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conversation with a custom jewelry designer....very confused

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shlo_mo_shun

Rough_Rock
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So last night I was with my friend, and his wife is a custom jewelry maker. She was asking about the stone I had just proposed with, color, clarity, etc...

Now mind you, she mostly deals with gemstones, but less so in diamonds. It was clear to me when we were talking that I knew more about cut (real cut, not shapes), H&A (which she thought was a special proprietary cut), even clarity, than she did.

But anyways, the question turned to price, and she asked in confidence what I had paid. Her guess was way, way, way low. She was guessing my stone would be like 2k. For reference, my stone was an ACA 1.26 G-SI1.

Now, not only did I feel silly telling her what i really paid (7800), but now I''m wondering what the real deal is. She was shocked, and showed me a couple of stones she had bought recently. Much smaller, but far less expensive too. The largest she had bought was a under a carat, but it was like $1000. She had just helped get a 1 carat Emerald for her brother-in-law that was like an H-VS1, for really really cheap too. Some tiny ones, probably 1/4 carat, she said she got for $20! So what gives?

Besides the initial shock, the male-ego in me preventing me from feeling too ripped off, as first of all, Im fairly confident that my ACA is far and away more amazing than what she had (I really hope). Besides, I looked all over, both in retail and online for diamonds, so I know what the market rate is, generally speaking. Besides, the average diamond purchase is what? 5000, and about 1 carat? So if mine is larger, and more brilliant than the average, what I paid seems a fair price.

So I''m left with 2 possibilities. One is that the markup to the consumer on diamonds is rediculously high. Like 2-4x what they acutally cost. You hear that the online business has really cut into diamond markup, but are they still marking them up rediculously from wholesale?
Or that she is dealing in stones that aren''t well cut, and doesn''t really know (or possibly care) about the difference. Supporting this point is even that she commented that she hadn''t see the stone yet, so she couldn''t say for sure what she''d think it would be worth. I''d love to believe this is the primary reason that I paid more than 3x more than she thought I should, but either way, it''s a hard pill to swallow.
Just wondering what your thoughts are on this whole interaction? I didn''t work with her before hand, because she had made comments in the past about how difficult it is professionally to do work for friends, but after last night, she was saying that i should have talked to her. She was actually pretty graceful about the whole thing, and I don''t feel that bad about it....just curious about the whole thing. Thanks for your thoughts.
 
There is a HUGE difference in price between an uncertified, crappily cut stone and an AGS ACA stone. So my guess is that a large part of the price difference was there, because there certainly is not a huge markup in the diamond industry from dealer to consumer as far as I understand.
 
Yea, when you are talking about low color and clarity then prices can drop dramatically. Especially if you go below J, say K, and hit the SI2 mark you can get a 1.2ct for a good 3300 certified.

Take away the certification and drop it to I1 and a 1.2ct would go for even less.

but do you really want to give your wife, as an Ering, an uncertified poorly cut K SI2? I wouldnt. And yes, there would be a visual difference. Thus the demand from us thoughtful guys to give what society calls high quality diamonds (after all we are really only buying diamonds because society has lead us down that path in the firstp lace) as symbols of our love obviously causes prices to increase significantly.

To be honest though, I think the fact that she compared your 1.26ct diamond to a diamond that was "under 1 ct" with no more specific ct range and no mention of anything else (though she had just asked you your specific information) is suggesting to me that she was upset about something and was trying to "get you."

That theory is further propogated by the fact that her most recent largest purchase was under 1ct and was rather cheap, indicating low quality which further indicates she probably doesnt have the resources to get her hands on many diamonsd anywhere near your quality and certainly doesnt stock them with your paperwork/certification.

and If I dared to take it a little bit further with the limited info I have she PROBABLY was feeling defense and pissed off at you, and embarressed, when it became apparant that you knew more about cut than her. you may have come on pretty strong in your ethusiasm and started "teaching" her (in her mind), so in her vulnerable insulted position she lashed out at you with:

1) unspecfied diamond at a rock bottom wholesale price, when its obvious she has to know the clarity, color, and exact ct weight of her largest recent purchase, or she is just a fool and probably forgot what she paid anyway.

