Is the internet, and cut grading the enemy of creativity in cutting?

[Rockdiamond]

Hi everyone,
I''ve had countless conversations on PS where my views, being slightly different regarding things like light return, have caused some very heated conversations.

I heard an interesting story on NPR today that directly related to this.
It talked about how the internet was supposed to make it easier for artists to share their vision, but how this promise has gone largely unfulfilled- and in some important ways.

In literature online, "snippets" are the norm. People take words out of context, and can copy and paste them in ways that make the authors intention unintelligible. When a book is published, you get the entire work of the author.
Newspapers and magazines are falling by the wayside daily.

In music, it''s become near impossible to sell records for any but the most well known of artists.
A musician can get his work out there, but not for money- it''s all free sharing.

When it comes to the art of diamond cutting, the internet has made it necessary for cutters to follow a very narrow path when cutting- round brilliants especially. GIA and AGS have responded to the new information age by grading cut in ways that make sense, based on the new informational reality.
On the positive side, we have gained a consistency that was unthinkable just 10-15 years ago.
Some of this is due to improved tools- but more due to market pressure based on the way the internet treats information.
It''s easy to see what we''ve gained, but what have we lost?

I have the opportunity to see thousands of diamonds a year. I get taken to task here because I happen to prefer some of the types of stones that can be shown to have less light return.
What I have seen firsthand is a lessening of diversity within what can be considered to be "well cut diamonds"
Thankfully, rounds have been the only shape to really show such a trend.

In other shapes, I''ve seen the improved technology used to widen the variety in the types of stones we see.
Karl''s Octavia is a great example.
"By the books" it could be knocked as having proportions far outside the accepted ranges. Regardless, it looks pretty nice to me, based on the photos I''ve seen.

I think it would be interesting to hear what people think we''ve gained, and what has been lost in the way the internet, and technology have been used to standardize diamond cutting.

 

[Yekutiel]

Hi Rockdiamond.
I see where you are coming from. I am also very fortunate to view, touch, hold and compare thousands of diamonds and every shape and color. However let us not forget that the most important “C” is Cut.
What we have gained from the internet is information. Almost anybody in todays day in age does research before they consider in purchasing anything. With that in mind consumers and tradesman want to only acquire the best of the best out there for those specifications is what the market desires from the information they have learned here from pricescope.com and the internet. And for that reason cutters are cutting and manufacturing diamonds that are not just okay makes like 10 years back but diamonds that are the BOMB. In other words the ppl have gained everything and lost nothing. Win Win for all.

 

[Karl_K]

There is not a lot of room for innovation in round brilliants.
It has pretty much all been done before and the fixed facet structure leaves you limited options.
The only real way to innovate with rounds is not cut RB''s
I would agree that cut grading has killed what little there might have been.
But that is a separate issue from wanting great light return.
Innovative designs in many different shapes with great light return are not only possible but will be coming to market in the coming years.
The biggest thing holding them back is the diamond rough market.

 

[hihowareyou]

As a consumer I think that the internet is a wonderful thing in diamond buying (and anything buying). I rarely make a large/expensive purchase without first researching the product, manufacturers, prices, etc in great detail first. The internet and hype around cut quality and light return may be killing off a bit of creative cutting in the RB but that is a small price to pay for the increased confidence that a consumer can have in their ability to pick a good diamond. Diamonds are not cheap and their purpose is really to look pretty and sparkle so an increased focus on cut quality to me translates to more pressure on cutting houses to cut to a higher standard.

Outside of the round brilliants I really think that the internet is fostering creativity. It is clear reading on pricescope that globally there is a market for new/creative/unique/different cuts. If vendors were only selling to local customers and didn''t have sites like pricescope where new cuts are reviewed, talked about and hyped, I doubt a place like GoG would have enough the market to develop and turn a profit on their line of revamped vintage stones and the octavia would certainly never have seen the light of day.

For me personally a RB is unexciting and I can''t imagine much you could do with it to make it exciting to me. I hope the next decade will be dedicated to really improving and developing new fancy cuts that rival the RB in terms of light performance while also having interesting patterns and shapes.

Do you have examples of these creative RB stones that you could show?

 

[Rockdiamond]

Date: 1/14/2010 8:44:27 PM
Author: hihowareyou
As a consumer I think that the internet is a wonderful thing in diamond buying (and anything buying). I rarely make a large/expensive purchase without first researching the product, manufacturers, prices, etc in great detail first. The internet and hype around cut quality and light return may be killing off a bit of creative cutting in the RB but that is a small price to pay for the increased confidence that a consumer can have in their ability to pick a good diamond. Diamonds are not cheap and their purpose is really to look pretty and sparkle so an increased focus on cut quality to me translates to more pressure on cutting houses to cut to a higher standard.

