Diamond price for the color lower to M

[paul-durand]

Hi,

I'am a diamond dealer.

How to calculate the diamond price for the color lower to M (N to Z)? Is there a % decrease?

For example, the Rapaport price for a 1.00 ct M VS1 round is $3,900 but what is the Rapaport price for a 1.00 ct S VS1 round?

Thank you for your answer.

Paul

 

[paul-durand]

Any answer

I send an email to Rapaport but no answer

Tomorrow I will send an email to the GIA to ask them to delete the N to Z color from the GIA color scale because we can't calculate the price of a diamond between N to Z

We know how to calculate the diamond price only for half of the GIA color scale....

Does anybody know how to proceed to calculate the price of these diamonds?

 

[oldminer]

Just as you negotiate in the trade for D-M, colors or for fancy colors, one learns to negotiate prices for diamonds below M to less tinted than light fancy or Z. One must figure that around Q/R color there begins an upturn in value as some diamonds of that color can be re-cut to fancy colors by expert cutters. Color does not go down in price all the wayto Z, but bottoms out around O/P and then begins its way back toward fancy prices as Z is approached. This is for yellow or brown tints. Pinks, blue or green are another story, of course. You can readily see yellow tint stones below M being offered on many databases, so there is not much mystery. However, it is not safe to go into a market where you have little knowledge or experience.

You are a unique dealer if you want to do away with N-Z. Rapaport will be very uncooperative on this issue. It does seem to be quite an unusual approach you have decided to take.

 

[TitanCi]

You stole the words right out of my mouth, Mr. Atlas. Darn you!!

 

[paul-durand]

Thank you for your answer and for your explanation.

I work in Europe and I never sell a diamond below K color, in my country people buy only diamond between D to I color.

Rapaport publish on the Rapaport Magazine specials indications to calculate diamond prices for 6.00 to 9.00 carats and indications for blue fluorescence diamonds but nothing indications about the color below M.

I search on the Rapnet the prices for a 1.00 carat N VS1 round cut (GIA, AGS, HRD and EX or VG) but the prices are crazy: $2,260 to $3,900 per carat !! A 1.02 carat O VS1 is listed at $6,100 per carat, it's not Internally Flawless, no?

If you search on the Rapnet stones +/- 1.00 carat N to Z VVS2 round cut (GIA, AGS, HRD and EX or VG) you can see that the prices for the U or W are equal or lower than a N color.

 

[Rockdiamond]

Paul- as you have pointed out, the lack of Rappaport pricing in these colors it takes a lot more experience in the actual market to get a true feel, as compared to colorless.
As David Atlas mentioned, these colors are about the lowest priced- so in a sense, there's less importance in the value difference of O-P as compared to W-X, instead of the difference between G and J. The actual dollars between O-P and W-X are insignificant- and other factors such as cut can make an O-P more valuable than a W-X

 

[denverappraiser]

Anything with a market has a value in that market. That fact that Rapaport chooses not to write about very often doesn’t change this a bit. Rap has nothing to do with it.

The GIA scale is describing a difference. OP’s don’t look the same as GH’s. That’s a gemological fact. What you or someone else is willing to pay for it is a matter of negotiation between the two parties. That’s NOT a gemological fact. Why should they change their scale because you have difficulty finding customers and/or setting prices? Trade in them or not as you wish but GIA has nothing to do with it.

Are you serious that you’ll refuse to sell something unless Rap tells you how much to charge? Why?

 

[John P]

Hello Paul and welcome to Pricescope.

How to calculate the diamond price for the color lower to M (N to Z)? Is there a % decrease?

Nevermind Rap. Inspect the diamond. Be sure it was correctly graded, meets your gemological standards for consumer protection and is priced fairly to you. You'll know this when it's in your hands. Build in a modest margin that's equally fair to you and the client. That's the selling price. If your customer agrees to it you both win. If not you still sleep soundly, knowing you did as much for them as possible.

PS: You may want to contact PS Admin and get a "Trade" label on your profile.

