Brainstorm:A consumer commissioning a cut diamond from rough

[OoohShiny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

I must confess to being late to the party and having only recently arrived home after the PS GTG in Vegas (via France and Italy - its a tough life) that there is the possability to add more science and predictability into recutting.
Here on DB is a selection of recuts from existing polished - and of course that is easier than from rough, but the stakes are high to much higher.

https://www.dropbox.com/sh/gkz59nfan4zgho7/AAC8U8WT-ganbvHAccwkz_6Aa#lh:null-Z642.JPG
it may take a while to download all 44 pairs.
Enjoy. Where is Kenny?

Edited to note that Yoram considers this cheating. I think its just cleva

Wow

Some of those must have been seriously expensive stones in the first place so it must have been brave to re-cut them!

Especially cutting that 12ct VVS1 Fancy Light Brownish Yellow down to a 9ct Fancy Brownish Yellow!

 

[diamondseeker2006]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Wow, if that isn't proof that cut isn't everything, I don't know what is!!! It also is enlightening that rb cut is apparently not good at all for colored stones.

 

[kenny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Thanks Garry for that fascinating and educational link.

I knew a recut could improve the tone/saturation grade of a fancy colored diamond, but didn't know it could change the hue itself.
Also of surprise is how the hue change may increase or decrease the value.
Talk about a risky business!!!
Here are the examples:

Fancy Light Blue to Fancy Greenish Blue
Very light Blue to Fancy Light Greenish Blue
Very Light Blue to Fancy Greenish Blue
Very Light Blue to Fancy Light Greenish Blue
Two went from Very light Green to Fancy Light Blueish Green
Very light Green to Fancy Light Yellowish Green, and from 1.75 to 1.16 ct (From PURE green to Yellowish Green? OUCH!)
Light Blue to Fancy Light Greenish Blue
Very Light Pinkish Brown to Light Orangish Brown (losing the pink had to be a disappointing blow value-wise.)
Fancy Greyish Yellow to Fancy Yellow

By far the biggest money-printer was the Fancy intense Yellowish Green to Fancy Vivid Green.
A pure green sells for about a zillion times more than a yellowish green.

It reminds me of the amazing story of Shmulik Polnauer, Lebish's GG, spotting the potential in a 1.71 ct Fancy Intense Purplish Pink radiant in Argyle's 2011's Tender Auction.
He recognized that touching up only a few facets (and losing only 0.03 ct. 1.71 down to 1.6 would bump it up from Fancy Intense into GIA's Fancy Vivid grade ... again printing a TON of money.
Talk about a golden boy!
http://www.leibish.com/the-leibish-prosperity-pink-1-68ct-vivid-argyle-pink-diamond-article-341

Cheating or not there's so much money at stake that cutting FCDs for stronger color and more valuable hues is just an economic reality.
I don't think anyone is in the business to not make money.
This does make an FCD Round Asscher or an Emerald cut with nice color all the more desirable and valuable IMO since those shapes do not amp up the color.
I don't think I've ever seen a red in one of those 3 cuts.

 

[Rockdiamond]

Re: Brainstorm:A consumer commissioning a cut diamond from r

We recut an S-T cushion once- and got a Fancy YELLOW Radiant.
Our cutter said it was one of the biggest transformations he'd seen.
I'd love to take credit for thinking of this to make money....but I can't
We didn't re-cut to improve the color ( I actually loved the S-T)- rather the culet got damaged during setting- it looked like a bomb had gone off in the stone- so a recut wasn't optional.
We started with a 3.55ct S-T VS2 cushion modified brilliant and finished with 3.18ct Fancty Yellow VVS2 radiant

Measurements went from 9.67 x 9.55 x 5.94 mm to 8.59 x 8.11 x 5.23 mm


Kudos to Victor, who's apparently got a workable system for commissioning stones from rough.
Personally, I am more comfortable offering clients a known quantity.
The risk is ours.

but like others, we'll be watching the thread to glean ideas

 

[Evert P Botha]

Re: Brainstorm:A consumer commissioning a cut diamond from r

There are so many planes to this piece of (rough) conversation...

Yes, consumers are finding diamonds at Crater of Diamonds in Arkansas for a relatively small investment (daily rental & equipment). Some of these are being cut and polished, and some of these are being set in jewellery as is.