Outside of the round brilliants I really think that the internet is fostering creativity. It is clear reading on pricescope that globally there is a market for new/creative/unique/different cuts. If vendors were only selling to local customers and didn''t have sites like pricescope where new cuts are reviewed, talked about and hyped, I doubt a place like GoG would have enough the market to develop and turn a profit on their line of revamped vintage stones and the octavia would certainly never have seen the light of day.

For me personally a RB is unexciting and I can''t imagine much you could do with it to make it exciting to me. I hope the next decade will be dedicated to really improving and developing new fancy cuts that rival the RB in terms of light performance while also having interesting patterns and shapes.

Do you have examples of these creative RB stones that you could show?

If we''re talking about fancy colored diamonds, there are many cases where cutters take different direction than with colorless rough- sometimes resulting in unusual designs.
I''ll see if I can track down a stone to demonstrate.
In round diamonds, given the familiarity of the 57facet traditional round brilliant, the differences are more subtle yet pervasive.
Everyone cuts small tables nowadays.

I''d be the last person to argue against the internet in terms of how it''s revolutionized diamond sales.
I''m also a huge fan of the transparency it provides- on so many fronts.
it would be ridiculous to suggest "going back" to pad and pencil.
The real challenge is to keep it human.
For example- email probably facilitates millions of more "letters" to be sent.
Does anyone remember getting an envelope containing a handwritten note?

I believe Karl and Yekutiel are making my point, in the way this relates to diamonds.
IN this internet age, we need numbers ( digital) to "prove" the cut.
If we''re going to use a tool to "quantify" the quality of the light coming off a diamond, a small table makes sense.
The internet pretty much demands such empirical data.

I want some handwritten letters, that''s all. And some RBC diamonds that are "spreadier"

My experience is that "light return" as it''s measured, plays directly into the hands of the digitization of everything. Something gained, but something lost.

 

[Stephan]

Hi David.
I don''t buy diamonds to see light return, I prefer the fire.
But diamonds that have big zones of leakage will lack fire too.
Leakage is never attractive if you can see it with the naked eye (table darker than the crown, ...).
As I don''t follow technology, I don''t know if something similar already exists: the fire of a diamond should be measured too, not only the amount and size of flashes but also the intensity.
My eyes are such a tool but they work better IRL than online.
I''d love to see more diamonds scoring EX on the HCA cut with higher upper girdle angles/longer star facets.

 

[Rockdiamond]

HI Stephan,
Thanks for adding your views.
You mentioned that "leakage is never attractive"- and clarified the statement by adding that what you are talking about is when the table is darker than the crown. Of course I''d add the phrase "never attractive to you"- after all, how can one person declare what''s attractive to another.

Still, a descriptive such as " I don''t like it if the table looks darker than the rest of the top of the diamond is self explanatory.
But in your first sentence you mentioned that you prefer "fire".

If we look at the numerical system used by the HCA , or your use of the word "fire", it''s clear that both represent an attempt to describe something that defies statistical analyzation.
If it was two people speaking to each other while looking at a diamond, they could possibly expound further to clarify what "fire" meant.
But the term "fire" when describing a diamond, has been turned into a phrase that''s supposed to mean the same thing to everyone.

What I''m talking about is a "collective" thought process made possible by the internet.

I get your point that the internet almost demands that things be "quantified"- as we''re not looking at the thing in reality- we''re looking at a representation on the computer monitor.

What I''m suggesting is that the act of doing so has changed the way cutters view their possibilities when designing the cut of round diamonds- thereby reducing diversity in cutting.

Another aspect is how readers can "import" the concept of such terms to their own detriment.
Someone may have loved their diamond, only to read something on the internet that caused them to abandon their own ideas of what "fire" is, to adopt the new "collective" definition.

 

[oldminer]

We have lost some diversity, but the gains have been meaningful and positive in some respects, too. Diamonds are more of an open subject and many more people can feel comfortable making large purchases because they simply know enough about the product to make some sort of partially informed decisions. In time, diversity will increase once again.

Cut grading is not the enemy as I see it. We have endured color and clarity grading very nicely even though it is full of subjectiveness and human failings in repeatability. Humans have an innate desire to categorize quality. The more we learn, the more we naturally follow this path.
What we must do is perfect our methods of categorization so that they are as correct as we can make them, easy enough to use, relatively easy to teach and not so microscopically fine tuned that no one can repeat their grading. As humans insist on categorization, we need to make it scientifically correct, logical and repeatable. This is not work done in a day or a year, but a long term work in progress.