Cheers,

 

[distracts]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

 

[diagem]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

Me too

Its just amazing, just take away the Rap sheet from (humbly) most Diamond dealers in the world..., they would have no clue how to value their wares...

 

[Rockdiamond]

I think we can thank the op for an interesting discussion- as opposed asking a serious question.....I apologize if that's a misread OP.
But it s indeed interesting.
Yoram's viewpoint is totally understandable to me.
There is, in some ways, a disconnect between polished and rough diamond prices- and Rap has a lot to do with it, IMO
This relationship has changed markedly over the past few years with the rise in round diamond prices. I think the disparity between rough and polished has gotten even more distorted due to rap over the past few years.
It's hard to buy princess cuts, for example- cutters are only cutting rounds from that rough. This has had to have had en effect on rough prices as well.

 

[denverappraiser]

I search on the Rapnet the prices for a 1.00 carat N VS1 round cut (GIA, AGS, HRD and EX or VG) but the prices are crazy: $2,260 to $3,900 per carat !! A 1.02 carat O VS1 is listed at $6,100 per carat, it's not Internally Flawless, no?

This highlights a key component of using databases like Rapnet or the one here for statistical research. A seller can ASK whatever they want. The per-stone costs associated with listing a stone on these databases and leaving it there until either someone buys it or the world ends is quite low and there is no easy way for a subscriber to tell. A stone can remain listed for years. Asking isn't the same as getting. Unfortunately Rap doesn't have completed sales data, they have only asking prices. With stones where there is a large number of very similar things, that works pretty well but things that are out of the ordinary are much more problematic. At color O, is IF really 'worth' a big premium over VS1 the way is at color F? I don't recall seeing an O/IF that's been sold so I'm not actually sure, but it's not a given.

 

[chrono]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

Ditto this. It's totally mind boggling how someone can be in the industry, yet does not know how it runs, how things are evaluated and priced.

 

[madelise]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

Ditto this. It's totally mind boggling how someone can be in the industry, yet does not know how it runs, how things are evaluated and priced.

Seriously. I think these people are totally just trolling the forums. There's no way OP's a "diamond dealer".

 

[Enerchi]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

Ditto this. It's totally mind boggling how someone can be in the industry, yet does not know how it runs, how things are evaluated and priced.

Seriously. I think these people are totally just trolling the forums. There's no way OP's a "diamond dealer".

There seem to be a lot of posters who have TRADE on their name but ask the type of questions that anyone on the forum could answer, and that someone in the trade should know. Even me ! Not necessarily this particular question, but in general, there do seem to be more new members I've noticed this with. Do people hit "trade" when registering and they don't need to support that? I thought PS had requirements for such a designation.

Or maybe TRADE to some means - electrical? plumbing? general contractor? - and figure that suits?

People vary... (a nod to Kenny!)

 

[John P]

I hope the posts in this thread don't scare Paul away.

I've introduced a lot of trade members to Pricescope. Some have wound up quite happy here. Others check it and say "thanks but no thanks" because they fear writing something that comes off badly, and having their name scorched negatively in internet-stone... Unfortunately, some trade folks who avoid PS are the very people I believe stand the most to gain here.

Regardless of the topic, is it reasonable to hope that this is a community which supports knowledge and learning, on all levels?
I know I've learned a lot here.

 

[paul-durand]

I am consistently shocked by the number of "diamond dealers" who post having no idea about pricing or where to sell diamonds or whatever. If I showed up at my job having absolutely no idea how to do a key part of it, I would not have a job any more.

There is no 1 method to calculate a diamond prices but many methods.

For example: a Rapaport price list analyst can't explain me how to calculate the price of a N-Z color diamond? Do you agree with me that this analyst is not a newbie in diamond trading?

What is the price of a 2.00 carats U VS1 marquise shape GIA certified? When I say "the price", could you give me, of course, the asking price (for a pofessionnal) and the selling price (retail market)?

I invite you to call diamond dealers, appraisers, jewellers (GIA graduate) with the best reputation in your city and ash them their selling price of a 2.00 carats S VS1 radiant shape GIA certified? If you call 20 professionals you must have 20 different prices.

