OUR RE-MARKETING PROGRAM
OUR INDUSTRY LEADING RE-MARKETING PROGRAM
Natural color diamonds have historically doubled in value every four (4) to five (5) years at the wholesale level. As we warrant and represent that our prices are the least expensive anywhere, we offer a straightforward, no-nonsense re-marketing program that is not offered by any of our competitors.
Every diamontaire, jeweler, dealer and broker in natural color diamonds is in the business of selling diamonds. They are not in the business of re-purchasing their clients’ diamonds unless they are repurchasing them at a steep discount from the original price, nor are they in the business of re-marketing their clients’ diamonds. Their primary interest is to sell their own inventory and not necessarily those of their customers, because their profit margins are higher.
If a client has paid a retail price for their diamond(s), the re-marketing strategy becomes that much more problematic because the potential appreciation of those diamonds does not equate to a 4 or 5 year hold. Potentially, it could take a significantly longer time line well beyond 4 to 5 years for those diamonds to reach their original price or market value. In reality, the market value of any diamond is determined by what a willing buyer dealing at arm’s length will offer to a motivated seller.
We have a totally different outlook; namely, we encourage our clients to come back to us in 4 or 5 years or more at their discretion, to allow us the potential opportunity to re-market the diamonds that they have purchased from our company because had they purchased their diamonds from us, they would have paid well below retail and market price.
How do we do this? Firstly, natural color diamonds that are acquired for investment purposes and not necessarily for aesthetic reasons, are medium to long-term investments. If you are considering the acquisition of natural color diamonds for investment purposes only with a short-term horizon, we dissuade you from making any investment in natural color diamonds.
However, should you have a longer-term horizon and you acquire quality natural color diamonds, history has shown that appreciation of 10% to 20% per annum is not uncommon.
On this basis, we agree to re-market our clients’ natural color diamonds on or after the fourth anniversary date of their acquisitions by listing our clients’ diamonds on our website at a price which is reflective of the appreciated value of the diamond(s), if any. The price so determined shall be in accordance with the market price of similar natural color diamonds offered for sale at the time of listing. Our clients’ natural color diamonds shall only be listed for resale at a market price agreed to in writing by the client and our company. Our company agrees to take commercially reasonable efforts in attempting to sell our clients’ diamond(s) on the same basis that we offer for sale our own inventory.
In other words, the general public (potential buyer) has the same opportunity to purchase your diamond(s) as they would our own inventory.
In addition, we have established a network of international diamond brokers whose sole function is to offer natural color diamonds for sale, whether the diamonds so offered are part of our inventory or the whole or any part of your natural color diamond portfolio.
Once a market price is established, your diamond(s) will be prominently displayed on our website (as if it were our own inventory). In the event your diamond(s) are sold at the said market price so established, once settlement is completed, we shall transfer funds to you forthwith.
We shall have the discretion to offer your diamond(s) for sale at a price greater than the market price so established (the “mark-up price”) in order to compensate us for our re-marketing costs. For the purposes of clarity only, we provide the following hypothetical:
A client purchases a natural color diamond from us on August 1, 2014 for $10,000. On or after July 31, 2018, the client authorizes us to sell and we agree to sell his/her diamond for $20,000. We determine that the diamond has a value of $21,000. The diamond is sold. The client receives $20,000, and our company earns $1,000.
Why do we list the market price at $21,000 using this hypothetical? As we deliver all of our diamonds to our clients at the time of purchase with delivery and in-transit insurance costs borne by us, on re-marketing we must arrange for the re-delivery of the diamond and GIA Certification back to us (courier and in-transit insurance costs to be borne by us a second time). Thereafter we may have to re-photograph the diamond if applicable, and post the diamond and its certification on our website. If the diamond is sold through our network of brokers, our costs associated with salary and administrative costs must be considered. We also have costs associated with the settlement of payment to you (by bank-to-bank wire transfer) and the delivery and in-transit costs necessitated by a sale to a third party buyer.
In essence, if a sale is completed, our client could potentially receive a considerable profit on the transaction and our mark-up price will not necessarily become an impediment to a successfully completed re-marketing transaction.
If you require clarification of any aspect of our re-marketing program, we encourage you to contact one of our service representatives by telephone, email or fax.