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Ever found your diamond on Blue Nile?

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DBM

Shiny_Rock
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Would love to know of anyone''s experience in being shown a diamond by a B&M or a broker (NY or elsewhere) and then finding that same diamond on Blue Nile for less than the price that was quoted to you by the B&M or broker!! Anyone have that experience?
 
Not on Blue Nile but on another diamond site I found the exact same diamond for $3500 less. The B&M wouldn''t come down on their price. I ended up going with a completely different diamond at another B&M and will not go back to that first jewelry store. They were kinda shady to begin with and it just made my decision that much easier when I found the same stone online.
 
you matched the certificate number and everything? where was this if i may ask? what city?
 
This was in Chicago. I didn''t match the certificate because I wasn''t given it by the B&M and couldn''t write the number down when I was there - I did match that it was a 1.98 G VS radiant cut with the exact same table, depth, symmetry and polish, that the B&M showed me was. What are the chances it was not the same diamond being so shy of 2.0 carats? One in a billion? I asked the jeweler to come down on price as I had seen the exact one on the website and he wouldn''t and he didn''t deny it was the same one.
 
interesting. did he say that was below his cost? Sounds a little shady as you described anyway-- i don''t know many jewelers who would mark up an additional $3500 onto what a stone would be sold for on the internet. interesting though. thx

I''m interested in finding instances where online vendors are selling on the internet for prices at or below the cost of what the B&Ms are getting it for... that i think is a seroius exploitment of the B&Ms that the top-level diamond suppliers need to answer for.. it''s playing both sides of the fence, giving the B&Ms almost a no-win situation.
 
Did this happen to you recently Daniel? Any specifics? What occured?
 
He didn''t really give me an explanation other than to say that they wouldn''t be willing to come down on the price. It was a high 14k on the internet site and the B&M place wanted low 18k. I understand they have overhead and would have been willing to pay a little more than on the internet (they do have overhead and other costs) but I thought the price difference was just way too out of line to justify it.

Jewelers on line are most likely going to have prices less than the B&M''s cause of the lower overhead. I''m not opposed to paying a little more for the B&M, afterall, I can get the prongs checked, go in for cleaning, etc. that I can''t do online.

Are you going through a similar circumstance? Would like to here your story.
 
Date: 12/10/2006 10:02:12 AM
Author:DBM
Would love to know of anyone''s experience in being shown a diamond by a B&M or a broker (NY or elsewhere) and then finding that same diamond on Blue Nile for less than the price that was quoted to you by the B&M or broker!! Anyone have that experience?

This is not too unusual. Sometimes (more than you would think) the listed stone on the internet is not available to the vendor listing it, has never been available to the vendor listing it, and never will be available to the vendor listing it. Since many vendors know that they can not get stones from certain suppliers they will sometimes engage in predatory pricing by listing those stones at their actual cost, knowing that the only thing good that can come of this is killing the sale of the competing vendors.

Unfortunately the FTC doesn''t really care that this is completely illegal and if persued could result in huge fines. The companies doing it generally don''t have the deep pockets of the pharmaceutical companies so no one with the power to do anything cares.

Some of the diamond wholesalers don''t care who lists their stones, some do and try to keep their diamonds off of the lists, but the list users don''t really care if they can get the diamond or not, they just tell you that "that stone is not ''in house'' right now, but we do have..."

There are many good and wonderful vendors on the net, and there are many who are less than honorable. Your job as clients is to do enough research to make sure that you are dealing with one of the good guys.

Wink
 
DBM, I''ve had the reverse happen to me. I went diamond shopping in NYC.

Prior to the trip, I had made a list of internet diamonds I was interested in seeing. In addition to these diamonds, I had made an appointment to see a B&M retailer, who brought in several stones for me to look at. One of the stones brought in was on my internet diamond list.

When I asked how much the price was the retailer went to his office, and upon return, gave me a price that was $200 or $300 less than the lowest internet price.

I was surprised at this because I thought a B&M would need about 20% margin, whereas an internet retailer would need less.
 
Date: 12/10/2006 6:56:16 PM
Author: Wink

Date: 12/10/2006 10:02:12 AM
Author:DBM
Would love to know of anyone''s experience in being shown a diamond by a B&M or a broker (NY or elsewhere) and then finding that same diamond on Blue Nile for less than the price that was quoted to you by the B&M or broker!! Anyone have that experience?

This is not too unusual. Sometimes (more than you would think) the listed stone on the internet is not available to the vendor listing it, has never been available to the vendor listing it, and never will be available to the vendor listing it. Since many vendors know that they can not get stones from certain suppliers they will sometimes engage in predatory pricing by listing those stones at their actual cost, knowing that the only thing good that can come of this is killing the sale of the competing vendors.

