Margins of yellow and pink diamonds.

[koester_2010]

Hello, recently I have read, that the margins of pink and yellow diamonds are huge, compared to other diamond colours. What is the reason for this fact ?

Thanks in advance.

 

[stone-cold11]

Pink are MUCH MUCH rarer, so a seller''s market.

 

[Garry H (Cut Nut)]

Stock turns x margin = ROI
niche products have lower stockturns

it is not rocket science

 

[honey22]

Rare = expensive

 

[Garry H (Cut Nut)]

Date: 4/20/2009 6:27:52 AM
Author: honey22
Rare = expensive

Milky solid white and nice natural black diamonds are more rare, but not in as much demand.

DiaGem will be along soon and he will say that there are 10X as many yellow diamonds now = less rare (because cape L-P stones are being cut so they look very yellow face up).
But you need a reasonable amount of rare goods to make them in demand. Strange, but true

 

[iraweissman]

Date: 4/20/2009 6:27:52 AM
Author: honey22
Rare = expensive

That''s usually true (except for the exceptions that the other gentleman pointed out) but that doesn''t explain why fancy colors have a high margin, it only explains why their price is high.

By the way, margins on fancy yellows aren''t that high. They aren''t that rare, either. In the fancy color market, they''re a bread & butter product.

Another reason for the high margins is the lack of any kind of standardized pricing structure (like Rappaport for white diamonds). Before white diamonds became commodities with certs & rap lists, margins used to be much higher for them as well.

 

[Garry H (Cut Nut)]

Date: 4/20/2009 7:32:04 AM
Author: iraweissman

Date: 4/20/2009 6:27:52 AM
Author: honey22
Rare = expensive

That''s usually true (except for the exceptions that the other gentleman pointed out) but that doesn''t explain why fancy colors have a high margin, it only explains why their price is high.

By the way, margins on fancy yellows aren''t that high. They aren''t that rare, either. In the fancy color market, they''re a bread & butter product.

Another reason for the high margins is the lack of any kind of standardized pricing structure (like Rappaport for white diamonds). Before white diamonds became commodities with certs & rap lists, margins used to be much higher for them as well.

Like colored stones - they sell for what ever they sell for.
For years color gem dealers cried that their product is more beuatiful / more rare but can not get the same prices as diamonds.
They do not understand the power of demand!
Demand makes mile deep diamond mines where 100M is deep for coloured stones

 

[diagem]

Date: 4/20/2009 7:08:17 AM
Author: Garry H (Cut Nut)

Date: 4/20/2009 6:27:52 AM
Author: honey22
Rare = expensive

Milky solid white and nice natural black diamonds are more rare, but not in as much demand.

DiaGem will be along soon and he will say that there are 10X as many yellow diamonds now = less rare (because cape L-P stones are being cut so they look very yellow face up).
But you need a reasonable amount of rare goods to make them in demand. Strange, but true

"But you need a reasonable amount of rare goods [and a lot of publicity] to make them in demand", and only then you can take advantage and mass market the ''want-a-be''s'' as rare (or Canary as some call them)....

 

[oldminer]

Nothing at all wrong with what has already been said. Another element is that colored diamonds have not been so well organized and graded as to become the semi-commodity that the near colorless diamonds have gradually become. Without commoditization, where any one (graded properly) can be substituted for any other, you don't get nearly as much tightness in seller's cost to the end-user selling price. The more common the fancy color, the more commoditzation has happened and the tighter the selling profits. ROI is and turnover are definitely true.

While some colors remain tremendously scarce, I always wonder why so many more yellow diamonds are available today than years ago. Demand surely has brought on major production and DeBeers and others have supplied the market from stockpiles and new mine source, but it is very strange how the supply has met the demand. I often wonder how many color altered, treated yellow diamonds enter the market unnoticed by the major labs. I know they check for treatments, but I'd suspect a percentage of material is currently undetectably enhanced. An area of suspicion would be naturally yellow diamonds just touched up a bit to be a little bit more yellow leaving no perceptible clue to the gem labs that anything was done...... I'm not equipped to detect this sort of work any more than any other gemologist, so we assume that major lab reports are 100% right, at least for the time being.