Why do colored stone prices vary so much by vendor?

[2Neezers]

Hi Everyone,

I am new to colored stones and have been browsing all of the sites you recommend.
I am noticing that pricing varies a lot from vendor to vendor. Since I am so new to this, I am just curious what the reason for this is.
Are the higher priced vendors carrying premium cuts and colors? Can equally good stones be found at the lower priced vendors? I have seen some beautiful stones on PS from the more moderately priced vendors.
Just curious.

Thanks!

 

[2Neezers]

Oops! I posted this in the wrong forum. I just asked the moderator to move it to Colored Stones.

 

[Passafire]

I am in no means any kind of expert, so take anything I say with a grain of salt. I've spent the last few months searching/researching/reading on yellow diamonds, as my lady is 100% sure she wants a yellow as her center stone for her e-ring.

I've seen what you see, somewhat large swings on diamonds that, on paper, are pretty close to the same. I think it mostly has to do with the color of the stone that makes the price vary a lot. With yellow diamonds, a slightly deeper/richer/fancier yellow seems to be able to jump the price on similar stones as much as 20%. If you go from say a light fancy, to a fancy vivid... you could be paying twice as much, or more.

From what I've been able to learn as far as colored stones go as the specs on paper are slightly less important than say a regular diamond...and can tell you less about the stone itself. Seeing the stone first hand and being able to compare seems to be slightly higher of importance for getting what you want. It's made online shopping hard... I've already had to send my first e-ring purchase back because the fancy yellow center stone was not at all what I was expecting when I received it.

 

[Dancing Fire]

B/c there aren't any guidelines to follow (i.e. RAP sheet) so dealers just name their own price.

 

[2Neezers]

Thanks for the input Passafire and Dancing Fire.

Passafire, I was following your thread and was so disappointed for you when you received that unfortunate looking yellow diamond from James Allen. I just got my round brilliant from James Allen and it is beautifully amazing. I was actually surprised they would attach their name to the one you received since they have such a excellent reputation. Hopefully their quality control won't let another one like that go out. I hope you find the perfect yellow diamond for your lady soon.

Dancing Fire, I was kind of wondering if that was the case with colored gems. I was thinking it might kind of be like branding. So a certain vendor may want to be known for carrying higher quality stones and prices their supply accordingly, while another may still have great quality stones, but chooses to price their stones lower?

Is it safe to safe that once a person learns about what to look for in colored stones, that they could find a great stone from any vendor, regardless of their pricing?

 

[slksapphire]

hi, welcome to the wonderful world of colored gemstones!

gosh, you have asked a very hard question. the simple answer is that the market for colored gemstones is much less efficient than for diamonds, particularly MRB. so seemingly similar stones can be priced all over the place.

the real answer is much more nuanced than that. first of all, it is very difficult to compare colored gems online as different vendors use different photography setups. and of course everyone's computer screen displays color differently. pricing for colored gemstones is determined primarily based on color, and VERY subtle differences in color can have dramatic impacts on price. some of the PS colored gemstone experts have become very good at interpreting color in online photographs but i am not one of them ... i need to see stones in person and preferably side-by-side.

within color, you need to evaluate the hue (the composition of color) as well as tone (light to dark) and saturation (i refer to this as depth of color). then you have to look at zoning (evenness of the color) and extinction (dark areas) that can be due to the coloration of the rough as well as the cut.

before moving to other factors, colored gemstones are often subject to various heat and other chemical treatments that improve color. for example, i have seen people quote that 90% of sapphires are at least heat treated. then there are more invasive treatments that differ based on the stone (oil, glass, resin, beryllium, etc). heat treatment alone can decrease the cost of a stone by 50%. figuring out whether and how a stone has been treated is a must for colored gemstones.

then you move on to carat, cut (windows are a particular issue with colored stones as colored stones generally look better with more depth than diamonds), clarity and, all other factors being equal, origin.

do you have any examples you can show us to illustrate your question?

eta: yes, some vendors charge a premium for precision cuts (as most colored gems are not precision cut); one general vendor that charges premium prices is pala but they generally do carry higher quality gemstones. then there is everyone else and pricing can be a hodge podge.

 

[X6]

Slksapphire's explanation is very detailed and informative.
Here are pictures from a buyer.
The left picture is shown online by the vendor, and the right one is taken by the buyer.

 

[JewelFreak]

Silksapphire just gave you a colored stone course in a nutshell. Great answer! Another factor in pricing is the cost the vendor paid for rough or cut stones. Sometimes a vendor will sell something he bought some time ago when prices were lower (they always seem to be going UP!), and pass on that lower price to the buyer.

Every business, whether gems or shoes or cars, has its own pricing/profit philosophy. Some price at premium levels, some accept a lower margin & make up the profit on volume, and others at all levels in between. There are those who will work with buyers on price, too, so asking never hurts.