You can also ask to theses diamond dealers a buyback value of a 2.00 carats U VS1 radiant shape GIA certified? Their answer will certainly be very interesting I think that you risk to be shocked too

My last question: what is the average selling prices for a 1.00 carats G VS2 round cut GIA certified (VG VG VG, None) into the retail market (jewellery shop) in USA, in Europe, in China? If you can give me a pourcentage from the Rap I'm very happy

 

[Karl_K]

My last question: what is the average selling prices for a 1.00 carats G VS2 round cut GIA certified (VG VG VG, None) into the retail market (jewellery shop) in USA, in Europe, in China? If you can give me a percentage from the Rap I'm very happy

It will depend on the market, internet? small shop? large shop? Brand name shop?
The answer for one is not useful for another.
Wholesale is pretty easy but retail it depends on the market.

 

[denverappraiser]

Paul,

I second John’s welcoming you to the forum and apologize if any of this seems like an attack. You’re asking questions that surely you know have no ‘correct’ answer but they're right up my alley as an appraiser. I’ll start with a tiny part of the last one because it’s the easiest to get public data. USA is not a homogenous market, much less Europe and China.

1.00-1.05 G/VS2/GIA has 1159 stones in the database here at the moment. The sort is a little hard to do automatically but the cheapest VG/VG/VG cut I see is $5737/ct and the most expensive is $8326/ct. That’s roughly Rap to roughly 35% back. These are retail offers. All are in the US and as far as we know, all are prepared to actually make delivery. This list includes ‘retail’ stores, meaning places with a showroom and a sales staff, but most specialty jewelry stores generally charge more for a variety of reasons. How much more? It ranges from 0 to close to double. $12,000/ct is not out of the question and it is NOT evidence of a ripoff. Neither is it evidence that the $5700 offer above is a particular bargain. We’re talking a factor of 2 difference and that’s on stones where the grade is undisputed and ‘Rap’ is clearly established, well known, and identical for every stone in the list! This phenomena doesn’t just apply to diamonds by the way. You can do this same analysis on clothing, food, furniture, electronics and nearly everything else you buy. Context is tremendously important. Grades outside of what Rap discusses have an even bigger range because they’re considerably harder to shop. A hunt for an S or U color isn’t going to yield anything like that many offers. It may be hard to find a single one, especially if you’re picky about the other attributes. Will it be sold at a ‘discount’ because it’s an unpopular request or a premium because they have the only one available? That’s back to context. ‘Popular’ is not a synonym for ‘better’ but it does have an affect on the marketplace.

I agree that buyback or resale questions can be interesting but that’s yet another step beyond the above. MOST stores won’t buy back your 2.00/S at all. Does that mean it has no value? Does that mean it was a bad buy in the first place? I think not. Buyback policies have a lot of non-gemological components like how much money the store has, how popular the item is likely to be for the, what their existing inventory is like for similar items, how they manage their reputations and even how much they think they can get it for because they think you’re a distressed seller. Selling diamonds is hard, and selling unusual diamonds is especially so, but I think it’s a giant leap to say that this is the fault of the original seller. Diamonds are not a good investment and consumers should not go into a deal expecting to ever see their money again but this does not mean they shouldn’t buy diamonds. Buy them because you love them. They are extraordinarily cool little things.

 

[denverappraiser]

Wholesale is pretty easy but retail it depends on the market.

Karl,

Actually, ‘wholesale’ is a pretty slippery word in this business too. Is it the memo price for a ‘typical’ customer from a ‘typical’ dealer? Is it the cash buy price in bulk from a manufacturer? Bargain channel prices from a dealer who is trying to blow it out? The price found on Rapaport, IDEX, Gemguide or some similar list? Long term consignment with right of return? The range of prices for a particular stone is considerable. A significant fraction of the dealers out there call themselves ‘wholesalers’. Does that make the price they’re charging wholesale?

 

[Karl_K]

Wholesale is pretty easy but retail it depends on the market.

