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Feedback on negotiation / True margins in the diamond industry

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cblakesj

Rough_Rock
Joined
Jun 28, 2007
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14
Hello,

My fiancee and I went to a local B&M shop on Jewellers'' Row in Philadelphia tonight and found a diamond we really liked:

EGL - Israel
2.00 carats
VS1
F
Premium Cut
Round Brilliant
Depth: 61%
Table: 60%
Crown: 13%
Pavilion: 44%
Girdle: S TK FAC
Polish: Good to Very Good
Culet: None
Fluorescence: None

We spent over an hour negotiating really hard with the sales woman and the owner of the place. Originally they said it would cost $16,000, then they said $15,500, and then they would not budge beyond $15,000. This was our third visit to this place, our second time after hours, and it seemed like they really wanted to make a deal happen. We ended up walking out because we could not get them any lower than $15,000.

What do you think of this stone and what would you consider a great price? Also, out of curiosity, what are margins in this business and what would you say a wholesaler such as the jeweller we dealt with bought this diamond at? We hear he industry is a monopoly and that there are very significant margins. We tried to use the Price Database in Pricescope to help with the negotiation but diamonds fitting the above specs came back at around $24K!!

I really appreciate any body''s and every body''s insight. Thank you!
 
You guys are doing the real field testing out there.

It would be good if you, while you''re still not committed, and in Philly, go to Dave Atlas'' office and buy for $25 - $75 an idealscope, to help you better interpret what you''re seeing.

Speaking of which...did you get to compare this one to the one you wrote about earlier today...to #3? I would be very curious.

Oddly, or maybe not so, both you and Carats are proving out what is written in the tutorial...that the myth of 60/60 for depth & table is probably still sought after by many jewelers.

By the numbers, I would have liked #3 before better, supposedly...but your eyes will ultimately have to judge.

I read the charts just like you do...and this one seems to be a good value. Also, however, the truism is that you pay for what you get, and I tend to believe it. On the good side...although EGL Israel are supposed to be the softest of the EGL certs...seems like it shouldn''t be worse than H SI 1 compared to a GIA...and many don''t get that good...although it''s possible this does help to explain the low cost.

Your final requirement is that you like it. Maybe you''ve passed this test.

Best wishes in this endeavor,
 
See if they will allow you to take it to David Atlas down the street. Put down a minimal deposit, that is refundable. My problem is the EGL Israel cert. I'd want Dave or his associates to check it out before I paid that amount. I live outside of Philly, know jeweler's row well. He's an independent appraiser, his reputation is stellar, highly regarded. You are lucky to have him at your disposal. His fee is well worth it.

Buying online is something you should look into as well. No scary negotiating, everything is upfront. I'd stay away from EGL Israel, the grading is soft. So your F may well be a G, or an H. Same goes for clarity. That's why I am urging you to take it to David Atlas before you committ.
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I agree about bringing it to Dave Atlas first before you buy to make sure you''re getting what you are paying for. EGL Israel certs scare me until they are confirmed by an independent appraiser.
 
Kaleigh & Neatfreak,

I do think it makes sense to re-state what the concerns are about EGL- Israel, if they are to be understood.

You know...when they say...buy the diamond, not the paper...this is related to what they mean.

What''s wrong with a 2 carat H SI 1 for $15 K. With respect to color & clarity...not too much.

Is cblaksj looking for F VS1, or a diamond they like. Some of both? If mostly the latter...lets find a different problem.
 
Date: 7/6/2007 11:53:23 PM
Author: Regular Guy
Kaleigh & Neatfreak,

I do think it makes sense to re-state what the concerns are about EGL- Israel, if they are to be understood.

You know...when they say...buy the diamond, not the paper...this is related to what they mean.

What's wrong with a 2 carat H SI 1 for $15 K. With respect to color & clarity...not too much.

Is cblaksj looking for F VS1, or a diamond they like. Some of both? If mostly the latter...lets find a different problem.
Click to expand...
Good point, and I respect your point of view. I still stand by the advice I gave. It's not earth shattering. I also am a big fan of buying the stone, not the paper. But within reason. If David is down the street, why not check it out. Seems reasonable to me.
2.gif
 
Thanks Lisa, nice to hear your support. You know, you''ve almost 3 years, and I''ve hit that a few minutes ago on this board. I''m waiting to turn into a pumpkin.

My only thought is to give both someone like Dave and cblaksj some kind of question to work with.

For example, this EGL is good or bad...but with respect to what. And why.

For example, for the same money, he could get a nice, but significantly smaller ACA...like this one. Or...a bit bigger option...still giving AGS0 light performance ratings, from JA...like this one...but probably still smaller than the EGL in hand.

Then, there''s the question of the experienced advantages of the local jeweler. Do these outweigh any perceived advantages from either of these...or...are there no substantive advantages from either.

I guess I''m really just trying to put forward questions I''d encourage cblaksj to ask...since these comparable options are simultaneously available...

