Rap Sheet Positive Price Adjustments

[Duffy]

Hi,

I have been using PS over the last few months to do a lot of research. It has been a big help. I have spoken to a wholesaler friend of my family, and he has showed me the Rap sheets, so I can try and understand pricing. He mostly deals in fancy stones, and I am more interested in round, so he doesn't necessarily understand the round market as well.

I understand that the Rap Sheets are more of a guide than anything else (and retailers charge a markup), and every indication is that most stones trade at a discount from their Rap prices. But, I wanted to know more about stones that trade above, and how much premium is charged.

For instance, it says on Rap Sheets that 2.50+ may trade at a 5-10%. Is that generally the case? Is a 2.5 at 5%, and a 2.75 at 10%?

There are pretty extreme price jumps as you jump color/clarity/size grades. This would provide incentive to try and find borderline graded stones so that you save the premium. But, it is pretty hard to really judge if the higher side is offered at a 30% discount, and the lower side is at a 10% premium. I would assume the cutter, who knows it is borderline, would try and price with some premium under the next grade.

So, my basic question is: What kind of percentage premium would be added on to the lower end that looks really close to the higher end of a grade?

My basic theoretical assumption would be GIA XXX or AGS 000, under 2.0 HCA, no flourescence, or any other item that would be a natural discount.

Carat: Let's use the 2.00-2.99 scale, so what premium is on an "almost" 3.00 carat diamond.
Color: Staying away from extreme ends, what is the premium on an I that could be H, or an H that could be G, or a G that could be F.
Clarity: Staying away from extreme ends, what would be the premium on an eye clean SI1 that could be VS2, or a VS2 that could be VS1, or a VS1 that could be VVS2.
Cut: Going from a within XXX range to ACA or Hearts and Arrows Signature, or some other "perfect cut".

Thanks for any insight you can provide.

 

[kenny]

Why are you doing this?
Are you planning on buying a diamond?

Please don't buy from your so called wholesaler friend.
Don't walk, run away from him.
In the last 10 years I've read a zillion horror stories of customers who got super ripped off buying from family and friends.
Calling himself a wholesaler, but selling to you is a huge red flag you are dealing with an unethical liar.
Real wholesalers only sell to retail businesses.

Buy from a reputable PS vendor like goodoldgold, whiteflash or jamesallen.
Only consider GIA or AGS-graded diamonds because other labs lie about grades so their diamonds seem cheaper.

Cut is the most important C to light performance but it is the least understood.
Everyone understands carat weight, but few understand the importance of good cut.
Cutting for good light performance grinds away more precious weight.
That is why most diamonds are cut for maximum weight, not the best light performance.

Finding a well-cut round is easier than any other shape.
2 steps:
1. Plug 4 numbers from the grading report into the HCA. Reject those scoring over 2. https://www.pricescope.com/tools/hca
2. On rounds scoring under 2.0 get an Idealscope pic. https://www.pricescope.com/tools/ideal-scope
Compare it to this chart.



This process guarantees a well cut round but it may overlook a few good rounds that experts with years of experience would accept.
But you and I are not experts with years of experience.

Good luck.

 

[Duffy]

Yes, I do plan on buying.

I understand all that stuff, and the family friend is not really relevant to this discussion. It was more background.

I am using the Rap sheets as a basic guide to pricing. I have come to understand that all diamonds are unique, and there is just so much you can tell from a piece of paper. I would expect size premiums to be pretty clear cut, but clarity and color often have "shades" to them, especially in clarity as you go down the scale. Even GIA and AGS reports have a degree of opinion in them on borderline gradings, so, I wanted to know what kind of premiums are charged for stones that "shoulda or coulda" been a higher grade.

 

[denverappraiser]

Rap is a terrible baseline for this purpose.

You will do MUCH better comparing prices using real comps of real diamonds that are actually for sale. This is especially easy with rounds because there are so many available. There’s a database attached to this site with tens of thousands of stones that you can use for this purpose. Even if you have no intention of buying from these people it’s a wonderful way of setting the benchmark you’re looking for. There are some pitfalls with this as well that are mostly wrapped up in the cutting issues that Kenny’s talking about but Rap doesn’t even give a token nod to the issues. It's good that you fully understand them. Rather few people do (including most diamond 'wholesalers')

 

[Duffy]

I may exaggerate about fully understand, since I doubt 2 months of research can be considered "fully". But enough to be dangerous.

