Diamond Answer Man – Episode 22.
The number 1 Way you don’t get what you want is by loosing focus.
Remember what you want and what you spend are related – but not the same.
Many years ago I worked for a diamond polishing company. We had a full division dedicated to selling to wholesalers – who in turn sold to jewelers. We also had a division that worked directly with retail buyers by appointment only. During my many years there I ran into some very unique situations dealing with grooms to be shopping for engagement rings. I experienced what I call “price blindness”. It is a case where they buyer “the groom to be” has lost all focus on the engagement rings meaning and turned all emotional energy into receiving the lowest price. This emotional break in the process creates some very interesting and weird outcomes.
1. Shock from the buyer – through buyers remorse
2. Shock from the recipient – it isn’t what she thought it was.
3. Or Conversely and strangely rabid fans.
What usually occurs it the buyer shops and shops until he finds someone who will give him the price that he perceives is the lowest quote from anyone he has shopped.
He ends up with something he didn’t want – however he doesn’t know it yet. It will come sooner or late and denial or frustration sets in.. Don’t fall for this make sure you stay focused and buy from someone with Personality, Enthusiasm and Integrity or PEI “PAY” for short. – Yes I made that up! But its fun isn’t it?
Here is the scenario..
Bob goes to several stores but stops with Jeweler Joe and really likes what Jeweler Joe has to offer. However, Bob is very concerned he’s not getting a good enough deal – though Bob has been to several stores and he pretty sure Jeweler Mikes price is right and his service sounds good too. Bob decides not to buy today from Jeweler Mike because he knows he can find a better deal. He ends up visiting Jeweler Jane and buys a diamond that appears better than Jeweler Joe for the the same price.
Here is an example of two diamonds with reports from GIA and EGL USA.
The EGL report is a color grade higher.
This makes Jeweler Janes offer appear better than Jeweler John.
(THESE ARE ACTUAL STONES I SENT OFF)
In the end – the problem lies with our feelings.
Unfortunately what most people want is an appraiser to validate their savvy buying decision.
If an appraiser accurately values an item at what you paid for it – the illusion of the deal isn’t there.
Don’t become price obsessed – if you do – you will start to ignore very important signs of whether or not you should buy from someone.
These are small examples – there are PAPER MILLS out there – that produce laboratory reports that sadly place grades on reports that are falsely inflated – which in turns creates a bigger illusion.
Example Jeweler Jane has a GIA G/SI1 and Jeweler John has a E/VS2 from an unknown lab (or from a known lab name like EGL USA – except is says EGL but this lab is in Turkey, which is not affiliated with EGL USA)
You based upon the extreme value it seems to represent.
Jane’s diamond is 5100
John’s diamond is 5100 (however Jane also had a diamond with GIA report and E/VS2 grade that she offered at 7200)
This appears to you as roughly a 30% savings. And you justify it in your mind by saying – jewelers have high markups and John is wholesale to the public – his overhead is lower – he’s online – fill this with whatever you want.
In comes the appraisal.
Trent – the independent appraiser you hired for 100.00 to appraise your ring – comes up with grade variation (*which he noted on the appraisal) He states that the diamond is associated with a certificate from EGL Turkey (However, in his opinion the grade is G/H, SI1, noting the assessment was done while mounted. Trent gave a split grade because the diamond is not loose – diamond color grades are subject to color influence from the mounting and prongs.
So trent values your appraisal at 6500, the diamond at 5000.00 and the mounting at 1500.
In your mind you just lost 100.00 from your good buy – when in reality you lost nothing and yet gained or “gamed” nothing.
You are frustrated and angry and cant figure the system out – thinking everything is a sham.. When you became price blind you started ignoring all the key signs for who not to buy from. You were obsessed with finding the lowest price and when the appearance of the magical price appeared you pounced now you are angry at the system.
Or better yet you become a rabid fan!
Johns diamond, Jane’s diamond – you by John’s steal of a deal and John provides you with appraisals for your ring. He has values on the diamonds at 10k – (these appraisals may come from his store, an appraiser or a LAB that is also offering appraisals, EGL and IGI are labs that offer these appraisals though there are many smaller ones that do too.)
Ok so know you think you received an even greater steal – your valuation shows that the find is a 4900 dollar savings.
You now think that Jane is crazy – and that John must have a special connection with John – because John gives you his special pricing. – Do you see the insanity! Johns diamond is still only worth 5100.00 and he gave you no deal.
In fact he preyed upon you price blind obsession to earn your business.
Now comes the insurance.
You insurance the ring at the appraised value of 10k.
You pay a premium on the extra 4900.00 – of which you will never see a return if there is a loss. For most insurance the insurance company will only replace the diamond and replace it at the price they will buy it for. All the while pocketing your extra 4900.00 in premiums which est estimated to be about 50.00 per year. You are unlikely to experience a loss.. so as long as you insure your item you are doubling your insurance payment.
DUH – you wanted to pay less – now you are paying more! Don’t be price blind and dont look for false validation of your purchase.
If a jeweler sells you something – in most cases they should produce a valuation for what the sold it for. (Jewelers should not provide appraisals with their retail sale, this is another topic)
Find an independent unbiased appraiser for your insurance replacement.
Always protect yourself! Remember this purchase should always be something you are proud of – It memorializes or symbolizes a special moment.
Call me with any questions
J. Christopher Guritz