Unfortunately, the minute someone outside of the diamond and jewellery manufacturing (and trading) industry parts with their hard-earned cash to buy rough, their losses start adding up almost immediately. When purchasing rough, an experienced diamantaire will know, within minutes whether the parcel or piece presented is worth spending the time to further examine, let alone negotiate price (outside of established sights). This is not something you learn in some crash-course- this is something that takes many years to master.

So by the time said outsider is presented with the goods, it has already been rejected by the trade, has passed through too many hands and it already out-priced. For whatever reason a parcel or piece has been rejected- it has been rejected for a reason- there's no money in it. Far too many outsiders are buying into "manifests"- a word banned in our vocabulary- when I see it in an email, I delete the email, when I hear it over the phone- I hang up without saying another word.

If it is a large and exceptional piece that if offered on auction- it may be a different story- but most of these are snatched up by the trade.

I have yet to see someone outside of the industry strike it lucky with a parcel or rough, or even a piece of rough that they've purchased.

If you know the story, "Those sardines weren’t for eating; they’re for selling!"

 

[diagem]

Re: Brainstorm:A consumer commissioning a cut diamond from r

I fully agree consumers shouldn't buy rough Diamonds (period.)
But a consumer "commissioning a cut Diamond from rough Diamonds" is not the same (at least not my intentions.)

I believe consumers might enjoy the journey their Polished Diamond went through, in that case they purchase the polished Diamond based on the rough potential. It's not exactly the same as purchasing an already graded polished Diamond from an existing stock list without any recorded history as rough does entail some range in qualities etc...

The question, will they be willing to accept a pre-approved range in price & quality?

The journey on speciality cut Diamonds is an interesting one, we (trade) should be pretty close in our estimates so if the consumers are willing to share that range they could enjoy a nice buying experience and at the same time get a recorded timeline of the process their Diamond went through.

 

[diagem]

Re: Brainstorm:A consumer commissioning a cut diamond from r

I must confess to being late to the party and having only recently arrived home after the PS GTG in Vegas (via France and Italy - its a tough life) that there is the possability to add more science and predictability into recutting.
Here on DB is a selection of recuts from existing polished - and of course that is easier than from rough, but the stakes are high to much higher.

https://www.dropbox.com/sh/gkz59nfan4zgho7/AAC8U8WT-ganbvHAccwkz_6Aa#lh:null-Z642.JPG
it may take a while to download all 44 pairs.
Enjoy. Where is Kenny?

Edited to note that Yoram considers this cheating. I think its just cleva

I see it realy got to you Garry... , yes, I miss finding those round brilliant cape Diamonds which now are "Fancy" Colored faceup CMB/SMB'S.
Sorry...

 

[Evert P Botha]

Re: Brainstorm:A consumer commissioning a cut diamond from r

It is a novel idea- and certainly worth exploring.
Speaking from experience- we know the $/ct for the box, the range and expected yield- how to package is relatively easy- how to price...now that's the question.

 

[Serg]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Thanks Garry for that fascinating and educational link.

I knew a recut could improve the tone/saturation grade of a fancy colored diamond, but didn't know it could change the hue itself.

for same absorption spectrum the Hue strongly depends from length of ray path because different wavelength's have different absorption with slow changing.

see for example changing from yellow to red.
for this spectrum absorption curve has small slope from yellow to red.( yellow has higher absorption)
in result long ray path has orange-red hue, short ray path has yellow hue.
to receive from this spectrum red you have to use cushion, radiant cuts or round cut for big rough. small round diamond gives yellow for same spectrum

 

[MelisendeDiamonds]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Hey there ol friend,
The key is transparency and clear communication.

If you are being transparent than you would be disclosing an awful lot of information about your business.

If you were using the costs+ model some fundamental questions come to mind.

1) What is the cost of the rough? (secondary market by the piece or as part of a box?)
2) What is the cutting cost(and built in margin)?
3) What is the design royalty?
4) What is the retail markup(and built in margin) and any other costs (shipping, AGS/GIA, Insurance etc)?

Would you want one or more of these things being disclosed to the consumer? Are you showing them invoices?
Considering that your retail margin is added how is the consumer getting involved at the Wholesale level?

I think If I was offering such an arrangement (I don't) I would not want to be disclosing all of these things.

 

[MelisendeDiamonds]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Victor Canera|1404423943|3706266" data-source="" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch">

The client does not assume the risk of polishing though. If the diamond explodes during manufacturing, that can not be the client’s responsibility.

Up until now, we’ve offered a +-1 grade color\clarity possibility to the client and things have worked out perfectly.

