questions about B&M pricing and inventories vs. internet

[golconda]

Have been lurking for a while, and am in the process of looking for a diamond (both from internet vendors and local B&Ms). One of my local B&M jewelers tells me that 1) vendors will "always" prefer to sell their best diamonds to B&M jewelers over internet vendors or brokers---thus implying that listed internet goods are rejects or inferior in some sense, and/ or explaining the higher cost of the B&M diamonds. Is there any truth to this, and if so, why?
2)Also, he tells me that having several different jewelers in one geographic location look for the same type of stone with specific characteristics drives the price of that stone upwards. Is this true? Are prices to local B&M jewelers dependent upon local demand?


Because of PS and your great information, I am aware of pros and cons of buying locally vs. the internet, but the above statements were news to me.
Thanks, in advance, for your opinions.

 

[Caratz]

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On 12/1/2003 8:04:17 PM golconda wrote:

Have been lurking for a while, and am in the process of looking for a diamond (both from internet vendors and local B&Ms). One of my local B&M jewelers tells me that 1) vendors will 'always' prefer to sell their best diamonds to B&M jewelers over internet vendors or brokers---thus implying that listed internet goods are rejects or inferior in some sense, and/ or explaining the higher cost of the B&M diamonds. Is there any truth to this, and if so, why?
2)Also, he tells me that having several different jewelers in one geographic location look for the same type of stone with specific characteristics drives the price of that stone upwards. Is this true? Are prices to local B&M jewelers dependent upon local demand?


Because of PS and your great information, I am aware of pros and cons of buying locally vs. the internet, but the above statements were news to me.
Thanks, in advance, for your opinions. ----------------

Sounds a bit fishy. If I am a cutter, I want to sell my stone to whoever is willing to pay the highest price, and I could care less whether that is a B&M or an internet broker.

As a B&M, I want to buys something cheap (without paying any premium) and mark it up as much as I possibly can, right? I have little incentive to shell out more $$$ for extra super fine premium quality goods. If I pay more for better inventory, I cannot buy as much, and I cannot sell as much volume.

 

[aljdewey]

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On 12/1/2003 8:04:17 PM golconda wrote:











One of my local B&M jewelers tells me that 1) vendors will 'always' prefer to sell their best diamonds to B&M jewelers over internet vendors or brokers---thus implying that listed internet goods are rejects or inferior in some sense, and/ or explaining the higher cost of the B&M diamonds. Is there any truth to this, and if so, why?

Unequivocably, NO, there is no truth to this. Diamond suppliers will sell their stones to those who has the funds to buy them and buy a LOT of them. To my knowledge, diamond suppliers are no different than any other business.....they take care of their best customers.

As for his inference that internet goods are rejects.....try a little experiment for yourself. Go to your local stores this weekend and tell them you want an AGS 0 stone with ideal polish, symmetry and proportions. Most of them won't even have one in the building. Ask if any of them even have an H&A stone.....most won't have that either. In fact, several of them won't even have GIA stones in house!

Conversely, most of the vendors through here specialize in exceptionally cut stones, and that is the heart and soul of their business. They aren't trying to draw in Bubba down the block who doesn't know anything about diamonds and is thrilled at the idea of getting a 1 carat diamond for $1999!

2)Also, he tells me that having several different jewelers in one geographic location look for the same type of stone with specific characteristics drives the price of that stone upwards. Is this true? Are prices to local B&M jewelers dependent upon local demand?

I'm not a jeweler, so I cannot say this is wrong with 100% certainty, but it would be a first in the natural laws of supply/demand. If only one guy carries something, he can charge whatever he wants cause you can't get it anywhere else. If several carry it, then you can walk your business elsewhere if you don't like the price/terms, and that tends to foster BETTER pricing.

This jeweler is trying to protect your potential as a customer for him by causing fear and doubt around the online process. Nothing more.

A year ago, I wouldn't have DARED to purchase online......now, I'm in the midst of shopping myself and I wouldn't dare buy anyplace BUT online. I'll get a much better cut stone than I can get locally (I asked a jeweler to bring in some options....he brought in exactly ONE stone), I'll pay a great deal less (the 10 vendors I saw this weekend nearly turned GREEN when I told them what my quotes were from online vendors).

In closing, from the Wizard of Oz....."pay no attention to the man behind the curtain" at the local jeweler.

 

[mike04456]

#1 is false. You will probably have a much easier time finding a great stone online than at a B&M store, in large part because many web sites have carved out niches as vendors of ideal cut stones. Online stones are cheaper simply because the vendors tend to have much lower overheads and are often willing to accept a lower margin and make it up on volume.




As for #2--ugh! What this sounds like to me is that he's trying to scare you away from shopping around. He doesn't want you looking anywhere else, so he wants you to believe that doing so will cost you money. The truth is, this time of year there is so much business being done that one customer isn't going to make any difference in the price of anything.