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Selling Diamonds vs. Auctioning DiamondsJanuary 20, 2016 - Diamond Articles
How do auctions works?
Diamond auction selling works in exactly the same way as auctioning any other valuable item. The house will set a minimum price for your stone and potential buyers can bid on the diamond at incremental values until there is a clear winner, either determined by time or until no other buyers offers an amount. The auction house then takes either a set fee or a percentage cut of the final price.
The real advantage of selling at auction is that you are able to work with industry specialists and achieve strong prices should your diamonds get in front of the right bidders. If you have the luxury of time and are willing to do your research, auctioning diamonds and jewelry could represent one way forward.
What kind of diamonds should go to auction?
For those thinking “Great! Where can I auction my diamond?”, it is worth pointing out that not all diamonds are suited for the auction house. In fact, the vast majority of diamonds on the market will not perform well at auction. The reason being is simple: most diamonds are not investment pieces and as such, large, reputable auction houses will not be interested. They focus on rare stones and do not feature the average stone that most jewelry is made up of. There are two types of auction worthy diamonds:
Fancy color diamonds
These perform well on the auction block and can fetch millions of dollars from wealthy collectors. They do however need to have outstanding grading’s and most importantly must be exceptionally rare colors (i.e. vivid red, pink or blue diamonds).
Non-fancy color diamonds
White diamonds can also make it to auction but bear in mind that these diamonds have unique characteristics: top color, clarity and cut grading’s as well as a large carat weight, typically over 5ct.
Disadvantages of selling diamonds at auction
Time and Labor Intensive
Selling through an auction house requires a certain amount of time and effort. If you have established that your diamond or diamond jewelry does meet auction house standards, you must first research reputable auction houses in your area. Different auction houses have varying degrees of specialism in diamonds and jewelry. You will want to ensure that you are working with the best in the industry and be clear on the following:
– Their specific fees
– Their individual process
– Payment method
– If they are interested in your diamond
– That you are comfortable with the reserve price they set
– When the next auction is scheduled
Auctions are not a daily occurrence; these are typically scheduled on a monthly basis or less frequently. Should you have a busy schedule and be looking for a quick sale, auction houses are not necessarily the right route.
It is important to set your expectations. Ultimately, there is no guarantee that if your item will sell if it goes to auction. Depending on the diamond you own, it may take multiple auctions to get your stone in front of the right audience. There is an element of luck involved as to whether the auction is well attended and if there is a buyer present willing to pay your asking price. You could find yourself in a situation whereby you wait one month for an auction only for your item not to sell. You repeat this process multiple times with no guaranteed sale and considerable time and energy expended.
Furthermore, given that only a reserve price has been established, you will not know how much money you will leave with. This lack of certainty coupled with a lengthy sale process is not ideal for those seeking a quick and less convoluted option.
What is an alternative to selling diamonds and selling diamond jewelry at auction? What is the best way to sell a diamond?
Mary from Florida got in touch with WP Diamonds after taking her diamond to a well-known auction house. They had set a reserve price of $17,000 with a 30% fee upon sale. Had the diamond sold at the minimum price she would have received just $11,900. She was relieved when her item did not sell and WP Diamonds offered her $16,500 upfront with no fees and a quick transaction. This is not an uncommon scenario; many first time sellers try auctioning diamonds and jewelry but ultimately turn to online diamond buyers.
How selling to a diamond buyer works
The advantage of selling to a diamond buyer is that it is a simple transaction whereby you are quoted a final price that you can chose to accept or decline. You are working with diamond experts who can ascertain the true value of your diamond based on current market prices. It is a straightforward and less time consuming option when compared to selling at auction.
Simply contact a trustworthy and established diamond buyer with the relevant information on your stone. They will then provide you with an initial price range and schedule an appointment or for you to send your diamond in for a final price. You can then opt to be paid by bank wire or check and the process is complete.
Unlike selling diamonds at auction, there are no fees or percentage cut when selling to a reputable diamond buyer. WP Diamonds’ final price is what you will receive in your bank account. For ease of transaction and a secure process with a guaranteed sale, fill out our online form today and we will be in touch shortly with an initial price.