Our clients are very important to us – past, current and potential. We want you to be armed with the right knowledge when you decide it’s time to sell your diamonds. This includes understanding the value of a diamond. We’ve seen clients in the past being somewhat disappointed with the offer they’ve received when selling a diamond. Whether it’s a family heirloom, an old engagement diamond or a stone you inherited – the price will always vary from the amount it was initially bought for.

What is very important to understand is that when you receive a valuation from a jewellery store, the value of the items is for insurance purposes only. In case you need to replace the item due to theft or loss… In fact, the retail valuation can be as much as 5 to 10 times higher than the actual intrinsic value.

So why do jewellery stores charge what they do? Don’t forget that they have many expenses (rent, overheads, insurance etc) and they are understandably driven by profit. The cost to manufacture jewellery is very high and this leads to high retail prices.

So, what is the value of a diamond? If we were to take a 1ct diamond, colour I SI1 as an example; a diamond digger would sell the rough diamond to a diamond polishing company for R36 000. The polisher, after shaping, polishing and readying the diamond for retail would sell the diamond to a wholesaler for R43 000. The wholesaler then sells the diamond on to a jewellery store for R61 000 and the retail jeweler would then sell that diamond to an individual for R90 000.

Once the owner is ready to sell their diamond to The Gold Guys, we would only be able to offer them R61 000.

Knowledge is power, so next time you decide to sell a diamond you’ll have a better understanding of the value of a diamond and how the process works.

Next week, we’ll explain how we go about pricing your diamonds based on the 4C’s

We hope this helps you understand the valuation vs retail price vs intrinsic value difference a bit better.