2) 1.26 compared to under 1ct, just not a fair price comparison there

3)compared a diamond to an emrald relating priceVsCt weight withtou any tutorial on how general market prices differe between the two gems.


Thus, it looks to me like she was just trying to one up you and take her rightful position as jeweler back. But hopefully I am wrong, looks to me like an obvious attempt at revenge though.
 
Frankly I’m a little surprised that someone selling diamonds doesn’t understand such simple things as ‘a little under a carat’ is importantly different from a 1.26cts and that ‘like H VS2’ is not the same as H VS2.

That said, ANY ¼ carat for $20 is unrealistic, at wholesale or not. Something else is going on here. Midnight pawn shops pay better than that. Maybe they were 0.05cts, maybe she bought them from a consumer and she found a sucker but if they’re anywhere near transparent (I2+) in any color above about Q they will cost a jeweler more than that in the ordinary course of business. If they’re actually pretty or even decent it will be a whole bunch more.

The most likely explanation is that she’s not applying comparable grading. The most expensive 1.3ct G/VS1 listed in the database is just over $10k and there are quite a few in that neighborhood. The cheapest 0.91 I/SI1 (which is ‘like H/VS2’) is $2300 with quite a few stones offered in that neighborhood as well. That’s your factor of 4. If she doesn’t understand the difference then she shouldn’t be selling diamonds and she’s going to be a target for unscrupulous wholesalers who recognize an easy mark when they see one. She’s wise to avoid the diamond business but the colored stone business is even worse in this regard. The difference between a $500 sapphire and a $2000 sapphire is the same sorts of issues.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
I used to buy diamonds over in Antwerp as part of my job.

If I had found great diamonds at $2k for a carat - I''d have been unable to pay the rent I''d have been buying them so fast for myself!

The only diamonds where I''ve seen mega mark-up is on the teeny 1pt ones that you see in things like ''hot diamonds'' and similar silver jewellery. I was getting them for a lot less than $1 each.

However, prices I''ve seen here on PS are not that much above wholesale. I think what you paid sounds pretty appropriate.
 
‘Wholesale’ is a funny thing. People use it to mean rock bottom prices, dealer cost, manufacturers selling price and all manner of other things. Obviously jewelers in the business of buying things for one price and selling them for higher prices and there’s a fair amount of discussion that goes on regarding their profit margin at this. Presumably there is some fixed ‘wholesale’ price for things that they buy that can be compared to the selling prices and determine markup.

Unfortunately, this simply isn’t true. Superficially similar diamond can cost wildly different amounts depending on details that are far from obvious to the casual viewer. Not surprisingly, the cheap suppliers don’t accentuate these differences in their sales pitches and the expensive folks do. This happens just the same at wholesale as it does at retail. Some wholesalers are selling the stores things that face up big that they can sell for not much money while others are selling things that are cut as close as they can to blotting out the sun with their brilliance and that the stores can sell at a premium. It’s a big world and there room for lots of different strategies but it’s important to understand what you count as important in order to choose what route you want to take. You’re not going to get a fireball for the price of a sugar cube, and neither is your jeweler. It just doesn't work that way. There IS a viable market for 3ct I3/L diamonds that have been cut like a turnip and, quite honestly, pricescope is probably not the place to go to get one if this is what you want.

