Is the diamond world ready for a competitor to GIA?

[denverappraiser]

GIA is a 501(c)(3) educational institution. For those who like to delve into this sort of minutia, including where they get and how they spend their money, here's their 2017 form 990.

Gemological Institute Of America Inc - Form Form 990 for period ending Dec 2017 - Nonprofit Explorer - ProPublica

Since 2013, the IRS has released data culled from millions of nonprofit tax filings. Use this database to find organizations and see details like their executive compensation, revenue and expenses, as well as download tax filings going back as far as 2001.

projects.propublica.org

 

[sledge]

Hey @denverappraiser the IRS links I provided in post #30 has the 2017 and 2016 data. Also, when they release newer data, it will be available there as well.

Lots of VP's with nice salaries, well at least that is reported on W2's and many with $25k+ of "other compensation". Seems odd the senior VP is making $900k vs the president "only" making $650k.

 

[denverappraiser]

There are some important differences.

DeBeers says that their grading is done by machines backed by human judgment. GIA says they are graded by humans using the latest machines and tools. It’s similar but different.

GIA says their mission is consumer protection. The consumer is their client even though the trade is almost entirely who submits stones and pays the bill. There are certainly those who question their loyalty but GIA calls themselves a consumer protection entity. DeBeers’ is a service offered only to a limited selection of dealers, even though the intention is clearly to document and show consumers what they’re buying. They’re selling tools for selling diamonds.

A decade and a half ago, there was much stress devoted to cut grading and how it should be done. The major labs were struggling with making their own rules and systems. GIA took one path, AGS took another, IGI a third, and EGL a fourth, GCAL a fifth, etc.. These have all evolved a bit since then but DeBeers seems to be on another new route. They’re using GIA language (x,vg,g,f,p) but they don’t seem to be using GIA scales, standards, or methodology.

Small players have had a tough go against the GIA machine. Deep-pocketed Collectors Universe (they dominate the coin grading business along with comic books, sports memorabilia, and others) got skunked. Many call PGS better, faster, and cheaper and they don’t even have a 1% market share. Mighty Rapaport, not known for shying away from a challenge, has dipped a toe in with Raplab but mostly they’ve steered clear. Goliath is not to be underestimated. DeBeers is no small player, they’re not used to being the underdog, they have the budget, they have the skills, and they have a very long-term vision of things. I think even GIA will find them to be a force to take seriously.

 

[denverappraiser]

Hey @denverappraiser the IRS links I provided in post #30 has the 2017 and 2016 data. Also, when they release newer data, it will be available there as well.

Lots of VP's with nice salaries, well at least that is reported on W2's and many with $25k+ of "other compensation". Seems odd the senior VP is making $900k vs the president "only" making $650k.

Sorry to duplicate.

 

[AV_]

Is DeBeers GIA's competitor... If they issue reports for free for all their stones, yes.

 

[sledge]

Sorry to duplicate.

No biggie. Re-reading, I see how my prior comments might have been taken as I was "correcting" you. That certainly was not my intent or desire. Just pointing out the IRS site might have more info is all.

Anyhow, if they were taken that way, I am sorry.

 

[denverappraiser]

Is DeBeers GIA's competitor... If they issue reports for free for all their stones, yes.

Why does the price matter? No, they're not free. Neither is GIA. GIA will issue a report on any stone that someone will pay them to look at. They'll accept work from anyone. DeBeers is a bit pickier but it's the same general idea. Before long it may even expand to where they'll take work from anyone but it's currently limited to untreated natural diamonds from a carefully vetted list of clients.

 

[AV_]

Why does the price matter?

I was thinking of a quip overheard here telling that certification is priced higher than cutting for some diamonds - which reminds me that rough providers were recently interested to prop cutting [was it the same De Beers? The piece of news was mentioned around here, but I only recall the sum total of discounts] & reports were ever a sales pipeline; all in all, I see this as such a pipeline offered in the same way as another prop for cutting as a business [many deeds & much talk of this here!].

As for end buyers, OK, maybe it doesn't matter; I wonder what the GIA might turn into, if it offered services to end buyers only - the European labs with relatively more color than diamond business come to mind, if even [so much smaller]; I would be very happy if there were more demand for reports from private buyers too, as I came near to the world of pearl reports a couple of years ago.


rambling

 

[denverappraiser]

GIA, calls themselves a college. They are that, and I even went there, but 90% of their revenue is now related to operating the labs, not the students. By far the biggest source of business for them (and every other major lab) is manufacturers in India documenting new production who are wishing the use the lab reports as sales tools. Direct work for consumers is approaching trivial in their business model.

DeBeers lab is similar. They are providing documentation on new production stones to dealers who are part of their program and who are looking for sales tools. They definitely don’t plan on having a take-in program for work from the public and I don’t even think they want to work for the trade in general.