At the end of the day, the consumer would not not lose their money (i.e. if the diamond burst during polishing) but they should be prepared for very slightly different outcomes (on rare occasions) and have those possibilities presented to them in a clear way.

Sounds like a fair solution. This is one seems based on market value not costs+. Are you providing several specific prices based on potential outcomes or a set price and a range of adjustments?

What would happen if the outcome was off by 2 color or clarity grades?

 

[John P]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Hi Evert - Nice to see you posting here.

 

[Evert P Botha]

Re: Brainstorm:A consumer commissioning a cut diamond from r

John,


Always keen to learn a little more.
There are some serious Rocks in here...will need to train Mike and get him to start sharing his insights...

 

[kenny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Thanks Serg.
Fascinating and surprising.

 

[thecat]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Serg, it's fascinating that hue is dependent on cut and size of stone. Wouldn't all fancy cutters have such knowledge on hue and saturation? I suppose they will realise sooner or later from observations even if they don't know the theory. Yet the before stones in Garry's chart still exist. Maybe those were cut by beginners?

 

[Karl_K]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Hey there ol friend,
The key is transparency and clear communication.

If you are being transparent than you would be disclosing an awful lot of information about your business.

If you were using the costs+ model some fundamental questions come to mind.

1) What is the cost of the rough? (secondary market by the piece or as part of a box?)
2) What is the cutting cost(and built in margin)?
3) What is the design royalty?
4) What is the retail markup(and built in margin) and any other costs (shipping, AGS/GIA, Insurance etc)?

Would you want one or more of these things being disclosed to the consumer? Are you showing them invoices?
Considering that your retail margin is added how is the consumer getting involved at the Wholesale level?

I think If I was offering such an arrangement (I don't) I would not want to be disclosing all of these things.

I don't see where that would have to be disclosed.
All that is needed is the expected outcome and a price not how the price was achieved.
A ton of trust is required in this type of arrangement.

A very real threat is to the sale of precut goods if you cap prices and some come in at over the estimate giving the client a stellar deal. After that happens a few times someone will start thinking hey this is a much better deal and want custom rather than precut. Then you have one that comes in on the middle to low end of the estimate and all kinds of trouble erupts.
Now you have a threat to your precut sales and a mad client because they did not get the stellar deal they expected even if they did get a fair deal.
My thinking is that it would have to be limited to certain size ranges to help avoid killing precut sales.

 

[Serg]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Serg, it's fascinating that hue is dependent on cut and size of stone. Wouldn't all fancy cutters have such knowledge on hue and saturation? I suppose they will realise sooner or later from observations even if they don't know the theory. Yet the before stones in Garry's chart still exist. Maybe those were cut by beginners?

Hue and Chroma depend from absorption spectrum, cut and size.
To do right Cut selection you have to measure absorption spectrum firstly( same for fancy color and colorless diamonds)

re:Maybe those were cut by beginners?

I think many bad fancy color diamonds had been cut (5-10)+ years ago. Last five years fancy cut diamonds become better and better( not easy to find good option for recut if fancy cut diamond had been cut in last 5 years)

 

[MelisendeDiamonds]

Re: Brainstorm:A consumer commissioning a cut diamond from r

All that is needed is the expected outcome and a price not how the price was achieved.
A ton of trust is required in this type of arrangement.

Are you setting one price beforehand, a range, or specific prices based on the various outcomes?

 

[Karl_K]

Re: Brainstorm:A consumer commissioning a cut diamond from r

All that is needed is the expected outcome and a price not how the price was achieved.
A ton of trust is required in this type of arrangement.

Are you setting one price beforehand, a range, or specific prices based on the various outcomes?

That has not been 100% worked out yet.
I can not see anyone accepting open ended pricing so there has to be some set limit of some kind.
If there will be one price based on any outcome or a range of prices is up in the air right now.

 

[Paul-Antwerp]

Re: Brainstorm:A consumer commissioning a cut diamond from r

All that is needed is the expected outcome and a price not how the price was achieved.
A ton of trust is required in this type of arrangement.

Are you setting one price beforehand, a range, or specific prices based on the various outcomes?

That has not been 100% worked out yet.
I can not see anyone accepting open ended pricing so there has to be some set limit of some kind.
If there will be one price based on any outcome or a range of prices is up in the air right now.

I really do not see the problem.

As a cutter, you have a piece of rough and an expectation of what will come out. On that basis, you have made the decision to buy the rough. On that same basis, you can give a final price to the consumer for the final stone.