Markupwise, the best item in a jewelers store is watch batteries. These things rock. They cost about 40cents and you can sell them for 8 bucks or so with a 2-minute install. That’s a 2000% mark!!! Customers aren’t usually especially price sensitive and if they own several watches they keep coming back again and again. About half the watches out there use the same battery so there's not even a big problem with inventory. You even get to sell other things, or at least try to, while the customer is waiting. The problem is that any way you cut it, it’s still just an $8 sale. If you’ve got the right location where you can have a line at the watch counter waiting for batteries it’s a darned good business but if you’re like most stores and only sell a couple per day, you’ll never make the rent. When people want to pick on jewelers for having big markups, they inevitably pick on this sort of thing and produce an ‘average’ markup for jewelry stores. Silver tourists charms, freshwater pearl earrings, cheapie chains all have wonderful margins and they’re great items if you have the kind of store that can move them out the door in quantity. Diamonds don’t, and big diamonds are downright laughable. For a typical store to actually land a sale on a 3ct+ in a nice stone they need to shave their margins to the bone. 20% is doing great, 10% is more like it and it’s increasingly common for the dealers total margin on the rock to be in the neighborhood of the sales tax. This too can be ok if you can do a decent volume in them but if the store only sells one a month, it makes for tough going. Would you like a watch battery with that ma’am?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
Date: 9/2/2007 4:56:07 PM
Author: denverappraiser
You’re not going to get a fireball for the price of a sugar cube, and neither is your jeweler. It just doesn''t work that way. There IS a viable market for 3ct I3/L diamonds that have been cut like a turnip and, quite honestly, pricescope is probably not the place to go to get one if this is what you want.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
Dying over here
36.gif
. That''s a gem of a description right there LOL.
 
It has been my experience that once in a while you will meet a great artist or custom jeweler
who just isn''t well versed in diamonds. They can design and create a beautiful custom ring but
diamonds may not be their field of expertise.

Jeff Averbook, G.G./ Appraiser

www.metrojewelryappraisers.com
 
Mark,
Did you buy the stone in your other post? That thing is gaga gorgeous! She has no clue what she is talking about! As you stated yourself, you did your homework and are now knowledgeable about diamonds. Don''t worry, just enjoy your beauty!
 
Date: 9/2/2007 10:36:06 PM
Author: Richard Sherwood
She''s clueless...
Richard Sherwood..
35.gif


not always politically correct but always fair and sometimes even balanced.
9.gif


Jeff Averbook, G.G.

www.metrojewelryappraisers.com
 
Date: 9/2/2007 2:17:34 PM
Author:shlo_mo_shunSo I''m left with 2 possibilities. One is that the markup to the consumer on diamonds is rediculously high. Like 2-4x what they acutally cost. You hear that the online business has really cut into diamond markup, but are they still marking them up rediculously from wholesale?
Or that she is dealing in stones that aren''t well cut, and doesn''t really know (or possibly care) about the difference. Supporting this point is even that she commented that she hadn''t see the stone yet, so she couldn''t say for sure what she''d think it would be worth. I''d love to believe this is the primary reason that I paid more than 3x more than she thought I should, but either way, it''s a hard pill to swallow.
Just wondering what your thoughts are on this whole interaction? I didn''t work with her before hand, because she had made comments in the past about how difficult it is professionally to do work for friends, but after last night, she was saying that i should have talked to her. She was actually pretty graceful about the whole thing, and I don''t feel that bad about it....just curious about the whole thing. Thanks for your thoughts.
This surprises me a lot. Almost all my clients become my friends if they are not already so it makes no sense to me at all.

Also, if she is selling diamonds for these prices, please send her to me. I will buy her junky cuts and send them to Paul for making into masterpieces. I am betting that those prices are more the result of miffed feelings that you did not talk with her and that a reality check will produce numbers greatly different than what she quoted...

Wink
 
Is she going to do your setting? I would definitely check out other sources for a custom setting before going to her to make it.
 
hey all, thanks for the posts. I really do appreciate the feedback. to answer some posts and sum up my feelings:

Yes, the stone in the other post is the one I purchased. Yes, it is amazing. My fiance is floored over it, and we''re both excited for when she comes home from Amsterdam so we can start shopping for a permanent setting. I highly doubt we''d use this jewler, mostly because we''re looking at various pave designer settings, and I don''t think that''s really what she does.

