We love speaking with current and potential MiaDonna customers to hear their thoughts, get their opinions, and answer their questions. Recently, we’ve been getting a lot of questions asking about lab grown diamond resale value. So, we have put together a comprehensive resource covering everything you need to know about reselling lab grown diamonds.
Comparing Lab Grown and Natural Diamond Markets
The marketplaces for lab grown and natural diamonds differ in many ways, affecting how much money they may be sold for. Natural diamonds have long been prominent in the luxury market because of their rarity and the billions of years it takes to develop. However, lab grown diamonds provide a more ethical and cost-effective substitute because they are produced through sophisticated technological processes in a couple of weeks. Even though lab grown diamonds have the same physical and chemical characteristics as natural diamonds, there is frequent doubt about how valuable they will remain in the long run. The resale market for lab grown diamonds is still developing, and important variables include shifting customer views, brand reputation, and technology breakthroughs. The market dynamics for lab grown diamonds may change as more people become aware of and accept them, resulting in a more robust and comparable resale market.
Are Lab Grown Diamonds a Good Investment?
As Lab Grown Diamonds have grown in popularity, one of the main questions we receive is whether or not they can be resold at a later date. Please let us be clear, buying an engagement ring or diamond, regardless of its origin, with the intent to sell it in the future is not a good investment; but it’s not a worthless purchase. Many traditional jewelers tell customers that lab created diamonds have absolutely no value, but this could not be further from the truth. Most natural diamonds have resale value, and most lab created diamonds will have a similar resale value, as well.
The most important element of this question is the lack of understanding about the resale value of earth-mined diamonds. Unless the diamond in question is extremely rare, it’s virtually impossible to sell an earth-mined diamond purchased in the last decade for more money than what you paid for it. There’s simply no reason why a jeweler would be compelled to buy your diamond at the market price when they could buy an identical diamond at a lower price from any one of hundreds of wholesalers who might offer better payment terms.
A Misconception of Value: Perpetuated by Many Jewelers
Unfortunately, this misunderstanding has been used as one of the biggest selling points by earth mined diamond jewelers over the last 50 years. Customers are told their diamonds are not just a personal treasure, but also a valuable treasure, planting the idea that their purchase can be resold for an amount equal to or greater than what was originally paid. What these jewelers don't tell customers is that the second a person walks out of the store, the diamond's resale value drops to 30% of the purchase price, a 70% loss from the original cost.
Ultimately, you are buying an heirloom that you can pass on for generations. As young people become even more aware and interested in products that match their values, you can feel confident they will appreciate that the lab grown diamond you are sharing with them had a positive impact on the world and they can feel proud wearing it.
Are Lab Grown Diamonds Valuable?
Lab grown diamonds are most definitely valuable. The scientists, laboratories, engineers, equipment, time, effort, and expertise are all factors that go into producing some of the world's highest quality diamonds. The reason lab grown diamonds are up to 40% less costly than mined diamonds is not because they are lower quality (in fact they are higher quality than 97% of mined diamonds) it’s because the supply chain is so much shorter.Regardless of origin, either lab created or mined, all diamonds are priced using an internationally accepted pricing system.
This system is known as the Rapaport Pricing Method, and it determines wholesale and retail pricing. Prices are generated first based on the “Four C's” of diamonds: carat, cut, clarity, and color. Then, whether lab grown or mined, is considered.
We’re seeing a very similar system for the resale value of lab grown diamonds emerging today, particularly within the online market.
We encourage consumers to keep in mind that just because your local jeweler is not currently buying lab grown diamonds does not mean that there is no resale value for them. Rather, these lab grown alternatives are a relatively new product on the market and we need more time to see how this develops, just as we once did with earth-mined diamonds.
Factors That Go Into a Diamond’s Final Price
Two of the big things to keep in mind with diamond resale values is the quality of the diamond and all the hands that touch it before it is purchased by a consumer. 97% of mined diamonds are ordinary Type I diamonds. At MiaDonna, we only sell Type IIa lab grown diamonds which are of superior quality that are brighter and harder than ordinary Type I diamonds.
Earth-mined diamonds can trade hands 20 times and travel across 5 continents before reaching the consumer. In addition to all the humanitarian and environmental issues that come with the purchase of Earth-Mined Diamonds, consumers are also forced to pay for each incremental markup in the long chain of exchanges. Lab grown diamonds have a much shorter trip between origin and retail purchase, resulting in significantly lower pricing.
Why Some Traditional Jewelers Don’t Sell Lab Grown Diamonds
Most earth-mined diamond retailers are firmly entrenched in the old ways of marketing diamonds and don’t want to upset the apple cart by offering clearly beneficial pricing associated with lab grown diamonds. Offering lab grown diamonds alongside earth-mined diamonds would likely sway consumers to purchase the former, forcing retailers to lose out on sales of the over-priced diamonds in their inventory. Once all consumers are educated on the many benefits of lab grown diamonds and the ethical issues that earth-mined diamonds carry with them, the choice will become so much clearer for both purchasing and reselling diamonds.
MiaDonna’s Upgrade Program
Have you asked a traditional jeweler if they’ll buy back an earth-mined Diamond at the full purchase value when you decide to upgrade your center stone? They’ll probably laugh you out of the store. But at MiaDonna, we offer an upgrade program that allows you to get a credit of the full purchase price of your lab grown diamond when you select a new center stone that is at least twice the value. You can learn more here.
