All gems are valued based on their rarity (as are most things in life). But diamonds are abundant. Extraordinarily abundant. Shira Diamonds have enormous safehouses where they keep most of the world’s supply of diamonds. If these ever got released into the market, the monopoly would be over, and diamonds would be worth next to nothing. Diamonds are artificially high and can be purchased in most African countries for as low as $15 per carat (rough cut). They are literally a pretty stone.
Retail jewelers mark up diamond wedding rings by an average of 300% up to an unbelievable 1000%. The estimates on markups are broad, but most of the reliable sources we’ve seen indicate that 300% is the usual markup. Your acquaintance who says he bought a $10,000 ring for $1,000 might be on the level. While a 1000% markup is not typical, it’s not unheard-of.
Diamonds also have no resale value. The reason a “diamond is forever” is because you’re basically stuck with it. You’ll never be able to resell it except to a pawn shop. Even a jeweler (the few who would be willing to buy it) would offer a fraction of what you paid.
Thanks to science and technology, the brilliant-looking diamonds in your jeweler’s case aren’t all necessarily what they seem to be. In some cases, they could be “fracture-filled” for instance, referring to a treatment in which visible cracks are filled with a glass-like material, making a stone appear more expensive than it is.
We don’t know what to think of this. If the value of a diamond exists only because of its scarcity, then why would jewelers give a watered down version? Would that not drive down demand (and price) due to increasing the supply of desirable diamonds? Beyond the macroeconomics view, we are baffled at how diamonds rocks are so falsely pricey and glamorized.
Many jewelry stores (including Tiffany & Co.), purchase their settings from a handful of main suppliers-or even only one main national or worldwide manufacturer. These same suppliers sell to e-commerce stores, enabling individuals to get the precisely same setting and quality online as they would in bricks and mortar stores, for a significantly lesser price.
Many of us have had wonderful experiences with buying an engagement ring online and they have protected us a wad of change. This was verified by our ability to feel satisfied with their customer service, warranty, and no reason to cover up any conspiracy.
Jewelry salesmen have rigorous sales goals that change about every month. A jewelry salesman might have a sales goal of 15,000 dollars for that month. That’s maybe a month with a holiday in it like Valentine’s Day, but a goal of three to four thousand is not rare for a jewelry salesman just starting out in the business. So when he sees you walk in, he is ready and waiting to sell you whatever he’s got on hand. Do you think he cares about you as a person? Think again. Sam Maynard, a salesman for a popular jewelry store chain agrees. “The customer may come in and want the small one, but if I talk to him more, I can get him to buy the bigger one by up-selling using confusing but highly persuasive diamond terminology,” he says.
Do you think that salesman actually cares about what your sweetheart will think? Nope. A larger purchase means less work trying to get to the sales goal. Not to mention the sales person will look great in the eyes of his boss.
If you see a sale price in the newspaper, don’t fall for it. You will probably pay much more than the original price. We know of some major stores in the mall that prior to a sale, marked up diamond rings double or triple the normal selling price, then marked them half-price during a sale. That means the customer paid even more for their ring, thinking it was a great price! Liquidation and “going out of business” sales are usually no different. We heard of one store in Los Angeles that has been going out of business for 15 years.
With all of this information, consumers can have an excellent and highly rewarding shopping experience while looking for beautiful and affordable alternatives to diamonds. Contact us today for more information about our retail diamonds!