Parcel vs Certified diamonds: View from Industry Experts

[anik7648]

All

I am going to use a 40 pointer tennis bracelet as an example to get views of those who have knowledge of parcel diamond trade. I see a big price difference between tennis bracelets made with GIA certified and uncertified diamonds and typical excuse is that it’s not worth the cost of certification (to begin with there is hardly any tennis bracelet with GIA certified diamonds, even if you are looking at a 10 cttw bracelet).

I was talking to a friend at one of the largest diamond manufacturers and here was his take:

No manufacturer would put GIA triple X quality diamonds in a parcel. It just doesn’t make sense. Details below:

- Wholesale Cost of G, VS2 Triple X, No fluorescence 40 pointer is roughly $xx00/ carat.
- Same color and clarity (G, VS2 40 pointer) parcel is $yy00 per carat. However parcel diamonds won’t have any cut or Fluorescence specifications.
- Price difference was roughly $500 per carat in this case.
- It costs us $100/ carat for GIA certification ($40 / diamond). So If we could spend $100 / carat more for certification and get $500 / carat more for parcel diamonds, why would ever ever sell them in parcel at a lower cost.

Any inputs on this parcel vs certified diamonds for tennis bracelet would be welcome.

 

[denverappraiser]

I agree with much but not all of that.

1) GIA grading on .40's costs a minimum of $59 at GIA, plus shipping, handling, and insurance in each direction. Figure that's closer to $100/stone, plus whatever the handling fee the vendor wants for putting up with the process. That's a significant fraction of the budget. www.gia.edu

2) MOST dealers are lying about grades. VS tennis bracelets are full of SI and even I goods. G-H routinely includes I and even J or K colors. It's not an evil plot, it's just human nature. When two people come in and ask me if a stone is VS2 or SI1, all I need to know is which one is the seller and I can tell you who called it VS. For example, I just did an appraisal on an eternity band with 16 stones sold as VS1-2. Most were I-1 with a few SI2's thrown in. This is surprisingly typical. At least they were natural. Comparing lab graded stones to dealer claims made about a tennis bracelet is almost certainly not comparing apples to oranges. VS1/F/xxx/0.40 does not cost the same as SI1/H/ggg/0.39. Most of it isn't the lab fees but most people can't tell the difference after it's mounted.

3) Tennis bracelets never have xxx diamonds in them. That's because those sell better individually. G-G-G is hard to sell individually and spending money on a GIA inspection that says that just makes it worse.

 

[anik7648]

I agree with much but not all of that.

1) GIA grading on .40's costs a minimum of $59 at GIA, plus shipping, handling, and insurance in each direction. Figure that's closer to $100/stone, plus whatever the handling fee the vendor wants for putting up with the process. That's a significant fraction of the budget. www.gia.edu

2) MOST dealers are lying about grades. VS tennis bracelets are full of SI and even I goods. G-H routinely includes I and even J or K colors. It's not an evil plot, it's just human nature. When two people come in and ask me if a stone is VS2 or SI1, all I need to know is which one is the seller and I can tell you who called it VS. For example, I just did an appraisal on an eternity band with 16 stones sold as VS1-2. Most were I-1 with a few SI2's thrown in. This is surprisingly typical. At least they were natural. Comparing lab graded stones to dealer claims made about a tennis bracelet is almost certainly not comparing apples to oranges. VS1/F/xxx/0.40 does not cost the same as SI1/H/ggg/0.39. Most of it isn't the lab fees but most people can't tell the difference after it's mounted.

3) Tennis bracelets never have xxx diamonds in them. That's because those sell better individually. G-G-G is hard to sell individually and spending money on a GIA inspection that says that just makes it worse.

Thanks for chiming in. One thought and one question

1. Most manufacturers would get dossier report for 40 pointers, which is $41. Also when you are getting 100s of diamonds certified, you can’t take the shipping charges of an individual diamond.

2. These manufacturers operate at razor thin profit (<5%). Given the difference between parcel diamonds and certified ones are almost 40%, and 25% even after normalizing for cost of certification, I still go back to my original point that the quality of parcel diamond and certified diamond is not comparable. Even if color and clarity is.

3. Your point on quality of diamonds in a bracelet being overstated Is an interesting one and I buy that.
4. Question for you - completely understand that taste is a matter of preference but keen to get your view on what specification diamonds would you use in high quality diamond bracelet, without spending on specs that just don’t make any difference. I often use the metaphor of buying a car and say I want BMW/ Porsche quality.

 

[denverappraiser]

As you point out, this is a taste issue. My taste is irrelevant. FWIW, I wear a 0.91 K VVS1 AGSL super ideal in my wedding ring that I got from one of the PS vendors. I’m not going to name names because of my role here. Yes, I’m very much a cut snob. My wife wears a much larger H I1, AGS000 with no particular branding on hers.

If I were to buy her a tennis bracelet, which I probably should, our 10th anniversary is coming up before long, I’d probably go with super-ideal cut synthetics, I’d want a lab report on every stone, and I’d go with GCAL because I think they do the best job in lab-grown. I'd be very picky about cutting, which is difficult with Lab-Grown, by the way.

YMMV.

 

[anik7648]

As you point out, this is a taste issue. My taste is irrelevant. FWIW, I wear a 0.91 K VVS1 AGSL super ideal in my wedding ring that I got from one of the PS vendors. I’m not going to name names because of my role here. Yes, I’m very much a cut snob. My wife wears a much larger H I1, AGS000 with no particular branding on hers.

If I were to buy her a tennis bracelet, which I probably should, our 10th anniversary is coming up before long, I’d probably go with super-ideal cut synthetics, I’d want a lab report on every stone, and I’d go with GCAL because I think they do the best job in lab-grown. I'd be very picky about cutting, which is difficult with Lab-Grown, by the way.

YMMV.

Thanks for that. That is a very left field thought

As an aside, see GIA service for manufacturers in Surat. Complimentary pick up and drop off. Of course in each run they are pick up and dropping off 100s of diamonds. That brings me to the conversation I had - which is cost of certification for 0.4 carat Diamond for these manufacturers is really close to $41/ diamond.

GIA Surat Location | GIA India

www.giaindia.in