The way I understand the databases to work is that most of those companies get feeds from rap.net, and then add a standard markup. Since every diamond is unique, there are multiple plusses and minuses that the cutter (or whover puts on rap.net) has already taken into account when posting it on rap.net. I just want to understand how much the initial markup is for higher sizes, and borderline grades. I was hoping that would be something an experienced appraiser might have a reasonable idea on as a general guide (all other things being equal).

 

[partgypsy]

Rap is a terrible baseline for this purpose.

You will do MUCH better comparing prices using real comps of real diamonds that are actually for sale. This is especially easy with rounds because there are so many available. There’s a database attached to this site with tens of thousands of stones that you can use for this purpose. Even if you have no intention of buying from these people it’s a wonderful way of setting the benchmark you’re looking for. There are some pitfalls with this as well that are mostly wrapped up in the cutting issues that Kenny’s talking about but Rap doesn’t even give a token nod to the issues. It's good that you fully understand them. Rather few people do (including most diamond 'wholesalers')

I was just about to say this. This poster is an appraiser who does this for a living, take his word. I don't know anyone who uses the rap for deciding on what to spend on a diamond.How do you find out how much something is worth? type in the size range, shape, other specs of the kind of diamond you are looking at at the pricescope diamond finder, and see what kind of prices they are. You can even change the various criteria and see how they affect your price.

Do your own research, don't take someone's word about what something "should" be priced whether it is based on the rap or not. Sorry if I am being harsh but the only time I hear people using it is sellers referring to it in trying to justify why their price is fair or good (i.e. used as a sales device).

 

[denverappraiser]

I may exaggerate about fully understand, since I doubt 2 months of research can be considered "fully". But enough to be dangerous.

The way I understand the databases to work is that most of those companies get feeds from rap.net, and then add a standard markup. Since every diamond is unique, there are multiple plusses and minuses that the cutter (or whover puts on rap.net) has already taken into account when posting it on rap.net. I just want to understand how much the initial markup is for higher sizes, and borderline grades. I was hoping that would be something an experienced appraiser might have a reasonable idea on as a general guide (all other things being equal).

In some sense that’s correct but, as they say, the Devil is in the details. For starters you’re confusing 2 different services that Rapaport Group offers. The Rapaport Diamond Report is a magazine that they put out that contains a pricing grid for diamonds. This is what people normally mean by the Rap Sheet. Rapnet is an advertising platform where dealers post diamonds for sale and other dealers buy them … or not. It’s really quite similar to the database here where the same thing happens. Dealers can list whatever they want, they can charge whatever they want, and they can justify their prices however they want. Buyers can in turn, buy them or pass as THEY want. They have several competitors at this by the way. There is no baseline of ‘wholesale’ from which some markup is applied the way it works with most other manufactured products. The same applies on the other side of the deal when they bought it. They pay whatever they must and they charge whatever they can. Markups can be as low as a few percent or as high as 40%. Each item is priced individually and they don’t say what they paid (or they lie). This is not evil. It’s none of your business what they paid and it is simply NOT evidence of a bargain if they are working on a thin margin even if you could somehow figure it out.

 

[denverappraiser]

Items are traditionally sold on a per carat basis. In general, bigger better stones cost more PER CARAT than smaller or lesser ones. Here are a few of the variables you're looking for.

Weight. In general, bigger stones cost more per carat than otherwise similar smaller stones and there are some specific steps that are critical. The biggies are at 1.00, 2.00 and similar key points.
Clarity. Every grade up or down has an affect. Steps are not equal and the biggest are over the IF/VVS1 and SI2/I1 boundaries.
Color. Same as clarity. Again, they are not all the same. The biggest changes are around the D-E-F and H-I J ranges.
Cutting: Same as above. Every step has a change.
‘Minor’ attributes like symmetry, polish and fluorescence.
Lab.
Special features like hearts and arrows or proprietary cuts.
Branding
Financing, return policies and similar non-gemological properties.
Marketplace. Fancy jewelry stores tend to charge more than discount websites working out of PO boxes
Lies. Liars can quote lower prices and/or higher grades than legitimate dealers.

