2 things to think about when buying your diamond – After visiting JCK 2015! Diamond Answer Man S4E2

by Admin

News First

  • Jewelry and Diamond Sales grew over last year! US buyers still buy more diamonds than any other country.
  • 2/3’s of all online sales are made by Brick and Mortar stores.
  • No new diamond mines – Out of 7000 pipes only 60 are producing and only 10 are big producers.
  • Diamond production is going down -nudging De Beers to alter its mining methods to extend the life of the mine and maintain profitability.


#1 The diamond industry is struggling for your business!

Rough buyers who polish diamonds for sale to wholesalers and retailers are complaining that the going rate for polished diamonds is too low! Making it impossible to stay in business. The banks are charging higher rates for loans – Indian polishers are folding because they use the loans to purchase rough and then polish to sell through to the wholesale market – *Problem, the current margins on polished diamonds are not profitable for them and they are just closing up shop.

What does this mean for you??

Well, if you are in the market right now – there are some deals to be had! It also means that prices will go up in the near future. I have been saying for about 4 years now that prices on the wholesale market are low and in some cases have been dropping. This will turn around and you will see movement in the other direction.

Philippe Mellier CEO of De Beers gave a talk at JCK 2015, which I had the pleasure of hearing and this is what I took from it! De Beers only controls about 1/3rd of the market and they are not  going to go out of the way to help businesses that show no effort to improve processes in mfg and or aren’t using GAAP standards with their financials. They are not going to support the other diamond groups that produce the other 2/3rd’s of the market by Marketing and Advertising generic diamond products to boosts sales overall.  Makes sense to me!

Your Diamond Brand

Why does this matter? Well for those who will not opt for improving processes, accounting , creating their own marketing and advertising its near the end of the line. For those De Beers Suppliers of Choice (sight-holders) who make the needed changes and add value to the diamonds they produce – De Beers has a division that may help with financing rough purchases. Overall what does this mean for YOU the groom to be. Prices are going to go up! By adding value they mean increasing value perception in a way that increases margins. Forevermark is a prime example that its possible… This De Beers brand is only available to select dealers.  The diamonds they select must adhere to a minimal set of parameters to receive the Forevermark designation. There are many generic diamonds in the world that are far higher performers in the beauty arena – However, US buyers are eating this brand up and paying the premium for it.  This tells us that US buyers are BRAND conscious and are willing to pay a premium for it. Which in turn tells De Beers that polishers are not paying attention. Brands sell in this case even if there isnt a big difference. Is the Forevermark worth it?? Well from an appraisers perspective of insurance valuation – Yes, You can only get Forevermark from a Forevermark dealer, much the same way you can only get a Hearts on Fire from an HOF dealer, or a Tiffany diamond from Tiffany.  Overall brands carry a premium because of what they stand for or mean to you.

I think two things are going to happen – the polishers not making money will leave the industry and prices will go up. This will happen not because the weak polishers can’t compete but will happen because polishers will be forced to refine and innovate. I wouldn’t pay more for a generic diamond unless it performed better. But, I would pay more for something different!! Add meaning, purpose, and what it stands for – Now I have a brand!

Names don’t make a brand. Brands make a name!

If you are going to buy a diamond and would like some help in making the right decision – Give me a call! 803-792-1326 or contact me using the speak-pipe app to the right of the DiamondAnswerMan.com site. I would love to hear from you! and no, I am not going to sell you anything! I just enjoy helping – It allows me to give back to the industry that has given so much to me!

 #2 Diamond Labs who produce bad reports – just plain stink and should be put out of business.

During the JCK show I attended the Diamond Grading Conference.

What a joy to my ears this conference was! Finally, more and more people are talking about the issues of bad labs producing fraudulent reports. I was excited to hear as well as surprised that the FTC guidelines assume a diamond associated with  GIA terminology is supposed to be graded using GIA standards. However, its always better to get it in writing!! Why?? because diamond labs disclaim their liability. The only recourse you may have is with the Jeweler who misrepresented the diamond. Do not become price blind and buy a diamond with a bogus report. Make sure that they state the system and standards on the receipt.  And/ or use the Diamond Buying Agreement that is a free download on the DiamondAnswerMan.com site.

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