In the long run I believe cut grading has the potential to give consumers new choices in very beautifully cut diamonds which meet the financial efficiency level required to consider cutting them from costly rough. It already has raised the bar for giving consumers well cut diamonds in numbers far more common that 20 years ago. Admittedly, I, too, like some of the less "well" cut diamonds, but for the sake of consumers willing to pay a premium for the most brilliant, the most firey, the most whatever, then cut grading helps to solidify what is being offered as substantiated and not totally a "trust me, I''m the expert" BS that was given to consumers for as long as I''ve been in the biz, and much longer, too. To me, it is heart breaking to see a consumer who has been told that their choice of diamond was "the best", "ideal cut", "super fine make" etc when it was far from true. Creation of proper standards promotes honesty and openness. It isn''t perfect yet and may never be perfect, but it will get better and better in time.

Remember the first cell phones. They were not perfect, but they have gradually improved and are still improving. Technology advances in spite of our traditional points of view and we must be willing to examine this change for the truths held within, accept the parts which are truly correct and continue to criticize the parts which are wrong or in need of further improvment. Our dialogue on Pricescope is an important part of this process.

I always wanted a new 1950 Plymouth like the old jalopy my dad gave me in 1964. Now that I have driven a couple of these relics, I have more or less gotten over the desire to go back to the stone age. I''ll stick to my 2004 BMW for a few more thousand miles. There is good reason for sentimentality, but no reason to get totally stuck with it.

Personally, I can hardly wait to live through the future of diamonds. I love the old cuts, the fancy shapes, all sorts of non-ideal modern cuts, the unique character of every stone, and how people feel about "their" diamond. But, I don''t want to go back to 1970, ever.

 

[Stephan]

Date: 1/15/2010 12:20:40 PM
Author: Rockdiamond
You mentioned that ''leakage is never attractive''- and clarified the statement by adding that what you are talking about is when the table is darker than the crown.

No, I said:

But diamonds that have big zones of leakage will lack fire too.
Leakage is never attractive if you can see it with the naked eye (table darker than the crown, ...)

See the words written in bold.
Oh, and did you see ''...''?
''...'' = crown darker than the table, ...
=> so not only table darker than the crown

 

[Stephan]

I can''t agree with you, David.

Light return is nice
Fire is nice
Luster is nice
Scintillation is nice

You can not say I don''t like light return in diamonds (same for fire, luster or scintillation).
It''s absurd.
But you can prefer one feature.

My criticism to the industry of the ideal diamond is that they only use light return to judge diamonds because they can''t measure fire or scintillation.
GIA has a better approach than AGS (human eyes vs reflector technology) but GIA is biased with the people of the trade who need to sell steep/deep diamonds, that''s why they allow light to come in from the pavilion when grading the cut of a stone.

 

[Todd Gray]

We discussed cut quality with our clients long before launching our web site towards the end of 1996, the only advantage the internet provided was the ability for people beyond the limitations of our locality to learn about diamond cut quality. As one of the original web sites which introduced such information to the public on our web pages, we experienced an immediate backlash from the diamond industry in the form of a lawsuit filed against us by 50+ members of the Polygon Network for "disclosure of proprietary information to the public" and "disparagement of an entire industry". A lawsuit which dried up rather quickly when the plaintiff''s got schooled on the basics of first amendment law and the protections offered under the guise of satirical wit.

What was the headline on the front cover of Rapaport magazine? As I recall it was something along the lines of "due to the emergence of diamond dealers on the internet, the retail jeweler may be extinct by 2000" or something like that. New York Diamonds magazine did a feature article on internet diamond vendors featuring us and, oh heck, are they even in business any more? Oh that''s right, they haven''t been allowed on this playground for YEARS

And with all of the hoop-la within the industry about how the internet is destroying the diamond business, going to destroy the diamond business, put the retail jeweler out of business, ya-da-ya-da-ya-da, a recent trade article indicated that only 6% of U.S. diamond and jewelry sales took place online, which is only, what? 3% more than it was in the late 1990''s?

The internet is not the enemy of creativity in cutting, it is merely an educational and marketing resource which makes information more available to the public and which enables many of us to operate our businesses beyond the limitations of our locality. We''ve been telling our cutters what to produce for YEARS based on our selection criteria, just as other vendors do every time they sit down with their suppliers and answer the question "what can we do to earn more of your business this year?" which is answered with "well, I''m looking for more diamonds cut within this range of tolerances, without this type of inclusions, etc." and the cutters will decide whether to produce more diamonds within that projection based on their current volume with that customer and how much they value the potential added volume - heavily weighed against whether they stand to earn higher profits from that prospectus or that of one offered by another customer. This is standard business 101 and the internet has nothing to do with it.

With regards to Karl''s creation, without the internet, it might never have been possible for Karl to establish the reputation which he has within the group of creative people necessary to embark on such an adventure...

 

[purrfectpear]

If the internet reduced the diversity of cutting in a significant way, then Rock Diamond would not carry oddly cut "orphan" diamonds in quantity. Clearly it has not eliminated "diversity".

