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Diamond pricing variations within same vendor

realazy

Rough_Rock
Joined
Oct 19, 2016
Messages
30
I have been lurking and reading lots and lots of threads lately. I never thought I would be so interested in the diamond business until I started researching. I already purchased a ring from JA which hasn't arrived yet, but the more I read the more I'm second guessing myself. I bought a diamond that was priced on the low end of comparable stones of the same cut, color and clarity. It scored well on the HCA and it was sort of an impulsive buy.

I've also read that diamonds never have "deals" and everything is priced for a reason. What I have noticed is that during my searches (at the same vendor, namely JA), anytime I find a diamond that is outside of it's "price band" like a VS2 priced lower than SI1's of similar color and size, or a F priced lower than a G of the similar size and clarity, it usually has a grading report that is really recent (like 2-4 weeks old) vs. the rest of the comparables with reports from 2-3 months+ ago.

Has the diamond market been trending down so that the recently cut stones are selling for less? I've read articles that rough prices have been trending downwards since late 2015.

Or are there hidden problems in these price anomalies or "deals"?

I bought this on a whim as it was priced at $6440 vs. other 1ct F Vs2s on JA over $7,000 with similar specs. It has the comment "clarity grade is based on clouds not shown", but the videos looks clear and transparent and it is a VS2, so i bought it knowing I might have to return it.

https://www.jamesallen.com/loose-diamonds/round-cut/1.01-carat-f-color-vs2-clarity-excellent-cut-sku-2101658

For example this one is 0.02ct more, but same clarity comment, color, clarity, and fluorescence is $800 more. and I think the one I bought looks better in the video.

https://www.jamesallen.com/loose-diamonds/round-cut/1.03-carat-f-color-vs2-clarity-excellent-cut-sku-2056083

Just hoping to start a conversation on price variations. I know that variations between vendors is normal due to business costs, this is more regarding within the same vendor.
 

realazy

Rough_Rock
Joined
Oct 19, 2016
Messages
30
Another thought, since a lot of these vendors have virtual inventory, do suppliers try to undercut each other?

Also, would it not benefit the selling vendor to mark them up more to similar diamonds even if the supplier drops their price? Especially if large vendors like JA and BN seem to have exclusivity contracts with the suppliers.

All these topics are interesting to me as I'm an engineer that works on the business side of things, so I like to understand how things work.
 

PintoBean

Ideal_Rock
Premium
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Jul 27, 2011
Messages
6,377

realazy

Rough_Rock
Joined
Oct 19, 2016
Messages
30
PintoBean|1478034680|4092745 said:
Utilizing the HCA to see if either stones should be knocked out of consideration (We would throw out any stone 2 or higher in score)
https://www.jamesallen.com/loose-diamonds/round-cut/1.01-carat-f-color-vs2-clarity-excellent-cut-sku-2101658
HCA is under 2 at 1.4. so a keeper.

https://www.jamesallen.com/loose-diamonds/round-cut/1.03-carat-f-color-vs2-clarity-excellent-cut-sku-2056083
HCA 3.8 - this would be a stone I wouldn't consider.
Well that's why I bought stone 1 on a whim. It doesn't explain why stone 1 is $800 cheaper.

I'm wondering if any one has comments on how the diamond market works? or theories?
 

dazzlerazzle

Shiny_Rock
Joined
Aug 25, 2016
Messages
130
I am by no means an expert, but you seem to want to have a conversation, so I guess I'll add my 0.01.

My SO and I are looking at commissioning a custom cut diamond in January/February time-frame, so I have been keeping my eyes peeled for any references to diamond/rough prices. Apparently, prices are still trending downward and this is starting to impact not only diamond selling prices, but buyers' ability to "cash-in" on their vendor's trade-in or buy back policies. As in, some vendors are NOT honoring their policies because diamond prices have dipped enough that they will lose money if they do.

If you go to the home page of Pricescope, you will see their pricing chart, but it won't be updated again until December - they update quarterly. I can't wait til December!

All that to say that I think you're right in that diamonds bought more recently by the vendor will be cheaper. Therefore, when they apply their usual markup, the price to us comes out cheaper relative to the diamonds that have been in their inventories longer and thus were more expensive on the front end.

We all know that the diamond market is somewhat controlled, but it DOES respond to demand. Demand has fallen off, so prices have fallen. In my thinking, what a vendor does NOT do in response to indifferent buyers is keep prices the same to "compete" with other diamonds in their inventory of similar specs. They price the new stones accordingly and hope they sell at the lower price.