Unfortunately the FTC doesn''t really care that this is completely illegal and if persued could result in huge fines. The companies doing it generally don''t have the deep pockets of the pharmaceutical companies so no one with the power to do anything cares.

Some of the diamond wholesalers don''t care who lists their stones, some do and try to keep their diamonds off of the lists, but the list users don''t really care if they can get the diamond or not, they just tell you that ''that stone is not ''in house'' right now, but we do have...''

There are many good and wonderful vendors on the net, and there are many who are less than honorable. Your job as clients is to do enough research to make sure that you are dealing with one of the good guys.

Wink
I vote what wink said above... when I was purchasing my stone I found what I wanted on BN and *tried* to get someone else to source it but they could not. BN then told me that they have a contract with their suppliers to not give access or list any of their stones to anyone else. It''s possible though that a b&m could purchase the stone from BN for retail and then jack it up some more to resell to you.
 
Date: 12/10/2006 8:11:27 PM
Author: Cehrabehra

I vote what wink said above... when I was purchasing my stone I found what I wanted on BN and *tried* to get someone else to source it but they could not. BN then told me that they have a contract with their suppliers to not give access or list any of their stones to anyone else. It''s possible though that a b&m could purchase the stone from BN for retail and then jack it up some more to resell to you.
I think that''s probably true, with both BN and maybe some of JA, too. That, they have an exclusive with some distributors. Then, maybe they additionally can get others and anything, where there may be crossover with other vendors. You can see some of this on the Pricescope boards, I think.
 
well it's like this:
it doesn't really hurt me personally because my suppliers don't work with Blue Nile or others online, but in the district here I see exactly what is going on. Without going into specifics , I see two basic types of "top suppliers". One group will say give to BN or others at the same price they'd give to a Broker or B&M (maybe a little better discount but nothing huge) and that's fine. it's fair for everyone. It certainly puts a cap on a B&M to a certain degree but all in all it's fair capitalism. If the B&M has the customer first he can sell Diamond x to them, if BN has the customer first they can sell the diamond to them. Granted the B&M doesn't maybe make the profit margin of BN but hey BN deserves some leverage for their volume of sales.

BUT the 2nd group are, in my opinion, doing something really unfair. Their stones are posting on BN (i.e. after BN has already put their markup on the stone) at or around the same price they're offering to B&Ms and brokers on the street!!! Basically getting the best of both worlds, either BN will sell their stone or the B&M except that when the B&M has gotten a stone for cost of $15k (i'm just picking #s) and sold it for $17k (not a large profit margin frankly) his customer walks away feelling jipped b/c after all the same stone (or atleast a stone similar) was selling on BN for $15K. In essence it's like exploiting the B&Ms and brokers as sales outlets without allowing them the mutual benefit of building constructive development on their own end with their customer base. alot of people are getting hurt by it.

if it was me and i had more position in the issue i would tell all the B&Ms and brokers to gather together and put a ban on all the top suppliers who choose to place their diamonds with the online vendors at below fair market value prices. It's honestly not my problem but it's sad to see alot of the "old timers" have their livelihoods slowly chipping away in front of them and they're not even aware as to why...
 
Date: 12/10/2006 8:11:27 PM
Author: Cehrabehra

I vote what wink said above... when I was purchasing my stone I found what I wanted on BN and *tried* to get someone else to source it but they could not. BN then told me that they have a contract with their suppliers to not give access or list any of their stones to anyone else. It''s possible though that a b&m could purchase the stone from BN for retail and then jack it up some more to resell to you.
a savvy dealer in the district can probably get a BN stone for you but the issue will be whether he can get it at a fair cost -- depends on whether it''s supplier #1 or #2 (see above)
 
So it sounds like the evolution will play out where Suppplier #1 will only supply BN and Supplier #2 will supply everyone else. That puts Supplier #1 at the mercy of BN. If #1 eventually has no other business other than BN, then BN will be able to bully #1. Supplier #1 will eventually have their margin squeezed and find it advantageous to sell to others at a fair price.

The scenario does hurt the little guy though who can''t weather the storm.
 
Date: 12/11/2006 12:13:57 AM
Author: starryeyed
So it sounds like the evolution will play out where Suppplier #1 will only supply BN and Supplier #2 will supply everyone else. That puts Supplier #1 at the mercy of BN. If #1 eventually has no other business other than BN, then BN will be able to bully #1. Supplier #1 will eventually have their margin squeezed and find it advantageous to sell to others at a fair price.

The scenario does hurt the little guy though who can''t weather the storm.
yes, but I think you got the #s the other way around though.. 1 is 2 and 2 is 1.

the only factor you''re possibly leaving out is that all the suppliers are on there way towards a trend of gouging the prices vis-a-vis B&Ms... in that case we''ve got problems :-) besides for what Wink mentioned before
 
Yes DBM, sorry for the flip - I was up past my bedtime!