It may have influenced the pool of how many people are still willing to buy those sort of diamonds, but that is an entirely different complaint.

 

[Rockdiamond]

Stephan, of course each of us know what we like.
What I''m talking about are the concepts you are referring to.
I''m questioning if what you think of as "fire" is the same as what I think of as fire.
Have you got a photo of what "fire" looks like in a diamond?
How about leakage?

I believe it''s clear that these concepts don''t translate into a physical reality which can be photographed.
That does not mean they are not real- just while that "fixing" these aspect numerically seems to standardize something, it misses any meaningful goal.

If we were to relate this to cars: Accelerating a given car from 0-60 at a controlled track to standardize results will provide meaningful statistics.
Handling is a totally different ballgame.
What one person feels is sufficient feedback from the steering wheel another person may feel is to much resistance.
How about a numerical system of grading how spicy a food is?
Grading how pretty a diamond is follows the path of a numerical system of deciding what''s beautiful.
The internet has made attempts at this inevitable.

Oldminer brings up a great point regarding cell phones.
It''s hard to imagine living without them today, but remember when we had time in a car that was solitary?

Again- I''m not arguing against progress- just noting that some of the promises of the new internet/cellphone age have gone unfulfilled.

 

[Rockdiamond]

Todd- you have quoted some stats about the percentage of jewelry sales on the web.
How about the number of Brick and Mortar business failures in 2007 compared to 1997?
I believe it would be far greater- I used 2007 to eliminate the effect of the economic downturn.


I used to travel as a road salesman selling diamonds to retail jewelers.
A large percentage of brick and mortar diamond sellers are no longer viable.
The winner here in many ways is the consumer as I believe that the mean "retail" margin charged by sellers is far less than it was 15 years ago.
Also true that logistically, the internet has allowed a "collapse" of the supply chain.
Many companies that used to sell to other dealers now sell directly to the public.

BTW- I'm relating the NPR story to diamond cutting- but it applies in so many other areas as well.
Music, literature and art among them.
Today Google and Youtube make gazillions and the artist needs to be content knowing a lot of people can look at his work- but he's not getting paid for it.
Over time this has an effect on art itself.

 

[Todd Gray]

Date: 1/15/2010 2:59:13 PM
Author: Rockdiamond
Todd- you have quoted some stats about the percentage of jewelry sales on the web.
How about the number of Brick and Mortar business failures in 2007 compared to 1997?
I believe it would be far greater- I used 2007 to eliminate the effect of the economic downturn.

The internet is not to blame for the number of brick and mortar jewelry stores which went out of business, this mass failure is a result of poor economic conditions facing all industries. If you want to lay blame where blame is due, start looking towards Congress and towards every company that outsources manufacturing and jobs to other countries.

It literally took me 45 minutes the other day to shop for a pair of running shoes based on a desire that they not be manufactured in China. Eventually I found a pair by New Balance which were at least "assembled in the U.S.A." and that is still a discouraging realization.

National People''s Republic radio? R-E-A-L-L-Y?!?!

 

[Garry H (Cut Nut)]

Nice self promotional thread David.

Did you notice the threads that have been pinned here on getting the vox-pop for cushion cuts?
https://www.pricescope.com/community/threads/new-high-res-movies-pick-favorite-cushion.133944/

Would that have been possible without the internet?
The diamonds selected will be available from large manufacturers at competitve prices. The designs were made with the aid of numbers - complex competing numbers where one variant can have more fire, perhaps with a little more leakage or slightly less light return. Another is brighter. The distribution of dark zones that contribute positively or negatively to scintillation in both face up, face up stero vision and moving are computer with numbers. This iterative process helps narrow down the link between the numbers and human preference.

That would that have been possible without the internet, but it would involve much higher costs.

 

[Karl_K]

my 2c on why b&m''s are going under:
The failure of small b&m''s is being caused by 2 things under capitalization, the next generation getting out of the trade and into others.
Memo is no longer a shield it once was and they did not have the money to stay in business on their own.
Locally 10 or more have went under because the kids did not want to take it over.
Neither of which have anything to do with the internet.

 

[Rockdiamond]

If an idea can cause some healthy debate, what's wrong with that.
Hopefully it adds something positive.

Garry-that's an amazing use of the internet.
I can't say it enough times. I'm not advocating going back, and I love the internet, and how it allows sharing of ideas.
I'm just pointing out the implications that some of the basic structure of this amazing thing carries.