--- Laurie

 

[2Neezers]

Thank you all for explaining the differences so well.
It seems there are many many factors that go in to colored gem pricing. I did notice after I wrote my question, that most of the vendors that charge more for stones are custom cutters. That made a lot of sense, since they are adding their special touch and extra work to the stones. I am guessing that they are also more selective in choosing their stones for their inventory.
So it would make sense to say that, for example, Wild Fish Gems would charge more for their stones than Gem Select. I also see what you are saying about pictures vs reality. I actually have a return to send back to Gem Select that wasn't what I was hoping for, but I think part of the problem was me not knowing what to look for in the pictures and in gems. I think as a newbie, it is probably better to stick with the vendors that price a little higher for the best chance at a great gem. This will be a fun and long learning process

 

[Edward Bristol]

People have different cost-structures, service levels and business commitments.

As anybody here can tell you, I am amongst the most expensive sellers, but I know why and what for. I am not even competing on price and my customer don’t look for cheap.

If you think about it, it is like this with every product.

You can get a plastic bag for 10 cents to carry your stuff around or get a YSL case for $500 and lots in-between.

There is much more to a product than its function or chemical composition.

 

[2Neezers]

Thank you Edward for helping me to understand the differences in pricing between vendors. Your stones look amazing and I hope to purchase from you someday. I am at the stage in my life where I would rather have quality pieces, but being a newbie I was just so confused by the differences In prices I was seeing. I am definitely starting to understand what those differences represent. Anyways, I sincerely hope I didn't offend you in any way by mentioning your company as an example.

 

[movie zombie]

great thread.
should be a sticky and all new posters [and some not so new] should be directed to it.
the world of color stones is much more difficult to navigate but imo so much more rewarding

 

[JewelFreak]

There is no right or wrong to how a vendor of anything chooses to price his product. It's a matter of his personal outlook on how best to do his own business, as well as whatever his cost structure is. As long as customers feel they get fair value for their money, it's done well. Each customer also has a different philosophy on buying; some enjoy the hunt for a bargain & won't pay over a certain amount regardless of quality; others prefer going to someone whose prices are higher but who gives them confidence...and all levels in between them. Buyers define "value" in their individual ways, as do sellers, & there's usually someone who can fulfill that for them -- the strength of free markets.

--- Laurie

 

[T L]

Hi Everyone,

I am new to colored stones and have been browsing all of the sites you recommend.
I am noticing that pricing varies a lot from vendor to vendor. Since I am so new to this, I am just curious what the reason for this is.
Are the higher priced vendors carrying premium cuts and colors? Can equally good stones be found at the lower priced vendors? I have seen some beautiful stones on PS from the more moderately priced vendors.
Just curious.

Thanks!

Vendors can charge whatever they want. It takes education to find out why they're charging a certain price, and if that price is fair.

There are numerous variables involved when setting a price, just like a handbag, it's not all about something that is priced based on similar qualities.

Some, but not all, of those variables include
Precision cutting
Quality of the gemstone (color, size, clarity)
Middle men
Rarity of the gem species and/or color of that species.
Treatment
Marketing names and what's hot and what's not.
Designers (ie Tiffany & Co)
Difficulty in obtaining the gemstone
What the market demands
Overhead (as in a B&M store vs a website), paying for advertising

 

[T L]

You can get a plastic bag for 10 cents to carry your stuff around or get a YSL case for $500 and lots in-between.

Or I can get a case that looks and is the same quality as YSL for much less than the YSL, simply because you're paying for the name.

 

[Marlow]

Written by Edward Bristol » 23 Feb 2014 09:55:
You can get a plastic bag for 10 cents to carry your stuff around or get a YSL case for $500 and lots in-between.


Or I can get a case that looks and is the same quality as YSL for much less than the YSL, simply because you're paying for the name.


TL - you are soo right!!

But the most important thing is not to pay $ 2000 for the $ 500 YSL case!!

 

[PrecisionGem]

There actually are price guides for color stones, a few of them. What becomes more difficult is that at times a subtile difference in a stones color, tone or saturation, can have a not so subtile effect on it's price. For example, I just randomly picked a stone from one of the price guides For stones 5 to 9.99 ct, the price was listed as $10 to $40 for commercial quality, and $140 to $275 per ct. for Extra Fine and then various prices for qualities in between. So you can see that's quite a wide variation in price. As a consumer, you would need to understand the particular stone, and be able to classify it as to it's quality. This becomes a lot more complicated that diamonds, where most diamonds will come with a color and clarity grade, and often some indication of the cut quality. People who are used to buying diamonds will aways want to get ratios of the color stone dimensions, and normally these are pretty meaningless, as there are so many different designs, and each design will be modified depending on the gem material and it's refractive index.

Then comes the mark up from wholesale to a selling price. The old standard was 3X. Well in todays world of the internet this really isn't possible in most cases unless you are dealing with a very rare material where there is no other stone that it can be compared to. So vendors have a much higher overhead than others, and need a larger margin. There there is the philosophy of replacement cost. Some people will base the selling price on what they paid for the rough, so older rough, purchased at lower prices can be sold for less, others will consider current market replacement cost for the rough, and sell at "todays" price.

 

[chrono]

Nothing more to add really since everyone's got it covered.
1. Subtle nuances in colour is what makes the difference in pricing.
2. Photography variances (some pictures are better/worse than the actual stones).
3. Overhead (different markup or pricing structures, old/new stock pricing, how quickly a vendor wants to move inventory, etc.)