I think a B&M adds tremendous value on service - repair, mountings, appraisals, design services, etc. B&M''s can also realize a nice margin on estate pieces. A lot of shops have gone the way of just handling designer pieces, where there''s apparently not much room for price negotiation and sales need to be "authorized". A B&M can also add value on stones that need to be judged in person, like fancy shapes.

Personally I don''t mind giving up a few more dollars for the convenience of having a jeweler down the street, as long as the jeweler is honest, respectful, tells it like it is, doesn''t price-gouge, doesn''t treat me like an idiot or a pauper, and has great craftmanship on repairs/special orders. This means a lot to me. And sometimes, I''m just in the mood for a bauble and it''s nice to pick something out of the window and wear it home.
 
Personally I don''t mind giving up a few more dollars for the convenience of having a jeweler down the street, as long as the jeweler is honest, respectful, tells it like it is, doesn''t price-gouge, doesn''t treat me like an idiot or a pauper, and has great craftmanship on repairs/special orders. This means a lot to me. And sometimes, I''m just in the mood for a bauble and it''s nice to pick something out of the window and wear it home.

:-) i''m not sure a few more dollars is going to cut it to cover the jewelers overhead expenses of running a jewelry business including high cost of jewelrs block insurance. :-) but yes i know what you''re saying is definitely true as well.
 
My local guy is very upfront with me and has said his cost of doing business requires a 20% mark-up. So if an internet retailer has a 10% profit margin (I''m guessing), I''d pay 10% more to do business locally. For me, it depends what I''m buying. Small ticket stuff, it might amount to $100- $300, but that''s worth it to me if I can try it on, see it in person, etc.

But you are right - if it''s a $10-20K stone, I''d probably get it from the internet, probably not from BN though because they don''t post pictures or idealscope images, etc. There''s no way I would give BN $20K for something unseen.....
 
Date: 12/10/2006 11:59:00 PM
Author: DBM

BUT the 2nd group are, in my opinion, doing something really unfair. Their stones are posting on BN (i.e. after BN has already put their markup on the stone) at or around the same price they''re offering to B&Ms and brokers on the street!!! Basically getting the best of both worlds, either BN will sell their stone or the B&M except that when the B&M has gotten a stone for cost of $15k (i''m just picking #s) and sold it for $17k (not a large profit margin frankly) his customer walks away feelling jipped b/c after all the same stone (or atleast a stone similar) was selling on BN for $15K. In essence it''s like exploiting the B&Ms and brokers as sales outlets without allowing them the mutual benefit of building constructive development on their own end with their customer base. alot of people are getting hurt by it.
It may seem unfair, but in a free market, it goes on all the time. How do you think Wal-Mart has put so many small retailers out of business? It''s because, through their huge volume, they''re able to sell retail for less than what small stores have to pay wholesale. There''s no way to compete with that unless the small store can offer a lot of added value.

BN moves a ton of diamonds. I see nothing wrong with their getting a lower wholesale price than a small B&M.
 
For now… there are different kinds of consumers. Those who will not buy such items online and those who will. This type of thing is just the natural progression of the internet and big super corps.. Costco buys things in bulk and gets a volume discount from the suppliers and passes it on..So does Blue Nile.

There are also companies that manufacture rings that are now selling directly through the internet to the buyers. - skipping wholesalers and retailers… Consumers that are nervous about such transactions and expect service will pay a premium to B&M stores.
If your customers are already looking online and know to compare the cert#’s then they most likely are just getting their feet wet with the B&M before they make their purchase online anyhow.

This is happening in every industry..not just diamonds. Think about sites like, overstock, amazon, buy dot com and others. They all have lower overhead and sell items substantially cheaper than mom and pop stores. The only ones that can compete are the Walmarts and Targets of the world.

This is not a new issue, it is just affecting your business now as it affects others. Just remember... the little guys just need to be focused on service service service to survive.
Many I know offer FREE adjustments, cleanings, check prongs, inscriptions..Thats how value is found by the consumer....even if the initial purchase is more.. If you charged me for these small things.. I probably would just buy online because there would be no difference. I would just pay for the service later.
 
I had the same experience as Cehra - I found my stone on BN, tried to get it through Tim at GOG, but he wasn''t able to get it.
 
capt-- you''re absolutely correct but i think with the diamond district it''s a little different. The relationships formed between the big guys and the brokers go way back. It''s more a matter of "looking out for friends" and "we expected more from you". While i don''t expect a top wholesaler to not maximize his profits i think they could be a little bit more honest about it, specifically in letting the brokers and B&Ms be aware of the fact that the diamonds they are taking on consignment are actually posted on online vendors at the cost price of their consignment. I don''t think it''s just mere oversight or "too much bother" that causes these guys to leave those details out, i think it''s because they want to have their cake and eat it too and they know that few brokers and B&Ms would show a stone that is being undercut on an online website.