Karl- why can stores no longer obtain memo goods? The internet.
Years ago, stores would leverage memo by purchasing some smaller goods.
Most B&M jewelers never carried large stocks of 1.00ct + goods.
Only strong operations would stock quantities of 2ct+ goods..
It was possible, in the years before the internet, for a store to make enough sales of .50-.75 and some 1ct solitaire sales to amortize some of the other expenses.
Take away large chunks of that and a lot of folks loose their jobs

If you look at the demographic, a lot of folks that can afford to buy high dollar diamonds understand the internet.
Basically the amazing utility of the web created a totally different way to sell diamonds targeted at the higher end of the market.
Even some larger chain operations that used to carry a lot of 1.50-3.00ct goods stopped investing , and turned to opening websites designed to drop ship.

Todd- I could not agree more with the frustration over the amount of manufacturing that's gone off shore.
I happen to think National Public Radio is an interesting station- I also sometimes listen to Rush Limbaugh.

I don't see how a case could be made that the internet has not changed the way so many people buy jewelry- in turn hurting the B&M traditional jewelry stores.
The internet has a lot to do with the fall of a company like M Fabrikant.
It took over 200 employees to service the thousands of stores Fabrikant used to sell to. They all lost their jobs. The sutuation has put a hurting on a the entire NY diamond wholesale job market.
Today a companies are doing HUGE volume with 10 people.

I feel bad about it- at the same time, appreciating it.


I think that was part of the point.

 

[tonyc2387]

On the B&M failure point... what about those that refuse to accept that the internet can be a source of good information? Without exception, mentioning "internet" in a store was essentially blasphemy in my experience. For those of us used to getting (and verifying!) most of our information using the internet, shunning this method (or, equivalently, the customer) is of course a recipe for disaster. I think B&Ms that continue to insist on selling via less-than-accurate information, while shunning "the evil internets" will be left in the dust. I''m not sure I''d classify this as a bad thing...

As for ''creativity'', I think the only way the internet would be the enemy is if it is considered the enemy. Again, see Karl... and then continue the trend. Using the internet to spread word, judge interest, etc. about a new cut costs very, very little... after all, only one diamond needs to be cut for the world to see it. Yes, this could lead to an overload, sort of like the indie music industry... but I''m not sure I see how one could truly consider the internet the ''enemy'' of creativity.

 

[Karl_K]

The biggest threat I see on the horizon is what is going on and has been going with grading labs and grading.

Even gia sounds worried...


https://www.pricescope.com/community/threads/gia-trying-to-standardise-grading-and-charges-in-oseas-labs.133996/

 

[Todd Gray]

Date: 1/15/2010 9:03:10 PM
Author: Rockdiamond
The internet has a lot to do with the fall of a company like M Fabrikant.

It took over 200 employees to service the thousands of stores Fabrikant used to sell to. They all lost their jobs. The sutuation has put a hurting on a the entire NY diamond wholesale job market.

Whoa! Whoa! Whoa! You''re NOT really trying to say that the internet caused the fall of Fabrikant are you? Get serious! The internet doesn''t cause this kind of debt load David:

From National Jeweler Magazine, July 01, 2007:

"Prior to the asset sale, Fabrikant owed lenders about $140 million. At the time it filed for bankruptcy, the company stated it had annual sales of $370 million."

''the sky is falling, the sky is falling'' sings to the same tune as ''the internet did it, the internet did it'' give me a break!

Hey David, have you stopped to consider ''just for a moment'' that Fabrikant was the contracted distributor for the Royal Asscher Cut, which is a brand name of diamond which can not be sold on the internet... Thus it can only be sold to brick and mortar jewelry stores, thus the internet had ''no effect'' on the market at all.

This is a comment from JCK magazine, June 25, 2008 made by Lita Asscher, president Royal Asscher of America Inc. pertaining to distribution of the Royal Asscher cut diamond with Fabrikant, apparently that didn''t work out so well:

“When M. Fabrikant & Sons filed for bankruptcy they did so to the financial detriment of our company. It has been legally asserted that the Fortgangs are responsible for a significant level of fraud and we welcome the legal moves that have been made to deal with this, it is just unfortunate that our name has been improperly associated with the scandal. Royal Asscher is a company that prides itself on ethics and integrity; people who deal with us regularly are aware of this, but it is important that we make a statement to protect our brand and reputation."

 

[oldminer]

Nearly every business in the USA has been impacted in some way or another by low cost, low overhead, off-shore or Internet operations, not just traditional jewelry stores. The concept that consumers will be faithful to products made in the USA no matter what they cost is not viable no matter how much respect it deserves. High overhead, profits which are not competitive, lackluster salemanship all now are leading to bankrupcty of many firms which we thought to be bulletproof. No matter how much you may not want it to happen, diamonds of the kind being sold on Pricescope fit very well into low overhead, low profit sales approaches. Whatever does not fit so well, remains, for now, with B&M stores and it is not what I'd term a happy or pretty picture. It is a large, quantum shift in the market which is not going to reverse itself.

