Size and mark-up

[zhuzhu]

I have two $-related questions on diamonds today:

1) Does the size of diamond and the markup (profit) have positive correlation? ie: the larger the diamond, the higher markup the stone carries?

2) Is it true most diamond cutter aim to keep the inclusion of the rough in the middle of the finished product, or near the table surface of the diamond to minimize its detection by eyes (because of the facets effect)? - Oops i guess #2 is not really a $ question.

 

[JohnQuixote]

Date: 4/10/2006 7:23:35 PM
Author:zhuzhu
I have two $-related questions on diamonds today:

1) Does the size of diamond and the markup (profit) have positive correlation? ie: the larger the diamond, the higher markup the stone carries?

2) Is it true most diamond cutter aim to keep the inclusion of the rough in the middle of the finished product, or near the table surface of the diamond to minimize its detection by eyes (because of the facets effect)? - Oops i guess #2 is not really a $ question.

1) Diamonds cost more dispropotionately as they get larger because pieces of rough are increasingly rare with size. That fact has nothing to do with profit margins. Of course, someone who owns a premium 3ct G VS2 diamond can indeed charge a larger markup BECAUSE it's rare. However, if there is an abundant supply of 3ct G VS2 diamonds at the time (not likely

) his diamond won't command such a markup. Much of it depends on market dynamics.

2) Diamond cutters plan around inclusions to maximize the value of the stone. Generally a center-table inclusion that is visible like is less desirable than one close to the girdle. But the nature of each piece of rough determines what is cut. There are no hard, fast rules. It's about balancing yield with final appearance.

 

[zhuzhu]

Thank you John!