How Much Is My Jewelry Worth? Worst Case Scenario
The value of your jewelry depends on what you buy. My last post created a best case scenario; this one illustrates a worst case.
Designer pieces are beautiful, but the prices you pay are very high relative to resale value.
An important aspect of SellMy.Jewelry is to help you become a better jewelry consumer. In my last post, I calculated the rate of return from a diamond if a consumer purchased a 2 carat round brilliant from us in 1972. That rate of return was surprisingly positive. It was 1.29 percent, which still is not great but more than I expected.
After writing that last post, I felt I gave an overly optimistic example of calculating the return from buying jewelry. I tried to emphasize that the 2 carat diamond solitaire is an exception. Admittedly, I feel the best selling that particular ring and style and almost always suggest it first. However, most people buy jewelry and rings that are slightly different.
I wanted to use this post to discuss what most jewelry is worth or what consumers can normally expect when they resell jewelry. I found a ring that is on the other end of the spectrum.
The ring is beautiful, no doubt. It is made by Carelle, called the "Whirl Diamond Cluster" and features 3 bezel set diamonds weighing 0.65 carat total weight. The diamonds are high quality (G to H color and VS clarity. The ring is made of 18 karat yellow gold – I am going to assume that it weighs 5.0 pennyweight. The exact weight is not listed on their website*, but 5.0 pennyweight is a safe assumption.
Check this PDF for the quote details. The ring is listed our their website at $5,500. I predicted a resale price of $211 with the mounting selling at $130 and the 3 diamonds at $81. Creating a hypothetical situation in which someone buys this ring and wears it for a few years and then wants to sell it. The internal rate of return assuming she or he buys and sells at the prices I quoted is -56 percent or a loss of almost $5300. That is very significant and the most likely outcome in this scenario.
A quick budget demonstrates why. Before that, you can reference this past blog article explaining selling designer jewelry.Description Cost Diamonds $520 Metal/Casting $400 Setting/Finishing $75 Carelle Margin $4505
A consumer selling this ring a few years down the road is not going to recover Carelle’s profits. That is the largest line item on the budget. What will be recovered is the valuable materials (in the case the gold and diamonds).
Again, this an extreme example but one that I do see too often. I tell sellers to return the ring to "SAID" designer, and they will pay you the $5500. It can be a sad case, but one that is avoidable if you do some research.