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My Bottom Line Recommendation
I strongly recommend reading the full article below; however, if you are here for a quick brief, here are the key points you must know about lab-grown diamonds’ resale value:
- 99% of the natural and lab diamonds do not hold “good” resale value. Do not expect to maintain a good resale value unless it’s an extremely rare diamond ($50,000 and higher)
- Natural and lab-grown diamonds drop 40%-60% of their value the second you pay for them.
- Buy natural and lab-grown diamonds exclusively from reliable retailers with a good reputation, such as the one mentioned here. If you overpay or get scammed, you will lose your resale value from the beginning. Obtaining a fair retail price can increase your resale value by up to 20%
- Buy your diamond from trustworthy retailers such as this one that provides a lifetime upgrade program and 100% credit for the original purchase price. This will help you avoid losing any resale value.
- Do not think about resale value at all. When buying a diamond, focus on the sentimental value rather than the resale value, as it is typically a relationship investment rather than a financial one. Moneywise, a Rolex or gold can bring you a higher ROI. Focus on love, my friend 🙂
- Ultimately, buying a natural or lab-grown diamond should be based on individual values and priorities, considering cost, environmental impact, personal values, and what will make your significant other happy.
Test yourself: Is this diamond natural or lab-grown?
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Table of Contents
Introduction
As the popularity of lab-grown diamonds continues to rise, more and more consumers are considering them as an alternative to natural diamonds. However, one question often arises is whether lab-grown diamonds hold their value over time. In this article, we’ll look in-depth at the resale value of lab-grown diamonds, so you can decide if they are right for you.
Understanding Diamonds Resale Value
One of the biggest arguments against lab-grown diamonds is that they have no resale value, unlike natural diamonds. But is this really true? Let’s take a closer look at the resale value for natural diamonds:
Ways to get your money back for natural diamonds
- You can sell your natural diamond on websites like wpdiamonds.com and worthy.com. In the best-case scenario, if you purchased your diamond from a reputable retailer at a fair price, you may get up to 60% of the retail price back. On the other hand, if the original price was a rip-off, or you decide to sell it to a pawn shop, you’ll end up with a lower return, typically getting back around 40% or less of the diamond’s value.
- Suppose you purchased your diamond from a reputable retailer like this one that offers an upgrade program. In that case, you receive up to 100% credit for your original purchase when upgrading to a new diamond. This means you can upgrade without losing money on your original investment, depending on the retailer’s policy.
Remember, diamonds that share the same attributes also share similar resale values. If you originally overpaid for your diamond, you will lose more when you resell it.
For example, a 1.00 carat GIA E VS1 with Triple X cut and no fluorescence is sold for $8,120 on James Allen. In contrast, an identical diamond on Brilliant Earth is sold for $8,350. Meaning you lose $230 instantly in resale value when paying more for the same grades.
James Allen: 1.00 Carat E VS1 for $8,120
Brilliant Earth: 1.00 carat E VS1 for $8,390
Lab-grown diamonds resale value
Lab-grown diamonds are often criticized for having zero resale value compared to natural diamonds. However, let’s assume the skeptics are right. How much would we have to pay for a 1 carat E VS1 with triple x if we buy a lab-grown diamond?
On James Allen, such a diamond is sold for $1,500. We already made the calculations and found that reselling a similar natural diamond involves a loss of $5,240 if bought from Brilliant Earth and $4,872 if purchased from James Allen.
Therefore, not only can we save $3,372-3,740 by buying a lab-grown diamond that shares the same attributes as a natural one, but we also can only lose the $1,500 we paid. Even if lab-grown diamonds held zero resale value, we would still lose less reselling them than a similar natural diamond.
However, the assumption that lab-grown diamonds have no resale value is untrue. A quick search on eBay can expose the large market of used lab-grown diamonds.
Same as with natural diamonds. If retailers can buy from you a used lab-grown diamond for half the price and sell it for a profit, why wouldn’t they do that? That’s a pretty good business.
But it’s not all. If you purchase a lab-grown diamond from James Allen and later decide to upgrade it, you’ll get 100% credit for any replacement diamond of at least 2X or greater value. This means that if we bought this 1 carat E VS1 for $2,030 and wanted to upgrade it later, either for a new natural or a lab-grown diamond, we wouldn’t lose a dime from the first investment.
In conclusion, lab-grown diamonds may hold less resale value than natural diamonds. Still, the assumption that they have zero resale value is not accurate. Additionally, buying a lab-grown diamond can save you money in the first place, and upgrading it later won’t result in any investment loss.
The Growing Demand for Lab-Grown Diamonds
According to a recent report by Bain & Company, the lab-grown diamond market is expected to reach $15 billion by 2035, representing a significant portion of the diamond industry. This growing demand for lab-grown diamonds drives up their resale value, making them a more attractive investment for consumers. Interestingly, when shown the price differential between lab-grown and mined diamonds, consumers are more likely to prefer lab-grown diamonds.