Cheers,
 
Date: 7/6/2007 9:44:00 PM


We tried to use the Price Database in Pricescope to help with the negotiation but diamonds fitting the above specs came back at around $24K!!


I really appreciate any body's and every body's insight. Thank you!

Click to expand...



I thinks this is why everyone is so gungho on nailing the EGl Israel rating.

The problem here is that it sounds like 15k is really over the amount she desires to spend and is hunting for a somewhat better deal--maybe getting around 14.5? But was unaware of what prices to expect. Then on seeing this F VS1 it looks like it is a deal worth raising one's budget slightly for.


So it seems to me she is considering raising her budget slightly for a diamond that might be worth more, might be a decent deal or might be a terrible deal. Doesn't sound like a good reason to tax one's budget to me.

Also, note that she must not have been swept off her feet by the diamonds beauty, or she probably would have been more reluctant to walk out when they didn't go any lower than 1500. Also, notice that she didn't stress how she actually felt about its looks and performance, but said they liked it and went immediately into cert information. In fact, it sounds like the only reason she is considering coming back for it is, in fact, because of the excellent value based on the paper cert. Which...as has been stressed...

Also, sorry about the bold..I am not sure why it is bold, and I was typing this one prior to your previous post Regular Fella
 
Date: 7/7/2007 12:11:57 AM
Author: Regular Guy
Thanks Lisa, nice to hear your support. You know, you''ve almost 3 years, and I''ve hit that a few minutes ago on this board. I''m waiting to turn into a pumpkin.
Click to expand...


CONGRATULATIONS. WOOT. (i just made over 1 month myself. woot for me too
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)
 
Small thread jack for Regular Guy. Check out the thread in hangout. Time to celebrate, woohoo.
36.gif
 
Date: 7/6/2007 11:10:02 PM
Author: Kaleigh
See if they will allow you to take it to David Atlas down the street. Put down a minimal deposit, that is refundable. My problem is the EGL Israel cert. I''d want Dave or his associates to check it out before I paid that amount. I live outside of Philly, know jeweler''s row well. He''s an independent appraiser, his reputation is stellar, highly regarded. You are lucky to have him at your disposal. His fee is well worth it.

Buying online is something you should look into as well. No scary negotiating, everything is upfront. I''d stay away from EGL Israel, the grading is soft. So your F may well be a G, or an H. Same goes for clarity. That''s why I am urging you to take it to David Atlas before you committ.
2.gif
Click to expand...
Hi Kaleigh:) Are there any other jewelers on the row that you know of that you had a good experience with and recommend?
 
Date: 7/7/2007 12:18:27 AM
Author: WorkingHardforSmallRewards

Date: 7/6/2007 9:44:00 PM


We tried to use the Price Database in Pricescope to help with the negotiation but diamonds fitting the above specs came back at around $24K!!


I really appreciate any body''s and every body''s insight. Thank you!

Click to expand...



I thinks this is why everyone is so gungho on nailing the EGl Israel rating.

The problem here is that it sounds like 15k is really over the amount she desires to spend and is hunting for a somewhat better deal--maybe getting around 14.5? But was unaware of what prices to expect. Then on seeing this F VS1 it looks like it is a deal worth raising one''s budget slightly for.


So it seems to me she is considering raising her budget slightly for a diamond that might be worth more, might be a decent deal or might be a terrible deal. Doesn''t sound like a good reason to tax one''s budget to me.

Also, note that she must not have been swept off her feet by the diamonds beauty, or she probably would have been more reluctant to walk out when they didn''t go any lower than 1500. Also, notice that she didn''t stress how she actually felt about its looks and performance, but said they liked it and went immediately into cert information. In fact, it sounds like the only reason she is considering coming back for it is, in fact, because of the excellent value based on the paper cert. Which...as has been stressed...

Also, sorry about the bold..I am not sure why it is bold, and I was typing this one prior to your previous post Regular Fella
Click to expand...

Its not really an issue of "being swept off my feet by the diamonds beauty". I was...but then again, i don''t have enough confidence in my ability to look at a diamond and tell if it is a quality diamond worth the price. We didn''t reall mention how we felt about the looks and performance because there was nothing really outstanding either way - it looked beautiful just like all the others he showed us (very sparkly)...I just wanted to make sure he was selling this to us at the right price and that i was paying an appropriate amount.
 
Date: 7/6/2007 11:10:02 PM
Author: Kaleigh
See if they will allow you to take it to David Atlas down the street. Put down a minimal deposit, that is refundable. My problem is the EGL Israel cert. I''d want Dave or his associates to check it out before I paid that amount. I live outside of Philly, know jeweler''s row well. He''s an independent appraiser, his reputation is stellar, highly regarded. You are lucky to have him at your disposal. His fee is well worth it.