Karl,

Actually, ‘wholesale’ is a pretty slippery word in this business too. Is it the memo price for a ‘typical’ customer from a ‘typical’ dealer? Is it the cash buy price in bulk from a manufacturer? Bargain channel prices from a dealer who is trying to blow it out? The price found on Rapaport, IDEX, Gemguide or some similar list? Long term consignment with right of return? The range of prices for a particular stone is considerable. A significant fraction of the dealers out there call themselves ‘wholesalers’. Does that make the price they’re charging wholesale?

That is true to a great extent, but a price you can buy it for immediately is available in the BtoB wholesale market on the lists you mentioned that will give you a very good starting point.
That does not mean you will get the best deal by doing so but it gives you a starting point.
The problem of retailers calling themselves wholesalers is an issue, but they can be easily rejected in a comparison with a little homework.

 

[denverappraiser]

When I do most replacement type appraisals, I start with 'wholesale' and then modify it to the appropriate market. In this case I use the asking prices found in the B to B lists for comparable because that's usually the best information available but it's a tricky problem. Asking is not the same as getting. On mainstream items it does OK but the more unusual the item the more problematic it becomes. One of the weakness of this approach is that there is no way of telling how long the item has been offered at that price (and those terms), how motivated the seller is and how it's going. For a dealer, tossing out an offer on an odd thing costs almost nothing and if they're willing to wait for someone who 'needs' it to come along, it sometimes even works, but the presence of this offer is not necessarily a good definition of 'value'. Once again, context becomes important.

 

[paul-durand]

I second John’s welcoming you to the forum and apologize if any of this seems like an attack.

No problem with that

Diamonds are not a good investment

Depending of the category of the diamond, if you buy a 5.00 carats F VVS2 round cut in 2005 and if you want to resale it today, the value of this stone is now +159%... it was a good investment, no (better than the exchange bourse) Today in Europe, we have private customers who are interested by diamond investment because the value of the real estates is very high, the exchange bourse is bad, the gold is high and our bank loose -70% of their value since the begining of the crisis... but buy a loose diamond for an investment ok, but what will be the value of this diamond in 5 or 10 years? Our customer ask us if they will get back their money in 5 years, with if possible a gain, what is the good answer: yes or no? If you are a not scrupulous seller you can answer "yes" (because you want to win money immediatly) but if you are an honest seller you must explain to your customer the diamond pricing and you must to explain him which price he can resell his diamond and how resell it... It will be certainly a long explanation... with a final question: what is the good reselling price of my diamond? In europe, exist a "scandal", when a professional (diamond dealer, jeweller, etc...) sell a diamond to a private customer, he calculates his selling prices like that: price from the Rap + gross profit + VAT = total price for the customer. For the resale of a diamond by the same professional, they calculate like that: -40% from the Rap = resale price... if you are this private customer you think that the diamantaires are thieves How is calculated the resale price of a loose diamond in US?

 

[diagem]

I second John’s welcoming you to the forum and apologize if any of this seems like an attack.

No problem with that

Diamonds are not a good investment

Depending of the category of the diamond, if you buy a 5.00 carats F VVS2 round cut in 2005 and if you want to resale it today, the value of this stone is now +159%... it was a good investment, no (better than the exchange bourse) Today in Europe, we have private customers who are interested by diamond investment because the value of the real estates is very high, the exchange bourse is bad, the gold is high and our bank loose -70% of their value since the begining of the crisis... but buy a loose diamond for an investment ok, but what will be the value of this diamond in 5 or 10 years? Our customer ask us if they will get back their money in 5 years, with if possible a gain, what is the good answer: yes or no? If you are a not scrupulous seller you can answer "yes" (because you want to win money immediatly) but if you are an honest seller you must explain to your customer the diamond pricing and you must to explain him which price he can resell his diamond and how resell it... It will be certainly a long explanation... with a final question: what is the good reselling price of my diamond? In europe, exist a "scandal", when a professional (diamond dealer, jeweller, etc...) sell a diamond to a private customer, he calculates his selling prices like that: price from the Rap + gross profit + VAT = total price for the customer. For the resale of a diamond by the same professional, they calculate like that: -40% from the Rap = resale price... if you are this private customer you think that the diamantaires are thieves How is calculated the resale price of a loose diamond in US?

