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Natural diamonds are created deep within the earth over billions of years under extreme heat and pressure. Lab-grown diamonds, on the other hand, are manufactured in a laboratory to mirror their natural counterparts. In essence, the choice between natural and lab-grown diamonds boils down to personal values and preferences. Some people are drawn to the romance and history inherent in natural diamonds, while others appreciate the cutting-edge technology and ethical considerations associated with lab-grown varieties. The difference affects their resale value in interesting ways.
Resale value refers to how much money an item can be sold for in the used market relative to its original purchase price. For diamonds, both natural and lab-grown, understanding factors that influence resale value is important for consumers and industry players alike. Let's explore the nuances of diamond resale value by evaluating natural and lab-grown diamonds separately.
1. Natural Diamonds Resale Value
Natural diamonds hold strong resale value due to their rarity and artistic value. Only a small fraction of the diamonds unearthed by mining companies make it into engagement rings and fine jewelry. This scarcity keeps natural diamond prices elevated.
There are a few primary ways people resell natural diamonds. Selling to a pawnbroker or "we-buy-gold" store results in the lowest returns, around 50% of the retail price paid. Consigning a diamond at a jewelry store can fetch 60-70% of retail. Online resale sites like "Diamond Bistro" allow owners to set their asking price and may get closer to retail value through negotiation with interested buyers. Overall, a well-cut, high-clarity natural diamond one day hopes to resell for 60-80% of the original cost.
2. Lab-Grown Diamonds Resale Value
Lab-grown diamonds also have developing resale markets, but their manufactured origins affect perceived value differently than natural diamonds. Some consider lab-grown diamonds to have no resale value since their presence isn't limited by mining. But this disregard shifts in people's perspectives and the diamonds' quality independent of origin. A growing segment views lab-grown diamonds as an affordable, environmentally-friendly alternative to mined diamonds and is unconcerned with resale potential.
For those focused on resale value, online resale sites report lab-grown diamonds reselling around 30-50% of the original purchase price on average. This resale recovery rate lags natural diamonds partially due to lab-grown diamonds still maturing within the market.
3. Do lab-grown diamonds have no value?
While lab-grown diamonds may command lower resale prices today relative to natural diamonds, it would be inaccurate to say they have no value in the used market. After all, the quality of a specific diamond has little to do with whether it formed underground versus in a lab. A flawless, colorless lab-grown diamond still retains its hardness, optical properties, and brilliant sparkle regardless of origin.
Additionally, as demand for lab-grown diamonds grows, their availability becomes less influential on price versus actual diamond quality grading. It's reasonable to anticipate lab-grown diamonds achieving higher resale rates similar to natural diamonds as the market further develops and matures.
4. Demand for Lab-Grown Diamonds Rises
Encouragingly for lab-grown diamonds, recent demand trends indicate the market is strengthening. According to industry analysts, the lab-grown diamond market size has increased by about 20% each year from 2015 to 2020. Lab-growns now account for an estimated 10-12% of total diamond jewelry sales volume in the United States.
Additionally, advanced analysis shows Google searches for lab-grown diamonds increased substantially in 2020 while natural diamond queries decreased. Consumers are increasingly choosing lab-grown diamonds over mined ones due to their environmental friendliness and affordability.
5. Lab-Grown Diamonds Impact Market
As lab-grown diamonds become more popular, they will change the diamond industry. Lab-grown diamond producers compete with traditional diamond miners, requiring both to adapt. De Beers, the mining giant, launched Lightbox Jewelry in 2018.
Additionally, many independent jewelers sell natural and lab-grown diamonds. Lab-grown diamonds will become mainstream if larger retailers follow suit. More exposure and demand for lab-grown diamonds have strengthened resale marketplaces where clever sellers may receive fair prices.
Lab-grown diamonds are a viable, eco-friendly alternative to real diamonds, which have higher resale value due to rarity. Lab-grown diamonds and numerous resale alternatives make their artificial origins less important in secondhand market performance.
A mature market and rising ethical and economic popularity will boost lab-grown diamond resale rates. Currently, natural diamonds are more resellable than lab-grown ones, but both can be good residual assets for careful buyers.