 

[arkieb1]

I think you would be better just looking at the popular vendors here and finding something. RapNet might seem like a great deal but you have to really understand diamonds and know what you are doing. I have access to RapNet btw you can run a specific search punching in the details of exactly what you are looking for but you can still pick a bad stone (with perfect specs) due to things like the body colour of the diamond, graining and various other things. Diamond brokers in India and other places are not going to care or handpick something for you. They don't always give an honest description either and if you are not buying a large parcel of diamond it could end up more costly if you get something that is horrid that you can't return.

Places like Good Old Gold Charge a premium sure, but they have their OWN cutters whom are some of the best out there and they generally steer customers away from any of the pitfalls you will encounter. How do you put a price on that?

 

[kenny]

Again why are you doing this?
Any knowledge gained does not help you.

Just pick a well-cut diamond from a good PS vendor.
You can't do better.

 

[Duffy]

Most of the virtual inventories of vendors are populated by rap.net or polygon or some other marketplace. I understand that retailers have their own proprietary cutters and preferred vendors, and that I will never know (nor care) what they buy stones for. That's really not the point of my questions (which no one has really answered). I was looking to get my questions answered, but I guess I need to further explain my "plan".

What I have seen of rap.net is that they generally list diamonds at a price, often expressed as a % over or under the rap sheet. This price is set by the owners of the diamond. Retailers get this feed of the marketplace, add in their markup, and then list it on their site. Given their quantity of diamonds, I'd guess it is a pretty standard markup. A search engine like pricescope will pull up these retail prices. I can easily access this search engine, and can do all of my searching on it and get all of my retail baselines and such as others have suggested.

My wholesaler is in NYC, and if I find a diamond I like, I can find out if it is local (many are), and he can look at it, provide a more trusted opinion and negotiate directly with cutter for me if we like the stone. As I understand, some stones have wiggle room. At worst, I would be able to get the diamond at the stated retail price. I can always have it shipped and use the return policy of the vendor.

What I am trying to understand is basic principles on how the cutters set their price on rap.net. I understand that a lot of intangibles go into it, including their own overhead and how much the rough stone was and their general mood. But, the general rule is that all cutters cut stones to maximize the finished selling price. A 3.01 stone is worth more than a 2.90, but maybe there is an inclusion that can be shaved to go from a SI2 to a VVS2, and its worth it to take off that extra bit.

I haven't decided exactly what I want, as I am not ready to buy quite yet. Need to have some discussions with the lady. But, I see a better value with a 1.90 vs a 2.00, or a 2.90 vs 3.00. Of course, these are rarer stones because cutters usually maximize carat first due to the massive leap in prices, which the Rap Sheet is great at giving a general idea. However, where a 3.00 sells for a discount per carat, the 2.90 sells for a premium. As for clarity, I know I want eye clean, but I would rather pay for a good SI1 that looks like a VS2. But a good SI1 will probably have a premium over a bad one.

The borderline is the best value for the dollar, because the premium on the lower quality (all things being equal) should never be equal to the discount on the higher value, since there is still value in the grading report "label".

Yes, I understand that every characteristic is taken into account in a price, and price jumps at the far ends of the spectrum for each C are larger than the middle. But my question is trying to understand the borderline of the middle of the road C's. I am just looking for general rules for each one, viewed in a vacuum. The Rap Sheet says that the higher end sizes in a range trade for 5-10% premiums. I was trying to narrow it down for carat (what should have 5% and what should be 10%), as well as clarity and color (and cut to a much lesser extent).

In the end, this helps me understand if I got a good deal, because as many people said, people can charge whatever they want for a stone.

 

[JulieN]

It is very difficult to find an ideal cut 1.9, and practically impossible to find an ideal cut 2.9. The only place you will find an ideal cut 1.9 are vendors who specialize in H&A type stones, where they know the markup they get from the H&A will replace the markup they are missing by cutting below 2.0

Set your budget. Rank your 4 C priorities. Optimize accordingly.

