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No merchant will give you full value (also, why sell diamond dust? It's a crafting resource with zero weight. Not worth selling until you are max level with a full set of end game gear).
Different merchants will give better prices based on the item (blacksmiths pay more for swords, alchemists for alchemical ingredients, etc.).
As for why I'd sell diamond dust... I've still got my original silver sword and one unit of diamond dust would let me afford a far better one!
There should be little need to purchase armor or weapons from vendors. You should focus on purchasing recipes for crafting or alchemy rather than purchase overpriced goods.
Once you get off the ground, around lvl5, you should be able to start using crafted gear. My priority is always to have up-to-date weapons, both steel and silver. I do not craft new armors whenever minor upgrade is available because it seems to be waste of materials. One piece of armor that is extremely powerful in my opinion are Assassin's gloves-they provide 10% increased critical chance.
Once you get to lvl15+, you should be able to use exclusively witcher's gear, which should be best in slot in most cases. You should never sell or dismantle withcer's gear even if it is outdated because you will eventually be able to upgrade it, for which you need basic item and some additional crafting materials. Example of my sword/weapon progression: random looted sword >> master/magic looted sword >> Viper sword >> random relic sword >> Griffin sword >> random relic sword >> Feline Sword >> upgraded Griffin sword ...etc.
Same with the various sea shells, giving either pearls or black pearls.
Id really recommend not buying weapons. Almost all of the good weaponry comes in the form of unique relic weapons, which are typically found scattered across the world and not at merchants, or from Witcher gear.