with the lowest monetary worth. In most cases, the metal’s share of the ring’s overall value ranges from 5–25%.
Center stone attached to the metal
This is the most valuable component of the ring and often accounts for 75%–95% of the ring’s worth; nonetheless, it is also the component that is the most difficult to grade and price. Even though we all like the notion that “diamonds are eternal,” it is essential to keep in mind that diamonds do not maintain or grow in value over time.
This is the single most crucial fact regarding diamonds. Only diamonds that have a history and distinctive traits (such as having belonged to royalty) will see a rise in value over time. In reality, this is not the case with the vast majority of diamonds. In addition, each diamond has its own unique characteristics that set it apart from the others.
It is quite unlikely that you will ever come across two diamonds that are an exact match to one another. Because there are no clear guidelines to go by, determining the value of a pre-owned diamond may be a difficult and demanding undertaking.
However, things become much more complicated when you consider that diamonds are graded using the well-known “four Cs.” To be more specific, Color and Clarity are examples of metrics that are evaluated by the human eye and do not belong to a category of metrics that are completely defined.
As a consequence of this, you will discover inconsistencies in the grading of a diamond even among the most reputable grading laboratories, such as the Gemological Institute of America (G.I.A.). Even while working in the same laboratory and even when graded by the same person, the exact same diamond might get different grades.
And here’s where things get even more complicated: a diamond’s worth may also be determined by a number of other factors that are not as well recognized. Measurements such as Cut Grade and Fluorescence may have a significant effect on the price of a diamond. Even the majority of jewelry retailers are unable to identify these parameters with the human eye, and there are a few others as well.
As a consequence of this, the majority of jewelry retailers will not be capable of accurately grading and pricing diamonds since they do not have the high-end equipment necessary for the task.
How Diamond Engagement Rings Hold Their Value In the Market?
The value of diamonds, like the value of most things in life, is determined by the balance between supply and demand. Diamonds, in contrast to gold, for example, do not get their value from a single source. This makes determining they’re worth it difficult. Prices might be different depending on who you ask about them.
These days, some standards are used, such as the Rapaport price sheet, as a baseline. This is not the real worth of a diamond; rather, it is meant to serve as a guideline for the range of prices that diamond buyers are willing to accept.
When everything is said and done, the person who makes the offer is the one who decides how much a diamond is worth. Because of this, it is strongly important that you contact as many potential buyers as you possibly can, as this will eventually guarantee that you obtain the highest possible price that the market can provide you.
There are not many trustworthy businesses available on the market today that aggregate purchasers of jewelry and diamonds. Keep in mind that the value of the diamond that you paid retail for is in no way reflective of the value that you will obtain when you resale it. This is an important point to keep in mind.
There is likely to be a considerable reduction, often as much as twenty to thirty percent off the original retail price. Why? There are two primary explanations for this phenomenon. The first one is the overhead expenses that are spent throughout the process of obtaining the diamond from the mine to the jeweler and the expenditures associated with marketing the diamond.
The second factor would be the large profit margins that the jeweler establishes for himself as well as for everyone else in the “food chain.” When you add all of these factors together, the value of a diamond skyrockets well above its real worth on the market.