The ready sharing of information eliminates many niche business models as openness replaces secrecy. Creativity is as great or greater than it ever was, but the cycle of new ideas is much more rapid and fickle than 20 years ago. A new idea like the iPhone has a much shorter life before the next, and then the next generation of iPhone is brought out. We have creativity that barely gets noticed before new creativity replaces it. It is a whirlwind of change rather than a lack or a prevention of creativity taking place. It is so rapid, we can't even see it or appreciate it sometimes and then it is already gone with something else newer still.

No doubt, lower profits are bringing down business models that require higher margins. I don't see any shortage of product, but only newer ways to obtain it for lower costs. It is a terrible shame for workers that no longer have a job, but it is the inefficient business model they worked under failing them and not the fault of the Internet as I see it. They might have still had jobs if there were no Internet, but creativity cannot be stifled in this way.

I think cutters will begin to reap some benefits of the Internet's low cost marketing in time. They will be able to experiment more with new cuts and see if market acceptance comes directly to them rather than coerce B&M stores to try a new style only to get no support from sales people behind the counter. In order to break the traditional cycle of the business, there will be a period of transition which is painful and finally there will be a more accepted, modern way to conduct diamond sales which works for those still left in the business. No doubt, many will leave the business before then.

 

[denverappraiser]

The rise of the Internet as a means of educating customers as well as a means of conducting business with folks who are far away has definitely changed the diamond business. This isn’t the end of the ‘brick and mortar’ jewelry store but some adaptation is required and there are certain business models, like the classic mall store of the 70’s & 80’s that I think are going to have a tough go of it if they don’t change a few things. By and large, it’s been a good thing. Customers are better informed, dealers with better goods and/or better deals are finding it easier to reach their clients and the whole industry is FAR more transparent.

That said, I do largely agree with David’s premise. Long distance customers are inclined to take a safer path that’s been well trod before them and this leads to a uniformity of product, even if it’s uniformly pretty good. Frankly, I think the rise of the big-box stores like Walmart and Costco is even more insidious on this issue. They’re prepared to sell you pretty much anything you want for a fairly reasonable price but the expectation is that you will get your education and develop your taste elsewhere and that you’ll only come to them after you’re ready to hammer on the price. Their display, to the extent that they even bother to have one, is limited to what they’ve identified as most popular. That ‘elsewhere’ for research is increasingly the Internet and what you’re seeing is photographs and text where 20 years ago it was the local jewelry store and what you saw was jewelry. Who’s surprised that this isn’t conducive to slightly eccentric products that have to be seen to be appreciated?

I do think the evolution is continuing even as we type. The Internet is also extremely good at very small niche products that cater to very specific requirements and it allows a shopper to literally search the world for exactly what they want. Terribly specialized things have a foot in the door like they never have before and it’s my expectation that creative and specialized diamond designs are on the brink of a revolution in marketing because of it.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Garry H (Cut Nut)]

Wall Street Journal feb 5th 1928

Mail order sales increase putting pressure on retail and department stores
The increased rate of bankruptcy....................


(I made that up)

 

[Rockdiamond]

Date: 1/18/2010 2:53:56 PM
Author: Todd Gray

Date: 1/15/2010 9:03:10 PM

Author: Rockdiamond

The internet has a lot to do with the fall of a company like M Fabrikant.


It took over 200 employees to service the thousands of stores Fabrikant used to sell to. They all lost their jobs. The sutuation has put a hurting on a the entire NY diamond wholesale job market.

Whoa! Whoa! Whoa! You''re NOT really trying to say that the internet caused the fall of Fabrikant are you? Get serious! The internet doesn''t cause this kind of debt load David:


From National Jeweler Magazine, July 01, 2007:


''Prior to the asset sale, Fabrikant owed lenders about $140 million. At the time it filed for bankruptcy, the company stated it had annual sales of $370 million.''


''the sky is falling, the sky is falling'' sings to the same tune as ''the internet did it, the internet did it'' give me a break!


Hey David, have you stopped to consider ''just for a moment'' that Fabrikant was the contracted distributor for the Royal Asscher Cut, which is a brand name of diamond which can not be sold on the internet... Thus it can only be sold to brick and mortar jewelry stores, thus the internet had ''no effect'' on the market at all.


This is a comment from JCK magazine, June 25, 2008 made by Lita Asscher, president Royal Asscher of America Inc. pertaining to distribution of the Royal Asscher cut diamond with Fabrikant, apparently that didn''t work out so well:


“When M. Fabrikant & Sons filed for bankruptcy they did so to the financial detriment of our company. It has been legally asserted that the Fortgangs are responsible for a significant level of fraud and we welcome the legal moves that have been made to deal with this, it is just unfortunate that our name has been improperly associated with the scandal. Royal Asscher is a company that prides itself on ethics and integrity; people who deal with us regularly are aware of this, but it is important that we make a statement to protect our brand and reputation.''

