Archive for March, 2012

Taking a Step Back


Written by Anne Johnson, Managing Director at MJ Gabel

In our previous blog posts, I have written mostly about the process and mechanics behind the diamond industry. Truths about the actual value of diamonds, as well as how they reach their price tag value by the time they reach a woman’s finger. While our website sheds light onto our massive crush on diamonds and personal interaction with clients, I thought I would take the time to explain why we are different than other companies. Let’s spell it out.;

I often use a car analogy when speaking of diamonds because it is often the easiest for most people to relate to, so humor me once again. If you are in the market for a new car, you go to a car dealership and someone who specialized in selling cars- they do not make the cars, or for that matter buy them back (unless it’s a trade), sells one to you. Many times consumers will do LOADS of research on the right car for them, and how and where to get the best price.

Jump a few years, and it’s time to upgrade or your just ready for a change. You may opt not to take the car to the dealer because you know they a) will not buy it back with cash and b) if you trade it in, you will take a massive hit. Your choice becomes selling it on your own, or trading it and taking less for it than both you and them know its worth.

Most people do not do nearly as much research on how to sell their used car, as what they put into finding the best price when purchasing it. If we were in the car business, this is where we would come in! Even though our love is diamonds, we can still apply this same scenario to the diamond marketplace.

The majority of individuals do not to nearly as much research on diamonds as they do with cars before they buy. In fact, the majority of customers know very little about their diamond when they buy it, and only when it comes time to sell it does the research begin. Like a car, consumers know what they paid for their diamond. This becomes usually one of two pieces of weaponry in their knowledge arsenal. The second piece is an appraisal that has been done on their diamond. With these two numbers in mind, most consumers believe that they must be able to get at least half or more of these two values.

In contrast to selling a car, the jeweler is often the first place a consumer might stop to sell their diamond back. Like a car dealer however, the jeweler really only sells diamonds, and their offers tend to be similar to a trade in value since they will need to make a profit again if they buy the diamond back. Thus, individuals tend to travel around looking for what different sources will offer them for their pieces. They hear a low number, and move on to the next stop.

This is precisely where we differ from others. Instead of just giving you a number, we walk you through exactly how we came up with that number. We take the time to illustrate for our customers how every aspect of their diamond has played a role in the price we have calculated. In addition, instead of just shooting a low offer out, we are happy to give you alternatives if we believe we can help you get more for the piece. The value of the stone is nothing compared to the consumer feeling valued as a client and that their best interest is our priority.

In the car market, consumers utilize Kelley Blue Book, or Edmunds as a resource to tell them what their car’s value is and what they can expect to get for it. We are to diamonds what those companies are to cars! The only difference is, we value the connection you have to the piece, how much you spent on it, the importance of educating the consumer, and the basic human interaction involved in selling it. The other difference is, unlike Edmunds or KBB, with MJ Gabel we will pay you the price we acknowledge your piece to be worth, or happily broker a transaction that will.

MJ Gabel / Diamond Buyers

www.mjgabel.com

800-804-1980

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Diamonds Are Forever, But is their Value?

Diamonds Are Forever, but is their Value?

            Written by Anne Johnson, Managing Director of MJ Gabel

 

Diamonds; they are the quintessential representation of value, wealth, luxury, strength, sparkle, and beauty. According to De Beers Consolidated Mines Company of South Africa, “A Diamond is Forever”(De Beers, 2011). These four words seem to have capsulated the retail diamond industry and are responsible for planting a misconceived idea of a diamond’s value.

Diamonds are one of the hardest natural materials found on earth, which makes them unique in their own right. Not to mention a rough diamond can be cut, faceted, and polished to give extraordinary light reflection that is difficult to match. Diamonds do in fact take millions of years to create, and thus a diamond really is forever.

During the 1940’s The DeBeers Company (the near-monopoly sized company who still dominates and controls the majority of the diamond market) cleverly linked the longevity and strength of a diamond as the never-ending symbol of love with its slogan “a diamond is forever” (Cockburn, 2002). The company was able to intertwine the product with an emotion, and create the ultimate idea of ever-lasting love and eternal value. This phrase intends the consumer to believe that a diamond will always hold its worth. What DeBeers and other diamond companies fail to mention is that while a diamond will never be worth nothing, it will also never be worth what you originally paid for it.

Diamonds do not come out of the mine looking as beautiful as they do in the jewelry store, and a lot of sweat goes into creating the sparkle defined in the stone. All of the costs that go into the mining, creation, distribution, marketing, transporting, and selling of these stones gets transferred onto the consumer. Take this as an example:

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