If the stone comes out as predicted, you are happy, and the customer is happy.
If the stone comes out better than predicted, the customer is happy, and you should also be happy, as you chose the bird in the hand over the 10 birds in the sky. In any case, your investment turns faster.
If the stone comes out worse than predicted, that is because of your mistake in the purchase-process, and you need to eat the loss caused by your mistake. You can never put this on the consumer.

Whenever you buy rough, whether you have a potential customer or not, you are making the same estimation. If you are just producing for stock, and you make a mistake, there is no way to have the consumer pay for this. Then, why would you expect this simply because the consumer is present from the outset? It is and always should be the risk a cutter has to carry.

Live long,

 

[diagem]

Re: Brainstorm:A consumer commissioning a cut diamond from r

I really do not see the problem.

As a cutter, you have a piece of rough and an expectation of what will come out. On that basis, you have made the decision to buy the rough. On that same basis, you can give a final price to the consumer for the final stone.


Live long,

The only difference is cutters needs to individually price a rough Diamond when it comes out of a larger rough lot of a plurality of sizes, qualities & shapes.
Then the cost is based on your range of estimation which is again a different calculation of the expected ranges.

 

[kenny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

All that is needed is the expected outcome and a price not how the price was achieved.
A ton of trust is required in this type of arrangement.

Are you setting one price beforehand, a range, or specific prices based on the various outcomes?

That has not been 100% worked out yet.
I can not see anyone accepting open ended pricing so there has to be some set limit of some kind.
If there will be one price based on any outcome or a range of prices is up in the air right now.

I really do not see the problem.

As a cutter, you have a piece of rough and an expectation of what will come out. On that basis, you have made the decision to buy the rough. On that same basis, you can give a final price to the consumer for the final stone.

If the stone comes out as predicted, you are happy, and the customer is happy.
If the stone comes out better than predicted, the customer is happy, and you should also be happy, as you chose the bird in the hand over the 10 birds in the sky. In any case, your investment turns faster.
If the stone comes out worse than predicted, that is because of your mistake in the purchase-process, and you need to eat the loss caused by your mistake. You can never put this on the consumer.

Whenever you buy rough, whether you have a potential customer or not, you are making the same estimation. If you are just producing for stock, and you make a mistake, there is no way to have the consumer pay for this. Then, why would you expect this simply because the consumer is present from the outset? It is and always should be the risk a cutter has to carry.

Live long,

IMO this is the elephant in the living room, and why this whole idea of consumer commissioning cutting blows my mind.

GOG and Paul have very different takes on how this should be priced and who bears the risk for the stone exploding and the lab grades not matching the pre-cut estimates.
IMO, and perhaps this an oversimplification, Paul's is careful to protect the consumer while GOG's is careful to protect the vendor.

I don't know, perhaps it's because Paul is higher on the food chain since I think he's primarily a cutter and GOG is primarily a retail vendor.
Perhaps that means their businesses operate with very different sums of money - so a $10,000 bad guess would affect GOG more than Paul.

Feel free to correct me if I'm wrong in my observations, assumptions and reasoning.

 

[Karl_K]

Re: Brainstorm:A consumer commissioning a cut diamond from r

IMO this is the elephant in the living room, and why this whole idea of consumer commissioning cutting blows my mind.

GOG and Paul have very different takes on how this should be priced and who bears the risk for the stone exploding and the lab grades not matching the pre-cut estimates.
IMO, and perhaps this an oversimplification, Paul's is careful to protect the consumer while GOG's is careful to protect the vendor.

I don't know, perhaps it's because Paul is higher on the food chain since I think he's primarily a cutter and GOG is primarily a retail vendor.
Perhaps that means their businesses operate with very different sums of money - so a $10,000 bad guess would affect GOG more than Paul.

Feel free to correct me if I'm wrong in my observations, assumptions and reasoning.

Kenny your being premature and partially wrong.
If it blows up on the wheel we find another rough or refund the client period. I have already said that.
The other details are not final for the public program.
We have not had to deal with it being lower than the preset value because it has not happened yet in the few that have been done on a case by case basis.
We are trying to nail this down for the public program and your input is appreciated and will be kept in mind but please don't tar and feather us until it is final. :}

 

[Garry H (Cut Nut)]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Here is a take that the Cut Group (Serg, Yuri, Janak Mistry and myself) proposed in 2009 and continue to develop appropriate technologies to enable cutters to list various cut options from the same piece of rough, and as Paul notes, turn the investment faster.
There is an entire 6 page article that I have asked Andrey and Erika to review and post in Articles> Diamond News.

but here is a screen shot of part that is relevant to discussions here:

 

[thecat]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Serg, it's fascinating that hue is dependent on cut and size of stone. Wouldn't all fancy cutters have such knowledge on hue and saturation? I suppose they will realise sooner or later from observations even if they don't know the theory. Yet the before stones in Garry's chart still exist. Maybe those were cut by beginners?