I could be completely wrong and am happy to be thoroughly corrected by actual experts. I am interested in this topic as well!
 

n64bomb

Rough_Rock
Trade
Joined
Jan 8, 2015
Messages
91
There is a lot that goes into the 4 c's. There are adjustments even if the 4 c's match up between two stones.

Price Adjustment Factors For Diamonds With Identical 4Cs

1) Is there a presence of fluorescence? In general, blue fluorescence lowers the value of colorless (D-F) diamonds. In near-colorless (G-J) diamonds, medium to strong blue fluorescence can actually add a slight premium to the stones. Other colors of fluorescence like yellow or green will cause the diamond to trade at a discounted price. Likewise, if the fluorescence effect causes the diamond to take up a milky appearance, the diamond’s overall value takes a hit too.

2) What are the polish and symmetry grades? Obviously, a diamond with “excellent” ratings would cost more than a similar diamond with “very good” ratings.

3) How precise was the diamond cut? I’m not talking about the Symmetry rating found in the grading report. Instead, I’m referring to the diamond’s optical symmetry (hearts and arrows patterning) which is a level higher than the typical Symmetry grading performed by GIA/AGS--which is known as point/facet symmetry.

ideal optical symmetry vs
medium optical patterning

A hearts and arrows diamond (commonly called a superideal) requires an extreme cut precision for each individual facet and their relative alignments to each other. To achieve this, it involves higher labor costs for skilled polishers and more weight loss from the rough during manufacturing. Logically, these diamonds sell at a slightly higher premium.

4) Is the diamond eye-clean? If inclusions are visible to the naked eye, it is going to affect its marketability and ultimately, its price.

5) What is the nature of the diamond’s inclusions? Do the clouds cause haziness in the diamond? Are the feather inclusions surface reaching? Do inclusions like cavities or indented naturals pose a significant risk to durability? Are the inclusions colored or translucent? The list of examples can go on for pages but I think you get the idea…

6) Does the diamond has a culet? Even though stones with culets are a thing of the past, you may occasionally come across modern day diamonds with culets.

7) What’s the girdle thickness of the diamond? The girdle has a direct impact on a diamond’s spread and durability. If it is too thick, the weight of the stone gets trapped in the side profile and the diamond faces up smaller. If the girdle is too thin, it makes the diamond susceptible to chipping.

8. What’s the color tint/hue of the diamond? GIA will only indicate the diamond’s tint in their reports at color grades lower than K. Although the tint isn’t listed for higher colored diamonds, the stone’s value can be significantly affected. For example, in G colored diamonds, brownish and greyish hues are less desirable than yellowish tints. You can find more details about this phenomenon.

9) Are the grading reports from reliable labs like GIA/AGS or unreliable labs like EGL/IGI? Grading labs are not made equal and you shouldn’t believe anyone who tells you otherwise.

Non-Diamond Related Price Adjustment Factors

1) What are the kind of policies or warranties the jeweler offers? Do they offer buy-back or trade up policies? Do they offer free repairs, ring resizing or jewelry warranties? These value-added services cost businesses time and money and are usually factored into the markup of the goods sold.

For example, Enchanted Diamonds offers a lifetime warranty where they offer free repairs to your jewelry even in the event of incidental damage (which is unheard of in the industry). Interestingly, they also offer the most competitive prices you can find anywhere despite offering some of the best policies in the industry.

2) Where are you based at? Different countries/states will have different laws and sales taxes applicable for consumer goods. For example, prices of diamonds are generally higher in the UK than US due to VAT. When you calculate prices, make sure you factor in any duty fees and taxes that are payable.

3) What are the kind of markups the jeweler charges? Prices can vary wildly depending on where you purchase them. In general, you can expect to pay 2 times more for a similar diamond at big brand stores like Tiffany and Co. or Cartier.

For local jewelers and chain stores, I tend to see premiums ranging from 10% – 100% above Internet prices. Basically, the additional premiums you are paying for are due to additional overheads like rental, salary, inventory and marketing costs. As a guideline, if a retail store lists their diamonds at more than 10-15% of a similar stone you can find online, you know are paying an excessive premium to buy from that jeweler.
 

PintoBean

Ideal_Rock
Premium
Joined
Jul 27, 2011
Messages
6,377
My apologies - I should have articulate better. I was hoping that HCA would factor into the pricing variations, but clearly it doesn't.
 

realazy

Rough_Rock
Joined
Oct 19, 2016
Messages
30
Reply to n64bomb's post

Well these are the kind of posts that make me second guess my purchase. This basically says that diamonds are priced low for a reason and that it is a perfect free market. There are NO deals in the retail diamond market. This seems like a line that retailers want you to believe.

