First time diamond wholesale purchase

[Texas Leaguer]

I think the AGS premium comes from one and only one source. Consumer demand. The GIA preference comes from the trade. They’re safe and they’re easy to sell. I’m reminded of an old rule from the personal computer business a few decades ago. No one was ever fired for buying IBM. ‘Clones’ were plentiful, half the price and often better but it didn’t matter. IBM ruled the roost and businesses bought IBM. 20 years later you’ll notice that this has changed. Clones are no longer called clones and they stand or fall on their own merits. IBM isn’t even in the business any more.

Watch out GIA!

Seriously, I agree. And I think that supports my generational theory.

Here's another explanation with regard to the high premium for smalls. The cost of cutting to AGS0 standards in terms of handling time and weight loss is proportionately higher relative to the total stone cost on smalls than bigs, so you would expect the smalls to trade for the highest premiums.

 

[John P]

The points about higher weights, yield etc, are surely valid.

However, before drawing any sweeping conclusions about AGSL, I'd like to add some perspective.

I posted the original Rap Conference graphic to demonstrate how diamonds graded by certain labs (EGL locations specifically) trade at a significant discount behind industry doors, compared to stricter labs. By the way, that's also why Rap provides the data.

As it relates to AGSL, however:

1. All data is limited to diamonds traded B2B on RapNet. Of more than 1,000,000 included in the 2014 data, those representing AGSL accounted for less than 1% of the total, and possibly less than 0.5% (asked at the conference). Today I find 2,151 AGSL listed on RapNet (0.50-2.99) compared to >343,000 GIA and >115,000 EGL, IGI, HRD.

2. The chart data is limited to wholesale/virtual diamonds in lists. No dedicated supply is represented. No showroom lines are represented. No boutiques are represented. No brands are represented. Only diamonds sold through the RapNet trade platform.

3. If we could include AGSL's dedicated supply output we'd have a stronger sample-size since more AGSL reports (proportionately) go to dedicated supply lines, brands and boutiques than appear on RapNet.

With the above stipulated, I asked one of Rap's people why they list AGSL with the other "big labs" (charts above) when they are relegated to "OTHER" (chart below). I'm told they considered not listing them, but the standout data of AGSL being >100 in most sizes - where all others show <100 - warrant them being included. I would say that's a notable accomplishment.