Hue and Chroma depend from absorption spectrum, cut and size.
To do right Cut selection you have to measure absorption spectrum firstly( same for fancy color and colorless diamonds)

re:Maybe those were cut by beginners?

I think many bad fancy color diamonds had been cut (5-10)+ years ago. Last five years fancy cut diamonds become better and better( not easy to find good option for recut if fancy cut diamond had been cut in last 5 years)

Thanks Serg. We would never have known this if not for your interesting sharing. Stick around please.

 

[kenny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

IMO this is the elephant in the living room, and why this whole idea of consumer commissioning cutting blows my mind.

GOG and Paul have very different takes on how this should be priced and who bears the risk for the stone exploding and the lab grades not matching the pre-cut estimates.
IMO, and perhaps this an oversimplification, Paul's is careful to protect the consumer while GOG's is careful to protect the vendor.

I don't know, perhaps it's because Paul is higher on the food chain since I think he's primarily a cutter and GOG is primarily a retail vendor.
Perhaps that means their businesses operate with very different sums of money - so a $10,000 bad guess would affect GOG more than Paul.

Feel free to correct me if I'm wrong in my observations, assumptions and reasoning.

Kenny your being premature and partially wrong.
If it blows up on the wheel we find another rough or refund the client period. I have already said that.
The other details are not final for the public program.
We have not had to deal with it being lower than the preset value because it has not happened yet in the few that have been done on a case by case basis.
We are trying to nail this down for the public program and your input is appreciated and will be kept in mind but please don't tar and feather us until it is final. :}

Tar and feather?
Ouch.

Just reading what has been written.
Don't you see the difference?
Noticing it is not tar and feathering or pressuring all vendors to be the same.

 

[diagem]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Here is a take that the Cut Group (Serg, Yuri, Janak Mistry and myself) proposed in 2009 and continue to develop appropriate technologies to enable cutters to list various cut options from the same piece of rough, and as Paul notes, turn the investment faster.
There is an entire 6 page article that I have asked Andrey and Erika to review and post in Articles> Diamond News.

but here is a screen shot of part that is relevant to discussions here:

A few interesting questions for you on this subject Garry.
Since 2009..., why is it not rolling?
What is keeping this project from taking off?
And you mention twice price adjusting according to an open "price-list", what price list are you aiming to? And if we can get a glimpse at that price list structure and how it's build?

 

[Karl_K]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Tar and feather?
Ouch.

The tar and feather part was a joke hence the smile :}

 

[Garry H (Cut Nut)]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Here is a take that the Cut Group (Serg, Yuri, Janak Mistry and myself) proposed in 2009 and continue to develop appropriate technologies to enable cutters to list various cut options from the same piece of rough, and as Paul notes, turn the investment faster.
There is an entire 6 page article that I have asked Andrey and Erika to review and post in Articles> Diamond News.

but here is a screen shot of part that is relevant to discussions here:

A few interesting questions for you on this subject Garry.
Since 2009..., why is it not rolling?
What is keeping this project from taking off?
And you mention twice price adjusting according to an open "price-list", what price list are you aiming to? And if we can get a glimpse at that price list structure and how it's build?

Hi Yoram,
Firstly this was a presentation that we planned for our second International Diamond Cut Conference, and we cancelled that event because of the financial crisis.

Secondly, in order to expedite the proposal we would require a financial backer(s) - for example there is a lot of logistics involved, and that is not our business.

Thirdly, there is a lot of technology and equipment and patents required. Many of these are works in progress. Some are completed. ViBox is a key initial tool to enable a consistent cut based stereo (3D) movie making capacity for existing diamonds. Inclusion plotting, photographing and virtual modelling of inclusions https://www.google.com/patents/US86...a=X&ei=VU2_U46hCMjd8AWI7YKoBg&ved=0CBwQ6AEwAA (which has never been done before).

An open list could be Rap

 

[kenny]

Re: Brainstorm:A consumer commissioning a cut diamond from r

Thanks Karl.