I tend to believe that its an inefficient market with declining demand where miners, cutters and retailers are losing control and they are forced to compete.
 

flyingpig

Ideal_Rock
Premium
Joined
Nov 7, 2015
Messages
2,171
realazy|1478034831|4092746 said:
PintoBean|1478034680|4092745 said:
Utilizing the HCA to see if either stones should be knocked out of consideration (We would throw out any stone 2 or higher in score)
https://www.jamesallen.com/loose-diamonds/round-cut/1.01-carat-f-color-vs2-clarity-excellent-cut-sku-2101658
HCA is under 2 at 1.4. so a keeper.

https://www.jamesallen.com/loose-diamonds/round-cut/1.03-carat-f-color-vs2-clarity-excellent-cut-sku-2056083
HCA 3.8 - this would be a stone I wouldn't consider.
Well that's why I bought stone 1 on a whim. It doesn't explain why stone 1 is $800 cheaper.

I'm wondering if any one has comments on how the diamond market works? or theories?
Just hoping to start a conversation on price variations. I know that variations between vendors is normal due to business costs, this is more regarding within the same vendor.
1. Most diamonds listed in JA's website are virtual inventory of multiple suppliers who offer different pricing. Some supplier may want to maximize $ profit from each stone , while others may focus more on getting inventory moving. Although you shop at JA, you are actually dealing with multiple diamond suppliers. JA is acting more like a broker. They simply apply XX% profit margin.
2. JA lists 100,000 diamonds on their website. There is no way they can look at each stone and its spec and strategically determine the price of EACH stone.
3. $800 variance (or 11%) is common. For an example at JA, 1.0c I VS2 can cost you anywhere from 5k to 5.8k.
4. Why stone 2 more expensive than stone 1? Because the supplier of stone 2 believes that he can find a buyer at that price. He probably will. It is 1.0c, it is F, it is GIA XXX, it is VS2, it looks decent in that video. Unfortunately, a person with limited knowledge in diamond will buy this.

I've also read that diamonds never have "deals" and everything is priced for a reason
I mostly agree with this statement. However, there are deals. You just have to keep searching HARD and get LUCKY.
And it appears that you have found such deal, as other members and I commented in the other thread, despite the diamond being slightly deep.
 

realazy

Rough_Rock
Joined
Oct 19, 2016
Messages
30
flyingpig|1478042305|4092793 said:
1. Most diamonds listed in JA's website are virtual inventory of multiple suppliers who offer different pricing. Some supplier may want to maximize $ profit from each stone , while others may focus more on getting inventory moving. Although you shop at JA, you are actually dealing with multiple diamond suppliers. JA is acting more like a broker.
2. JA lists 100,000 diamonds on their website. There is no way they can look at each stone and its spec and strategically determine the price of EACH stone.
3. $800 variance (or 11%) is common. For an example at JA, 1.0c I VS2 can cost you anywhere from 5k to 5.8k.
4. Why stone 2 more expensive than stone 1? Because the supplier of stone 2 believes that he can find a buyer at that price. He probably will. It is 1.0c, it is F, it is GIA XXX, it is VS2, it looks decent in that video. Unfortunately, a person with limited knowledge in diamond will buy this.

I've also read that diamonds never have "deals" and everything is priced for a reason
I mostly agree with this statement. However, there are deals. You just have to keep searching HARD and get LUCKY.
I think this explains it a bit more and supports the argument that suppliers do compete. So there can be deals within a vendor (therefore keeping after-sale services being equal). Or maybe 11% isn't a deal to some people.

I guess if it fits in with the greater price band across suppliers and vendors, then it can be regarded as regular business competition.

Has anyone else noticed the "newer" stones being cheaper phenomenon?
 

n64bomb

Rough_Rock
Trade
Joined
Jan 8, 2015
Messages
91
If you bought from a retailer without any negotiation, then you got what you paid for. There are less markups online, and it is possible to buy a stone for say 60% of the retail value jamesallen would sell it for. You would need to buy secondhand to get that type of deal, and you would need to know what you were doing and wouldn't get a stellar upgrade/return policy. Buying secondhand has its advantages/disadvantages as well. But if you buy retail, you get what you pay for. If one 1.3 carat VS2 I excellent cut is 7500$ and another 1.3 carat [email protected] I excellent cut is 9300$ from the same vendor, look for the reasons why they are different in price. There are differences, and after learning about diamonds, a lot of them manifest just by comparing the certificates for the stones.
 
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