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Post#2 @
07-16-04
, 11:20 AM
Susanp,
You point out the fundamental problem with calling diamonds an investment. It’s not an investment until you sell. Selling diamonds is hard. Selling diamonds for big money is really hard.
Good dealers operate on the concept of ‘value added’. This means that the presence of the dealer makes the merchandise more valuable than it would be without the dealer. Contrary to what people want to believe, the value of a diamond purchase is not entirely in the stone. Some examples of dealer added value are:
1) Assurance that the stone is not stolen or otherwise legally questionable.
2) Confidence that the stone is correctly being described,
3) Someone to take recourse against if things go badly.
4) Education
5) ‘Free’ upgrade service.
6) Insurance
7) Financing
8) Convenient location.
9) Prestigious packaging
Naturally, not all dealers offer these things, and some are better than others but they are all examples of valuable elements of the sale that are not part of the gemological properties of the stone. There are others. The important issue here is that as a seller you are going to be competing with dealers who offer the above and similar things that you won’t able to offer. How much these things are worth depends on specific transaction, the customer’s temperament, what services are being offered etc. Diamond selling is a wickedly competitive business and the dealers devote great effort to worrying about these topics.
I know I didn’t answer your question. It’s because I can’t. No one else can either. Hopefully I gave enough information to explain why it’s a problem.
Neil
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