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Article: Why Do Retailers Charge So Much For Diamonds?
Why Do Retailers Charge So Much For Diamonds?
Rare, gorgeous, and expensive. These are some of the thoughts that cross one’s mind when they hear the word “diamond.” Rare and gorgeous are absolutely correct. However, diamonds don’t have to be expensive. It’s all about getting a great value for the amount of money you spend. One way to accomplish this is to buy wholesale as opposed to retail. Diamonds don’t become expensive until the last phase…when a retail jewelry store marks them up incredibly. We will take a look at this as well as how diamonds obtain their initial valuation.
Diamond prices depend on many factors. For one to buy a diamond at a reasonable price, the rare nature of the stone must be understood. Did you know that over 200-250 TONS of dirt has to be sifted through before 1 ct TOTAL of rough diamond is found? The first imminent factor which determines the price of the diamond is the painstaking process it undergoes from mining to mounting. We will explore why this process can be so costly, but why jewelry retail stores inflating them so incredibly is unnecessary. The following factors have led to their cost to the wholesaler, but at what point does it become exorbitant to multiply these costs to the consumer?
1. Mining
Diamonds don’t start off in the sparkling and dazzling form you have undoubtedly seen somewhere. You can imagine the vast costs, labor, and equipment it takes to unearth something that takes on average over a billion years to form. Only 20% of all rough diamond that is mined will actually fall into the category of gem worthy. The remaining 80% is used for industrial purposes. Diamonds are mined in rough form and have an irregular shape, which is what you would expect from digging them out of the ground. To be refined into the shiny finished product you are accustomed to seeing there are many steps involved.
2. The Process of Manufacturing Diamond From the Rough
The process of cutting and refining the rough diamond involves many steps before it’s unveiled in the market. This plays a part in the costs associated with this level of the supply chain that are in turn passed down to the end consumer. This process is one that requires extremely skilled labor and oversight as well as a lot of energy and expensive specialized tools to assist in cutting. This cost is transferred to the end price of the stone.
3. Certification and Authentication
Diamonds cannot be sold carelessly in the street or exchanged through back water channels. They require a standard location to process and certify each. Without proper certification, known as the Kimberley Certificate, the providence of each stone may be unknown and lead to supporting organizations or countries who do not follow best practices for mining. This process is expensive to undertake and is also considered a major part of the cost in each stone.
All diamonds pass through relatively the same supply chain and bring a very standard cost to each outlet that sells them. If everyone has a similar cost per stone, then why do jewelers buy them in bulk and charge their customers so much more? As a consumer trying to extend buying power, it would be wise to consider a local jeweler who has your budget and life-long loyalty in mind. When you buy wholesale as opposed to retail, you are ensuring you are getting the greatest value and best diamond ring your money can buy.
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