Buying online is something you should look into as well. No scary negotiating, everything is upfront. I''d stay away from EGL Israel, the grading is soft. So your F may well be a G, or an H. Same goes for clarity. That''s why I am urging you to take it to David Atlas before you committ.
2.gif
Click to expand...
Good advise, no vendor is going to sell you a diamond at 10k under market, therefore its not a gia/ags F/VS1 before you can start to set a value(fair price) you have too find out what it actually is.
 
The problem with EGL-Israel is one of consistency. When you search the database here for similar stones, you are looking up stones that are reported to be VS1/F/2.00/Round to compare prices. In theory you could simply discount EGLI paper for their scale and, for example, call their idea of VS1 to be comparable to a GIA-VS2. Unfortunately, this doesn’t work. It might be GIA SI1 and it might be GIA VS1. Far more extreme, it might be similar to other EGLI-VS1’s or it might be more like EGLI-VS2’s. A quick search in the database for H/SI1 to F/VS1 2 caraters produces thousands of stones that range in price by more than a factor of 3.

The solution is to use a more sensible benchmark. It’s like measuring with a rubber yardstick. For most of the world, that benchmark is GIA. It’s still a difficult issue, it’s still good to use an independent grader who is working for you instead of the seller and it’s still prudent to demand lab paperwork but you simply do not know with any reliability the very information you are using to base a $15k decision.

My advice is to simply not consider an EGLI graded stone in this category unless you yourself are an expert and are considering the possibility of buying the stone, sending it to a more reputable lab to improve it’s saleability. You can bet that others have already considered this very issue and opted against it. Ask yourself why.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
Hi, Denver,

Mind coming back, and just saying that again?

I have sympathy for your conclusions...but difficulty for your process getting there.

Variability?

A simple example...I''m on the Price is Right, and am bidding for money.

I have $10, and know I will get anywhere from $9.50 to $30. Would I under no circumstances go for this? And attribute this to variability?

Take the application of your example. Use this board, and maintain a search for only GIA. Looking only at stones that are exactly:

2 carats, H and SI 1...you still witness (?) the wide variability of a range from $13,748 - $31,047. We have $15,000 at risk, and a claim for F VS1. No one that I''m aware of is representing a concern for EGL ranging 3 grades off...but maybe the thought is there, and the words are just not being said...? And...this...in an internet environment, where money spent is thought to be at some measure of discount to what one would expect to have to pay at a B&M store, where other services might be expected to be provided over the course (maintenance, etc.).

If variability is your problem...why is this such a problem.

Maybe there''s something else?
 
I have seen many EGLI stones that seem to be off by 2 grades or even more from what I would expect to be reported by GIA describing either clarity, color or both and most miss by at least one grade. I don’t recall ever seeing this margin of error go to the benefit of the consumer.

I’ll stick with your Price is Right example. You are asked to bid on a blue car. 14 inch tires with good tread, made in Japan within 2 years of 2005. How do you decide on an appropriate price? Should you bid $5000, $10000 or $500? It might be a brand new Lexus worth $40,000 or it might be on a clunker it’s way to the crusher. It all depends on data that isn’t available. Add to this a report from an unknown source that it runs pretty well. Did that help? It still might be a steal and it we don’t really have very good evidence that it actually runs, much less any information about what constitutes running ‘pretty well’. The obvious next step is to assess the reliability of the author of the report and to determine what scale they are using. If the report came from the manufacturer, this may be helpful indeed and it may actually contain some other useful information like the mileage and the actual year and model as well as a description of what tests it passed but it may simply be a piece of falderal provided to help the seller move it with little or no basis in reality. Would it help to see a copy of the Kelly Blue Book saying that a 2005 Honda Acura in good condition with 30,000 miles would bring $xxx? If we had determined that this was a reasonable description it might be helpful but without that, it’s of no benefit whatever.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

ps. I''m writing from shore of Loch Ness Scotland. What an incredibly beautiful place.
 
No one's making accusations about a stone seen 4th hand, obviously, but...

Is it a coincidence this thread is two threads away?

(Edited to add...) thanks for taking the time to write from away (I thought maybe some folks were in holiday). Watch out for those famous monsters.
 
One thing to keep in mind about this stone is that it''s not well cut. How well cut a stone is best determines it''s sparkle. Others here have already mentioned the softness of EGL, so this stone could very well be a G/H or VS2/SI1 and this is partially the reason EGL stones are often cheaper.
 
EGL-Israel paper is worthless, in my opinion.

EGL-USA is fine, EGL-Europe is okay.

EGL-Israel is good fuel for trying to light a fire.
 
I wonder how cblakesj is doing, and if they''re heeding any of these warnings. I''m kinda betting that if they''re still shopping stores carrying EGL goods...that the stores might indeed carry an array of EGLs...and not just EGL Israel...but also they at least could get in those from USA. But I don''t know. Other posts here show ways to identify by way of cert number which EGL it comes from. As I read it, even still, GIA & AGS remain safer still. The discount for EGL goods will be the draw, I suppose.
 
After our last discussion I believe they should make the 15000 purchase:P
 
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