How to sell
A commonly asked question from investors regards the liquidity of pink diamonds. In a nutshell, investors want to know how resalable their diamond portfolio is, and how to go about selling when they’re ready.
Rare pink diamonds are among the most liquid and sophisticated markets for any collectible asset.
They can be transported quietly and legally and sold globally in most major cities. There are thousands of participants in the market, from collectors & investors to dealers and jewellery buyers.
However, coloured diamonds are similar to real estate, in that they may take time to find the right buyer. It is considered a decentralised market as there is not one centralised exchange or market where the majority of transactions take place.
When you do want to sell, start the process at least 90 days before you would like the money. This will give you, your broker, auction house, and any other party you are working with the chance to find the right buyer. In this, again, coloured diamonds are similar to real estate.
As with property, auction houses tend to be the preferred method of sale for realizing full market value due to the greater exposure to a wide range of potential buyers that these auction houses provide. While auction houses will market the truly one of a kind pieces, they also handle more moderately priced pieces that have inherent rarity and natural beauty, particularly rare pink diamonds. These pieces also sell particularly well and have shown that they can sell well above estimates. The minimum offering prices they accept are in the range of USD 5,000-10,000 with top lots selling for millions. Thus, they provide an excellent selling outlet for investors at all levels of the market.
The auction houses will charge a percentage of the selling price, depending on the value of the sale. The higher the selling price, the lower the commission price will be. Generally speaking, this commission is negotiable and ranges from 0-10%. However, the auction houses have the advantage of getting the kind of exposure that brings out buyers through their global marketing efforts and extensive list of wealthy clients.
Also of note, auction houses big and small have come leaps and bounds over the past few years in terms of making auctions more accessible to a greater number of investors, with bidders now able to easily bid online at live auctions all around the world. For example, when Sotheby’s started using eBay technology to power their auction platform, they reported 40% more global participation on the first round.
Experts agree that auction sales will continue to grow as new buyers in Asia, the Middle East, Europe, and North America learn to appreciate the rarity and beauty of coloured diamonds. HSBC Private Banking has already worked with Sotheby’s on several auctions in the UAE, and major European private banks are advising their customers on rare coloured diamond purchases. As wealthy global investors are introduced to the benefits of investing in coloured diamonds, the auction houses will continue to see new record prices and strong sales for fancy coloured diamonds.
Another excellent way to sell is to use a specialized broker such as Australian Diamond Portfolio. A broker will market your stone at an agreed market value, either for a fixed fee, or for a fee based on a percentage of the final sale price if and when sold. Brokers often have extensive databases of clients with which to work, and often know which clients may be in the market for a particular type of stone.