No One Needs to Know You Saved Money by Buying a Used Engagement Ring
Boy meets girl. Boy courts girl. Boy gives girl a diamond ring, and they live happily ever after. Well, not always.
Sometimes, the fairytale doesn't end so well, and someone is left with a valuable stone full of painful memories. The website I Do Now I Don't was born of just such a heartache. Founder Josh Opperman explains that when his engagement ended, he tried to sell the ring and move on — and was shocked at how little he could get for the ring that originally cost around $10,000. He created I Do to be a marketplace for people in the same situation to connect directly with buyers about to take the plunge, thus cutting out the middleman and facilitating sales that benefit everyone involved. So how does it work? And what kind of deals can you get if you're looking to buy an engagement ring?
How I Do Now I Don't Works
An online auction site, I Do allows sellers to post free listings for their used engagement ring. Buyers bid directly to the sellers and when a seller accepts a bid, he (or she!) ships the ring to the company's New York offices, while I Do holds the payment "in escrow." I Do's independent gemologist examines the ring, and if it is as advertised, the transaction goes through. If not, either the ring and payment are returned, or the terms are renegotiated. I Do collects a 15% commission for completed transactions, but will cover the costs of escrow and return shipping if a deal falls through.
Because of this holding period, the site claims to offer a safer and more valuable way to buy and sell pre-owned rings. But does I Do really offer advantages over traditional retailers and other auction sites?
The Value of a Used Engagement Ring
If you're looking to sell an engagement ring, you can forget about recouping what you actually paid for it; the ring is only worth what someone is willing to pay for it now. Original rings are typically purchased with sizable markups on top of wholesale costs, though actual jewelry retail markups vary widely. Opperman's own experience entailed a $10,000 ring that cost the jeweler $3,500 wholesale, which is a whopping 185% markup. Forbes's markup estimates are more modest, claiming that most retailers only insist on a 20% to 50% markup.
For the sake of comparison, let's assume that markup falls somewhere in the middle: about 100%. Therefore, reselling, say, a $5,000 engagement ring to a traditional retailer will likely net much less than $2,500 because jewelers are unlikely to pay more than the ring's wholesale value. But I Do claims that its services help sellers recoup 40% to 75% of a ring's original cost, or at least $2,000 — and up to $3,500 — for the same $5,000 ring. With estimates like these, both parties can benefit: for-sale pre-owned rings means prices that are lower than retail, even if the seller is charging above wholesale.
Selling a Used Engagement Ring: A Comparison of Costs
To examine the real world cost of reselling a used diamond ring, let's look at a more concrete example. On I Do, a 1.01ct princess cut diamond solitaire mounted on 14k white gold is available for $4,500. At Zales (representing a more traditional, brick-and-mortar retailer), creating an almost identical ring costs $10,175. If we assume that to be the estimated retail value of the ring, we're looking at a 126% markup over the I Do asking price. But at the same time, at BlueNile, we designed almost exactly the same ring (down to clarity and color) for $5,844. That's almost half the Zales price, and just a 30% markup over I Do. The range of prices for rings is clearly huge, and what a seller paid for a ring affects what they'll ask for it — but buyers might expect different price points.
If an owner originally paid about $6,000 (or close to the calculated BlueNile price) and can recoup $4,500 by selling it on I Do, then the benefit is a no-brainer. Even after I Do's 15% commission ($675), the seller will net $3,825, or 65% of what was originally paid. But if the owner originally paid over $10,000 (or the Zales price), that $3,825 is only 38% of the ring's original value. However, $3,000 may still be greater than what retailers or pawn shops would offer.
On the other hand, eBay charges a mere 10% commission on the final value of its sales, and a maximum of $250 per transaction. Here a seller could potentially walk away with $4,250: 73% from the $6,000 BlueNile price or 41% of the $10,000 Zales price. What's more, eBay offers a similar secure buying and selling service via Escrow.com, where monitoring a $4,500 transaction costs $146.25. This fee is generally paid by the buyer, and thus does not diminish any return on the resale value of the ring. Escrow.com also verifies the buyer's payment for the goods and alerts the seller of the sale; the seller then ships directly to the buyer who has a certain number of days to either accept or reject the item. If the buyer accepts, Escrow.com releases the payment to the seller, but if the buyer rejects the item, he's responsible for return shipping.
Buying an Engagement Ring: What's the Best Option?
Now let's say you're buying that same princess cut solitaire from the above scenario. I Do obviously offers the better price compared to purchasing a brand new ring, although BlueNile sells a new, unworn ring for not much more. eBay doesn't offer a clear comparison for our example ring, but has a large selection of rings for a range of prices.
Beyond its price tag, buying an engagement ring online requires a certain shopping environment. I Do, BlueNile, and eBay each offer search experiences that may influence the sale and purchase of a ring. For example, eBay has a search option that allows you to review rings that have already sold, which offers a better sense of what consumers are actually paying. BlueNile boasts the build-your-own engagement ring feature, and also displays "recently purchased" rings and their accompanying prices. On I Do, shoppers can search for the specific qualities of the diamond they are looking for (carat, color, cut, clarity, shape, and price range), thereby generating a side-by-side comparison not available on more generalized marketplace websites.
Is It Worth It?
Buyers who want a small budget to go as far as possible in the bling department should definitely check out I Do. If you don't mind not seeing the ring in person, sites like I Do can be full of amazing pre-owned deals. For sellers looking to unload a used engagement ring, there's little risk in creating a listing on I Do since it's free, and it may result in a buyer willing to pay more than a pawn shop or a traditional retailer.
So what do you think, dealnews readers? Would you ever propose with a used engagement ring? Would you tell your significant other that it was "pre-loved?" Or, alternatively, would you consider selling your valuables on I Do in hopes of recouping more of the ring's initial cost? Sound off in the comments below.
Photo credits top to bottom: Easy Weddings,
The Diamond Authority, How I Got Engaged, and Grooms Advice