But if you have bought this 5.00ct F VVS2 in the 79-80 I am not so sure you would be happy with your investment.
But both your and my examples are not objective, but do show radical extreme possibilities which may occur anytime again.
How do you calculate value of loose polished Diamonds? Like every other product.
Material cost plus added value component and/or services.
When you have mainstream products..., risk is lower bringing lower yields. In speciality products usualy risk can be higher translating to higher yields (return on your investment).

Rap is just an (unexplained -unproven) pricing platform most professionals use as some sort of starting point. But as we move into the future I believe the Rap list looses its relevancy.

 

[denverappraiser]

A 5 carat F/VVS is WAY outside of the mainstream diamond market but let’s use it since that’s your example. I’ll add an assumption of VG/VG/VG/GIA with fluro below strong. A retail buyer shopping carefully can buy such a stone today at about $250k or so. (there’s 2 in the database right now). Rap is 265,500. I don’t have handy my October ’05 Rap on that stone but October ’04 it was $122,500 so I’ll use that. What’s current consumer resale on a 2004/GIA/F/VVS2? 35% back? That’s doing pretty well. That’s $172,575. That’s a 40% gain over an 8 year hold, and that’s choosing a stone that has the VERY BEST historical return in the industry and it assumes no issues with the cut grading scale that was implemented in 2006 (which is not an inconsequential risk by the way and an investor at the time would have had no way to predict it's coming). It takes some serious luck to get that much and, by the way, selling $250k stones is no simple task for your average Joe. There’s almost certain to be dealer commissions involved that chip away from that ‘profit’ but even without that it's under a 4% ROI. It's slightly better than holding real estate through the crash but, frankly, I'm not impressed as investments go, especially since we're cherry picking the best results using 20/20 hindsight. Do that with the stock market and you'll own the world.

Try numbers on something a bit more mainstream. Say a 1.00 SI1/H/GIA/VG VG VG. Rap in 2004 was 4600 and a fairly typical store would have charged Rapx1.3 or so for it. Designer joints were more, discounters a little less. That’s $6000 cost, plus tax so about $6600 out the door. More in Europe because of the VAT. Today Rap is 6800 on that stone. Secondary market bids are typically Rap-50% or less on this sort of goods assuming no damage in the meantime but, again, let’s make a top dollar sale and say Rap-35% = $4420. That’s a 33% LOSS over the same 8 year span and that's being generous with the numbers. If they can’t get top dollar on resale for lack of market access, lack of skills or time pressure and/or paid ‘retail’ in the first place it’s FAR worse.

 

[paul-durand]

That’s $6000 cost, plus tax so about $6600 out the door. More in Europe because of the VAT. Today Rap is 6800 on that stone. Secondary market bids are typically Rap-50% or less on this sort of goods assuming no damage in the meantime but, again, let’s make a top dollar sale and say Rap-35% = $4420.

Ok, in 2004 a customer pay a 1.00 SI1/H/GIA/VG VG VG $6600 and he can resale it $4420 height years later, but the stone is not damaged, it is not as the car or the clothes that wear out, how to explain at a customer this big difference between the sale price (Rap +30%) and the resale price (Rap -35%) in the case of a diamond investment (the stone was in a safe at the bank)?

Paul

 

[John P]

That’s $6000 cost, plus tax so about $6600 out the door. More in Europe because of the VAT. Today Rap is 6800 on that stone. Secondary market bids are typically Rap-50% or less on this sort of goods assuming no damage in the meantime but, again, let’s make a top dollar sale and say Rap-35% = $4420.

Ok, in 2004 a customer pay a 1.00 SI1/H/GIA/VG VG VG $6600 and he can resale it $4420 height years later, but the stone is not damaged, it is not as the car or the clothes that wear out, how to explain at a customer this big difference between the sale price (Rap +30%) and the resale price (Rap -35%) in the case of a diamond investment (the stone was in a safe at the bank)?