:-) -- it depends on who you know :-)
 
Daniel, in fairness--as you know--the big manufacturers are really caught in a vise these days, between De Beers and the other producers relentlessly raising rough prices and the retailers fighting any increase in polished cost. In what other industry do you have to pay cash for your raw materials while extending what amounts to free credit to your customers?

I doubt Fabrikant will be the last Ch. 11 filing. There are things about the diamond business that have never made sense to me, and a lot of that is due for some change. I can understand the motivation to make sure every stone has the maximum possible exposure to potential customers, especially when the clock is ticking on the loans that were taken out to cover the inventory.

What you''re seeing here is the market forcing efficiency on an inefficient industry. But, I agree the practice you''re describing should be disclosed.
 
Date: 12/11/2006 7:33:22 PM
Author: CaptAubrey
I doubt Fabrikant will be the last Ch. 11 filing.

Wha??? Fabrikant has filed Chap. 11?? Does this mean the Royal Asscher patent will be up for grabs? Upheaval in the pricing structure/availibility of them??

Hmmmmm. Interesting ....
 
Date: 12/11/2006 7:33:22 PM
Author: CaptAubrey
Daniel, in fairness--as you know--the big manufacturers are really caught in a vise these days, between De Beers and the other producers relentlessly raising rough prices and the retailers fighting any increase in polished cost. In what other industry do you have to pay cash for your raw materials while extending what amounts to free credit to your customers?

I doubt Fabrikant will be the last Ch. 11 filing. There are things about the diamond business that have never made sense to me, and a lot of that is due for some change. I can understand the motivation to make sure every stone has the maximum possible exposure to potential customers, especially when the clock is ticking on the loans that were taken out to cover the inventory.

What you''re seeing here is the market forcing efficiency on an inefficient industry. But, I agree the practice you''re describing should be disclosed.
good point.

manufacturers have to pay COD for the rough?? i was under the impression that they usually work out terms of graduated "due dates" of 30 60 90 120??? no?
 
Date: 12/12/2006 12:15:35 AM
Author: DBM
good point.

manufacturers have to pay COD for the rough?? i was under the impression that they usually work out terms of graduated ''due dates'' of 30 60 90 120??? no?
We do not only pay COD. When buying from the DTC, BHP-Billiton, Alrosa and others, you pay before the shipment is sent.

One remark though, about BN getting better pricing because of buying bigger volume. That seems normal, but in reality, BN is hardly buying anything for stock. In stead, they guarantee a certain turnover, but do not specify which stones.

As such, cutters definitely prefer to sell specific stones to a B&M.

Live long,
 
Welcome to the real world.
Its been that way in the computer industry for 6-7 years now.
There are some products like hp printers that its impossible for a small shop to sell at a profit.
The 10x quantity wholesale price direct from HP is higher than the consumer price directly from their website.
 
Date: 12/12/2006 6:39:08 AM
Author: Paul-Antwerp

..... BN is hardly buying anything for stock...
Hi Paul, small correction: currently, Blue Nile has about 2,000 diamonds (Signature collection) that belong to them and reside in their safe. Retail value: $10,020,747
 
I am very sad all the small mom and pops that WalMart has put out of business.
Good or bad, right or wrong, this will happen in every market where there is money to be made.

The overwhelming majority of buyers just want the lowest price; the seller's family tradition means nothing to them.
Whoever gives them the lowest prices will win.

It is capitalism.
You can't stop it.

(Oh, and don't shoot the messenger.
14.gif
)

That said I think there is also a small group who won't go to WalMart and will seek out the finest products.
 
It is capitalism.
You can''t stop it.

(Oh, and don''t shoot the messenger.
14.gif
)

That said I think there is also a small group who won''t go to WalMart and will seek out the finest products.
definitely true and everyone is making good points. my only insight though is that the Walmart''s undercutting is more transparent to the retailer than in what is happening here. The computer (example) retailer within a short time quickly grasps the problem at hand and will have to re-adapt himself. Granted. It''s more than capitalism. it''s evolution. BUT when a broker or a B&M takes out a stone and he has not idea that his stone IS BEING OFFERED at a discount to a end-consumer -- how can he self-correct? More often than not i thinik if a customer goes to a B&M, gets a quote, and then finds the stone online for say >$1000 cheaper, the customer won''t even let the B&M know. He simply just will leave, leaving the B&M scratching his head in confusion how could the customer turn down an X X X stone whihc was offered with a conservative markup.... there''s not the same transparency to allow for self-correction. If the suppliers were more candid to their B&M customers about where their stones are online and at what price, that would be more in line with the Walmart''s and HPs I think.

Thx Paul. interesting about the payment. I never realized that about the rough side.
 
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