Todd- I am intimately familiar with the M Fabrikant situation.
Besides the fact that I worked there twice, we DID carry the Royal Asscher brand online, back in 2006, when MFS had them.

Clearly, there were some bad moves made by the owners of MFS- evidenced by the fact that there are legal battles going on with claims of impropriety.
But to say that the internet had nothing to do with their fall is to ignore some of the root causes of why MFS could not service their debt.

They had a more massive debt in 1999 when they did almost a billion dollars in sales. But at that time they could depend on payments from many thousands of independent and chain operations so that Fabrikant could afford to make minimum payments. They had depended on stores who''s on-site diamond sales had been decimated by 2007. Can anyone here seriously make the claim that the growth of internet diamond sales had nothing to do with that?


Dave- I agree that some cutters are benefiting from increased diamond sales. The fact that companies like M Fabrikant are no longer viable is painful to some- while there are cutters we know that have benefited to an amazing degree.

As a person who''s life was transformed by internet diamond sales, I''m not saying this is all bad.
"At the fringe", where we live, the internet has opened up a lot of possibilities.
Who wanted S-T color diamonds before? As Neil points out, the internet has allowed for a far greater diversity in some regards.
I agree wholeheartedly about how Costco, Wall Mart and others are trying to homogenize everything. If you want to buy paper towel, it''s great. But if you want to buy a camera( for example) it''s terrible.

The point of the story is that the cost of the new business models created by the web ( and the "big box" stores) sometimes gets overlooked. Yes, there are more varieties of diamonds being sold today, but the diversity in round brilliant diamonds ( for example) has suffered. This is but a tiny example - as the effects are far more pervasive in many other areas. But this one is one I feel personally.

 

[WinkHPD]

Date: 1/15/2010 2:16:08 PM
Author: Todd Gray
We discussed cut quality with our clients long before launching our web site towards the end of 1996, the only advantage the internet provided was the ability for people beyond the limitations of our locality to learn about diamond cut quality. As one of the original web sites which introduced such information to the public on our web pages, we experienced an immediate backlash from the diamond industry in the form of a lawsuit filed against us by 50+ members of the Polygon Network for ''disclosure of proprietary information to the public'' and ''disparagement of an entire industry''. A lawsuit which dried up rather quickly when the plaintiff''s got schooled on the basics of first amendment law and the protections offered under the guise of satirical wit.

What was the headline on the front cover of Rapaport magazine? As I recall it was something along the lines of ''due to the emergence of diamond dealers on the internet, the retail jeweler may be extinct by 2000'' or something like that. New York Diamonds magazine did a feature article on internet diamond vendors featuring us and, oh heck, are they even in business any more? Oh that''s right, they haven''t been allowed on this playground for YEARS

And with all of the hoop-la within the industry about how the internet is destroying the diamond business, going to destroy the diamond business, put the retail jeweler out of business, ya-da-ya-da-ya-da, a recent trade article indicated that only 6% of U.S. diamond and jewelry sales took place online, which is only, what? 3% more than it was in the late 1990''s?

The internet is not the enemy of creativity in cutting, it is merely an educational and marketing resource which makes information more available to the public and which enables many of us to operate our businesses beyond the limitations of our locality. We''ve been telling our cutters what to produce for YEARS based on our selection criteria, just as other vendors do every time they sit down with their suppliers and answer the question ''what can we do to earn more of your business this year?'' which is answered with ''well, I''m looking for more diamonds cut within this range of tolerances, without this type of inclusions, etc.'' and the cutters will decide whether to produce more diamonds within that projection based on their current volume with that customer and how much they value the potential added volume - heavily weighed against whether they stand to earn higher profits from that prospectus or that of one offered by another customer. This is standard business 101 and the internet has nothing to do with it.

With regards to Karl''s creation, without the internet, it might never have been possible for Karl to establish the reputation which he has within the group of creative people necessary to embark on such an adventure...

I am coming late to this discussion and was going to respond, then I saw that Todd said it already and said it better than I would have.

I was able to close my local retail store and now just sell to the world, VIVA LA INTERNET!

I give thanks to the Power of the Universe, no matter what you wish to call him/her that the Internet is here and available to me. Do I whine that it is not available to me to sell stones that I would never have sold anyway? No. I have been a fan of ideal cutting since I was a student at the GIA in 1975 and was bitterly disappointed to not have a big enough market for the Ideal cuts here in Boise when I came here in 1976.

Now I have the market, too bad it is mostly not in Boise, but without the Internet I would not have it at all. Rock, I disaggree with much that you said as it relates to diamonds. Cutters still cut garbage, it is just getting harder for them to sell it. Someday, perhaps, most diamonds will be top quality cutting, but I am not in fear of it happening in my lifetime.