A survey conducted among consumers who recently shopped for an engagement ring or wedding set revealed that:
- 70% of millennials consider buying a lab diamond for an engagement ring
- 36% of respondents agreed to exceed their original budget for a larger lab-grown diamond.
- Among those who had shopped for and purchased an engagement ring or wedding set, 46% were shown a lab-grown diamond while shopping.
- Of those not shown a lab-grown diamond, 87% said they “may or definitely would have bought” a lab-grown diamond if it had been presented to them.
In addition, 46% of jewelry retailers selling lab-grown diamonds reported that lab-grown diamonds are “absolutely” taking business away from their mined diamond business. These retailers are also highly satisfied with their decision to sell lab-grown diamonds, with 87% indicating satisfaction.
These findings suggest that the lab-grown diamond market is on the rise, with increasing demand and resale value, and more consumers are open to purchasing lab-grown diamonds as a smart and affordable investment option.
Should You Buy a Natural or Lab Diamond?
Whether to buy a natural or lab-grown diamond ultimately depends on personal preference and values. My personal experience shows there are three logical options you can make:
- You can buy a natural diamond.
- You can buy a lab-grown diamond with the same attributes and save around 70% of your money.
- You can use your entire budget and get a much larger and more beautiful lab-grown diamond with a higher cut, color, and clarity.
Natural diamonds hold sentimental value for some people due to their rarity and long history of use in engagement rings and other jewelry. On the other hand, lab-grown diamonds offer an eco-friendly and socially responsible alternative that can be just as beautiful and durable as natural diamonds.
Regarding resale value, natural and lab-grown diamonds can lose a significant amount of their value when sold. However, lab-grown diamonds cost less than natural diamonds, so the potential loss may be less significant. Additionally, their resale value may increase as the market for lab-grown diamonds grows.
Ultimately, deciding between a natural or lab-grown diamond should be based on individual values and priorities. It is essential to thoroughly research and consider cost, environmental impact, and personal values before purchasing.
Are lab-grown diamonds worthless?
The argument that lab-grown diamonds are worthless has been circulating for some time. It’s based on the idea that the manufacturers can produce as many lab-grown diamonds as they want. I’m sorry to burst the bubble. The natural diamonds market is also extraordinarily centralized and controlled by mainly three large companies.
We need to remember, at the end of the day, all businesses want to make money. Even if they control the supply chain, they will ensure the product holds value; otherwise, customers will not buy it.
It’s essential to understand that the value of a diamond is not solely based on its resale value. While it’s true that some lab-grown diamonds may not have a high resale value, this is also the case for most natural diamonds. The sentimental value of a diamond can be priceless, which is why diamonds have been a popular choice for engagement rings for centuries.
Why Are Lab Diamonds so Cheap?
Lab-grown diamonds are a cost-effective alternative to natural diamonds because they are created in a lab using modern technology rather than being mined from the earth. The process of mining and refining natural diamonds is time-consuming and expensive, which increases the final product’s cost. The rough diamond goes through numerous hands before reaching the end customer, increasing prices.
In contrast, lab-grown diamonds can be produced in a few weeks, with lower labor-intensive production processes and lower costs. Moreover, because lab-grown diamonds are a comparatively new market, an oversupply of diamonds is present, which drives prices down even further. However, prices may also rise as the demand for lab-grown diamonds grows.
It’s worth noting that the old supply of lab-grown diamonds doesn’t match the quality of the new supply. As anticipated, technology is evolving, improving the quality over time. So, even if you come across an incredibly cheap lab-grown diamond, it may not be a good deal.
F colorless lab diamond with no tint
Low quality F grade that shows a strong blueish tint
Conclusion - My personal experience with lab-grown diamonds resale value
It’s not a coincidence my website is called “Lab Grown Diamonds Review.” I cater to both natural and lab-grown diamond buyers. However, my two primary audiences are those who have already decided on lab-grown diamonds and those who are still exploring their options and want to ensure they’re making the right decision.
Since starting my business in 2018, I’ve noticed a significant shift in the diamond market. Previously, only one out of four clients would ask me specifically for lab-grown diamonds. Still, today, around 60% of my clients choose lab-grown diamonds over natural diamonds.
This trend isn’t limited to my business. The largest diamond companies in the world, like James Allen and Blue Nile, are now leading the lab-grown diamond niche, indicating that buying lab-grown diamonds is no longer a taboo subject. Smaller websites like With Clarity and Clean Origin are also growing. More lab-grown diamond-focused retailers are entering the market, demonstrating a growing demand for these types of diamonds.
I understand that some customers value the sentimental value of natural diamonds. In contrast, others may prefer lab-grown diamonds for their impressive size and affordability. Ultimately, the decision should be based on what is best for your loved one. I’m here to show you all your options and help you make an informed decision before investing your money.
Regarding resale value, it’s important to remember that, in most cases, natural and lab-created diamonds will lose value over time. The actual value of your investment lies in the love and relationship you share with your partner. So, focus on what makes them happy, and don’t let resale value be the sole determining factor in your decision-making process.
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