As far as my friend''s wife. I''ve thought really hard about where she was coming from and have determined it''s some combination of most peoples opinions. I don''t think she''s real knowledgable, as I said, she deals mostly in custom jewelry,gemstones, antiques, etc...., she actually makes fantastic creations, but they aren''t normally diamonds. I''m sure she''s not as knowledgable about them as the folks here (or even myself.) Perhaps I actually gave her more credit going in as she''s a jewelry designer, than she deserves. Maybe she really knows next to nothing about them, except the bare basics of the 4C''s. How would I know? I didn''t grill her about them, and barely took more than a minute looking at her stones myself so I can''t vouche for the quality other than what she said they were.

Second, although I doubt she was trying to rub it in my face, there could have been a bit of jealousy or some such involved in her statements. Although she is the wife of a good friend, we''re not super close, and she can be a difficult person sometimes, so who knows where she''s really coming from.

I very much appreciate the posts about the nuances of wholeselling and margins and such. I have no real problem hearing the markup on luxury items is 10-20%. It''s when I''m told they are 100-200% that I start to get concerned. I''ll take the whole experience and write it off as someone who didn''t have the full scope of knowledge, but also didn''t want to appear or admit to such. I know how that goes, it''s difficult to admit when people ask me questions about my professional field that I don''t know the answer.

In the end, thanks all for your responses. I''m feeling fine about everything again, and the only outstanding question is what her reaction will be when she sees it in person later this month when we have an engagement get-together. I''ll update this thread if I have any specific stories to add from that experience, but otherwise, back to lurking.
 
Date: 9/4/2007 7:24:16 PM
Author: shlo_mo_shun
hey all, thanks for the posts. I really do appreciate the feedback. to answer some posts and sum up my feelings:


Yes, the stone in the other post is the one I purchased. Yes, it is amazing. My fiance is floored over it, and we''re both excited for when she comes home from Amsterdam so we can start shopping for a permanent setting. I highly doubt we''d use this jewler, mostly because we''re looking at various pave designer settings, and I don''t think that''s really what she does.


As far as my friend''s wife. I''ve thought really hard about where she was coming from and have determined it''s some combination of most peoples opinions. I don''t think she''s real knowledgable, as I said, she deals mostly in custom jewelry,gemstones, antiques, etc...., she actually makes fantastic creations, but they aren''t normally diamonds. I''m sure she''s not as knowledgable about them as the folks here (or even myself.) Perhaps I actually gave her more credit going in as she''s a jewelry designer, than she deserves. Maybe she really knows next to nothing about them, except the bare basics of the 4C''s. How would I know? I didn''t grill her about them, and barely took more than a minute looking at her stones myself so I can''t vouche for the quality other than what she said they were.


Second, although I doubt she was trying to rub it in my face, there could have been a bit of jealousy or some such involved in her statements. Although she is the wife of a good friend, we''re not super close, and she can be a difficult person sometimes, so who knows where she''s really coming from.


I very much appreciate the posts about the nuances of wholeselling and margins and such. I have no real problem hearing the markup on luxury items is 10-20%. It''s when I''m told they are 100-200% that I start to get concerned. I''ll take the whole experience and write it off as someone who didn''t have the full scope of knowledge, but also didn''t want to appear or admit to such. I know how that goes, it''s difficult to admit when people ask me questions about my professional field that I don''t know the answer.


In the end, thanks all for your responses. I''m feeling fine about everything again, and the only outstanding question is what her reaction will be when she sees it in person later this month when we have an engagement get-together. I''ll update this thread if I have any specific stories to add from that experience, but otherwise, back to lurking.

Please do keep us updated, especially when you get the setting completed. Best of luck!
 
It isn''t that uncommon for them too not care about diamonds that much, the benchman I use couldn''t care less about diamond cut and all the things we go on and on about but he is genius when it comes to making jewelery and an awesome craftsman.
Too him a diamond is a diamond.
He mostly does b2b setting work for other Jewelers but will set Internet stones for consumers so he rocks in my book :}
 
So here is the final update on this thread. The friends wife got a look at the stone last week at the engagement party, but I casually asked my fiance and she didn''t mention the friend saying anything special about it then.
Then, last night, a group was together for dinner and she gave an out of the blue appology for being really wrong in her initial reaction to the price. She said she had done more research into it, and that what I had paid was actually a pretty good price and she was actually very relieved to see that I got a good deal. She said she was just not aware of the premium that occurs when you get over 1c. So basically, you all were right, and she was wrong, and although I got over it initially, it''s nice closure to feel completely assured of my purchase once again. Thanks all.
 