Paul

I would explain that "investment" implications are not practical for buying at retail. The cost of distribution for a single diamond is too high, and there is no established resale-market for consumer sellers. It's a hard fact that trading prices upstream - where millions of dollars change hands in bulk transactions - differ from final showroom prices for individual diamonds downstream where associated costs have accumulated.

I would explain that consumers are frequently surprised by how little a jeweler may offer for a diamond bought in the last year or so: The jeweler must calculate current value less his costs for any repair/improvement, new grading, shipping costs, transit insurance, marketing, desirability and speed of turnover in his business. He might hedge his color-clarity-cut estimates in case grading is lower than expected. Finally he needs to make a modest profit at the end. When he has arrived at that figure he must compare it against his cost for simply buying the same finished diamond outright in his supply pipeline - without the wait of up to eight-weeks for restoration & grading and whatever added time he estimates it will take to turn in his store. These factors can make some over-the-counter offers appear very low in cases where the diamond was purchased within the last several years.

But regardless of the gap described above, diamond values are projected to continue rising in the coming decades. With this in mind, any diamond purchase involving thousands of dollars today has rewarding future implications, even if many years away. And if the next 50 years resemble the last 50 the long-term outlook is very positive. So, while I think buying a single diamond as an "investment" is absolutely not practical, I have several rules for consumers - as it relates to decision-making today - to optimize a diamond's store-of-value in the long-term...but that's another story.

 

[denverappraiser]

That’s $6000 cost, plus tax so about $6600 out the door. More in Europe because of the VAT. Today Rap is 6800 on that stone. Secondary market bids are typically Rap-50% or less on this sort of goods assuming no damage in the meantime but, again, let’s make a top dollar sale and say Rap-35% = $4420.

Ok, in 2004 a customer pay a 1.00 SI1/H/GIA/VG VG VG $6600 and he can resale it $4420 height years later, but the stone is not damaged, it is not as the car or the clothes that wear out, how to explain at a customer this big difference between the sale price (Rap +30%) and the resale price (Rap -35%) in the case of a diamond investment (the stone was in a safe at the bank)?

Paul

How about gasoline? Or lumber? Software? Pharmaceuticals? It’s not a function of things wearing out. ‘New’ clothes being sold by a clothing store are worth many times more than that very same item being sold by an individual. Check out ebay or a garage sale if you don’t believe me. A hot dog is worth more at the ballpark. That’s the nature of the marketplace. Shoppers prefer to buy from dealers than from individuals. Dealers prefer to buy from other dealers rather than individuals. There are some very good reasons for this. Terms and conditions, recourse, financing, ease of logistics and even licenses and legal barriers are examples. It’s not that it’s impossible to make money buying and selling diamonds, I know hundreds of people who do just that including some of my best friends and probably including you. The problem is that there is a skill set going on here that extends way beyond the gemological properties of the stone and ‘investors’ tend to discount that is irrelevant. The retail premium is because the retailer and their suppliers are paid for their time, talents and investment. The resale discount exists for the same reason. The people buying it are taking a financial risk, they’re using their time, connections and expertise. They’re investing their capital, they’re applying their expertise and they want to be paid for that. Both ends are competitive markets and you can do business with whoever you want but the dynamic is the same. It’s just haggling over the price.

How do I explain it? Mostly just like I have here but my conclusion is very different from yours. I mostly tell people not to do it. If you want to ‘invest’ in diamonds, buy the stock of the mining companies, the cutting houses and the dealers. There are public opportunities in every one of those and they’re actively looking for investors. They haven’t been doing so great lately but people have been interested in gems for 5000 years or so and I rather doubt this is the end. If diamonds are on a roll, and I agree that there's a strong argument that they are, than there’s an opportunity with these companies. Unlike buying diamonds directly, if you buy stock in Blue Nile or BHP you can do it for a $10 commission on each end of the deal and you can consummate a deal either in or out in under a minute. Again, buy diamonds if you like. In fact, please buy some diamonds, I’m making a fair piece of my living off of it and they are very cool little thingies, but if you’re looking for an investment talk to your accountant not your jeweler.