I am wishing cutters well in creating new and unusual diamonds, and without the Internet they would never find enough buyers to make it worth their while. Even with the Internet it will be difficult for them. Someday I am hoping Jon''s exclusive for them expires so that I can buy one at my level. Lucky for me if it does, but I can appreciate seeing it even if I can only buy it at retail. Jon was smart enough to grab it first, I hope it is successful for him, as Karl''s design deserves to be seen by the world. Thanks to the Internet, it will be.

Wink

 

[Rockdiamond]

I hope I was not whining about anything- rather pointing out how this amazing informational exchange called the internet has changed things in ways we might not have anticipated- as it regards to diamonds.
Absolutely there's still junk cut, but I'm sure you'll agree that if we were to compare the "average make" from 1980 to todays, the improvement would be marked.
Wink, you and I could look at this from the two different sides with a similar perspective.
I started in 1976.
When smaller tables first starting showing up more in the '80's I thought they were pretty, but I liked a slightly spreadier stone then and I do now.
Of course now, the internet has made 59% too large a table for most cutters.....so I rarely get to see the fine makes I like best.

I love the internet as much as anyone- maybe too much.
Never meant to complain about the medium, just note it's effects.

 

[WinkHPD]

Date: 1/18/2010 10:17:53 PM
Author: Rockdiamond

I hope I was not whining about anything- rather pointing out how this amazing informational exchange called the internet has changed things in ways we might not have anticipated- as it regards to diamonds.
Absolutely there''s still junk cut, but I''m sure you''ll agree that if we were to compare the ''average make'' from 1980 to todays, the improvement would be marked.
Wink, you and I could look at this from the two different sides with a similar perspective.
I started in 1976.
When smaller tables first starting showing up more in the ''80''s I thought they were pretty, but I liked a slightly spreadier stone then and I do now.
Of course now, the internet has made 59% too large a table for most cutters.....so I rarely get to see the fine makes I like best.

I love the internet as much as anyone- maybe too much.
Never meant to complain about the medium, just note it''s effects.

Rock,

No personal disparagement meant, and I hope none taken.

I would take you to task however for calling tables larger than 59% fine makes, most are not, in my opinion. (I realize that some combinations with larger tables do make the grade, but most lack the dispersion that I prefer in my diamonds, and most do not make the coveted AGS 0 cut grade.)

You can have your spread, but for me, give me sparkle or give me....

Oh wait, that was for the revolution, it is late and I grow confused...

Going to bed now.

Wink

 

[tonyc2387]

wow - just incredible posts by all. i think wink is the prime example of what i was trying to get at, and he said it much better than i. yes, there are sad aspects to his story, but i marvel at the wisdom (and cajones

) to embrace, rather than resist, such radical change... and it makes me very happy to see that it''s resulted in great success.

i think it boils down to the fact that it''s necessary to adapt to survive. i also fully believe that creativity is a prerequisite for adaptability, so it won''t be stifled in the least.

RD, i can understand what you mean about the RB market. Perhaps it''s a result of the momentum from all (well, almost all, see B&M''s David mentioned) sections of the industry towards TIC/H&A, and cutters are shifting their priorities accordingly. But, quite again like what David was saying, the market is fickle, and I think the pendulum has a good chance of swinging the other way in short order once TIC becomes the "old thing" and people start looking for different characteristics in RB stones. This, of course, is not to say there won''t continue to be (potentially painful) changes in the entire supply chain as it adapts to serve the evolving, faster-moving market...

 

[Dancing Fire]

Date: 1/18/2010 10:32:21 PM
Author: Wink

Date: 1/18/2010 10:17:53 PM
Author: Rockdiamond

I hope I was not whining about anything- rather pointing out how this amazing informational exchange called the internet has changed things in ways we might not have anticipated- as it regards to diamonds.
Absolutely there''s still junk cut, but I''m sure you''ll agree that if we were to compare the ''average make'' from 1980 to todays, the improvement would be marked.
Wink, you and I could look at this from the two different sides with a similar perspective.
I started in 1976.
When smaller tables first starting showing up more in the ''80''s I thought they were pretty, but I liked a slightly spreadier stone then and I do now.
Of course now, the internet has made 59% too large a table for most cutters.....so I rarely get to see the fine makes I like best.

I love the internet as much as anyone- maybe too much.
Never meant to complain about the medium, just note it''s effects.

Rock,

No personal disparagement meant, and I hope none taken.

I would take you to task however for calling tables larger than 59% fine makes, most are not, in my opinion. (I realize that some combinations with larger tables do make the grade, but most lack the dispersion that I prefer in my diamonds, and most do not make the coveted AGS 0 cut grade.)

You can have your spread, but for me, give me sparkle or give me....

Oh wait, that was for the revolution, it is late and I grow confused...

Going to bed now.

Wink

yep !!