Date: 9/2/2007 2:17:34 PM
Author:shlo_mo_shun
So last night I was with my friend, and his wife is a custom jewelry maker. She was asking about the stone I had just proposed with, color, clarity, etc...

Now mind you, she mostly deals with gemstones, but less so in diamonds. It was clear to me when we were talking that I knew more about cut (real cut, not shapes), H&A (which she thought was a special proprietary cut), even clarity, than she did.

But anyways, the question turned to price, and she asked in confidence what I had paid. Her guess was way, way, way low. She was guessing my stone would be like 2k. For reference, my stone was an ACA 1.26 G-SI1.

Now, not only did I feel silly telling her what i really paid (7800), but now I''m wondering what the real deal is. She was shocked, and showed me a couple of stones she had bought recently. Much smaller, but far less expensive too. The largest she had bought was a under a carat, but it was like $1000. She had just helped get a 1 carat Emerald for her brother-in-law that was like an H-VS1, for really really cheap too. Some tiny ones, probably 1/4 carat, she said she got for $20! So what gives?

Besides the initial shock, the male-ego in me preventing me from feeling too ripped off, as first of all, Im fairly confident that my ACA is far and away more amazing than what she had (I really hope). Besides, I looked all over, both in retail and online for diamonds, so I know what the market rate is, generally speaking. Besides, the average diamond purchase is what? 5000, and about 1 carat? So if mine is larger, and more brilliant than the average, what I paid seems a fair price.

So I''m left with 2 possibilities. One is that the markup to the consumer on diamonds is rediculously high. Like 2-4x what they acutally cost. You hear that the online business has really cut into diamond markup, but are they still marking them up rediculously from wholesale?
Or that she is dealing in stones that aren''t well cut, and doesn''t really know (or possibly care) about the difference. Supporting this point is even that she commented that she hadn''t see the stone yet, so she couldn''t say for sure what she''d think it would be worth. I''d love to believe this is the primary reason that I paid more than 3x more than she thought I should, but either way, it''s a hard pill to swallow.
Just wondering what your thoughts are on this whole interaction? I didn''t work with her before hand, because she had made comments in the past about how difficult it is professionally to do work for friends, but after last night, she was saying that i should have talked to her. She was actually pretty graceful about the whole thing, and I don''t feel that bad about it....just curious about the whole thing. Thanks for your thoughts.
The price you paid was EXCEPTIONAL for what you got - a top make branded stone. This woman clearly has no knowledge of that market or price point, or else she''d know it too.

Which leads me to say......thank GOD you didn''t talk to her first. She''d have let you down a path that you''d have later regretted (if you care about all about cut/sparkle).

You did amazingly well on your purchase. Don''t even remotely let yourself think she knows enough to warrant comment.
 
Your experience is equivelent to buying a NEW Porsche Caymen S and driving it on to the local used car lot and telling they sales guy what you paid for it... And getting a response like "you should have come to us first, we could have sold you a sporty car for a lot less!"

I concur with Wink, if we stopped selling to friends, we wouldn''t have any business
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I''m glad everything was smoothed over by your friend''s wife. I''m glad she did some more reasearch and was polite enough to apologize. She probably knew that the price differences she was suggesting put you at discomfort and it was nice of her to admit her ignorance and make things right. Your stone is amazing by the way, I can''t wait to see the final product.
 
Date: 10/1/2007 4:08:34 PM
Author: niceice
Your experience is equivelent to buying a NEW Porsche Caymen S and driving it on to the local used car lot and telling they sales guy what you paid for it... And getting a response like ''you should have come to us first, we could have sold you a sporty car for a lot less!''

I concur with Wink, if we stopped selling to friends, we wouldn''t have any business
2.gif

Thanks buddy! Come around more often, we miss you!

Wink
 
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