 

[arkieb1]

Most of the virtual inventories of vendors are populated by rap.net or polygon or some other marketplace. I understand that retailers have their own proprietary cutters and preferred vendors, and that I will never know (nor care) what they buy stones for. That's really not the point of my questions (which no one has really answered). I was looking to get my questions answered, but I guess I need to further explain my "plan".

What I have seen of rap.net is that they generally list diamonds at a price, often expressed as a % over or under the rap sheet. This price is set by the owners of the diamond. Retailers get this feed of the marketplace, add in their markup, and then list it on their site. Given their quantity of diamonds, I'd guess it is a pretty standard markup. A search engine like pricescope will pull up these retail prices. I can easily access this search engine, and can do all of my searching on it and get all of my retail baselines and such as others have suggested.

My wholesaler is in NYC, and if I find a diamond I like, I can find out if it is local (many are), and he can look at it, provide a more trusted opinion and negotiate directly with cutter for me if we like the stone. As I understand, some stones have wiggle room. At worst, I would be able to get the diamond at the stated retail price. I can always have it shipped and use the return policy of the vendor.

What I am trying to understand is basic principles on how the cutters set their price on rap.net. I understand that a lot of intangibles go into it, including their own overhead and how much the rough stone was and their general mood. But, the general rule is that all cutters cut stones to maximize the finished selling price. A 3.01 stone is worth more than a 2.90, but maybe there is an inclusion that can be shaved to go from a SI2 to a VVS2, and its worth it to take off that extra bit.

I haven't decided exactly what I want, as I am not ready to buy quite yet. Need to have some discussions with the lady. But, I see a better value with a 1.90 vs a 2.00, or a 2.90 vs 3.00. Of course, these are rarer stones because cutters usually maximize carat first due to the massive leap in prices, which the Rap Sheet is great at giving a general idea. However, where a 3.00 sells for a discount per carat, the 2.90 sells for a premium. As for clarity, I know I want eye clean, but I would rather pay for a good SI1 that looks like a VS2. But a good SI1 will probably have a premium over a bad one.

The borderline is the best value for the dollar, because the premium on the lower quality (all things being equal) should never be equal to the discount on the higher value, since there is still value in the grading report "label".

Yes, I understand that every characteristic is taken into account in a price, and price jumps at the far ends of the spectrum for each C are larger than the middle. But my question is trying to understand the borderline of the middle of the road C's. I am just looking for general rules for each one, viewed in a vacuum. The Rap Sheet says that the higher end sizes in a range trade for 5-10% premiums. I was trying to narrow it down for carat (what should have 5% and what should be 10%), as well as clarity and color (and cut to a much lesser extent).

In the end, this helps me understand if I got a good deal, because as many people said, people can charge whatever they want for a stone.

I hope that your stone hunt doesn't turn into disaster for you and that your friend guides you. You are already telling me in the comments above that you have NO idea what you are doing because vendors that have diamonds in "your local area" like New York for example are generally NOT cutters, they are simply diamond brokers, diamond can and do change hands a number of times before they end up for sale on RapNet....

Most of the people selling stones on RapNet are brokers not cutters. These generally do not come from the mines themselves and they are not necessarily the people who do the cutting either.... What you are seeking has NO single or simple answer. The RapNet market value is set by a complex range of factors, the price of rough, the cost of cutting, how well diamonds in specific sizes are selling at the time, these prices fluctuate believe it or not, just like Gold, Oil and other commodities.... AND over different time periods different size stones can and also do fluctuate in percentage prices per carat weight. For example this time last year (and this is just a hypothetical example) 1.50 carat stone could have been commanding a larger % per carat but then by the middle of this year this could have gone down and suddenly 2.00 carat stones could be commanding a larger % per carat weight. Generally larger stones do cost more % wise but it does go up and down depending upon what is being sold at the time and a range of factors....

And as to each vendor's inventory trying to understand how they set each price for each stone is complex as well, you can't just look at things like colour, clarity and size. Like I said before things like graining, florescence, body hue, cut, and a heap of other things all can make one stone less desirable than another, you can have a perfectly cut H & A stone that is milky for example that will be worth less than a stone that isn't. Generally and I say generally the nicest stones a vendor has are the most expensive ones the slumpy ones and the ones generally that aren't selling are cheaper.... I don't think it's a black & white as you seem to think...

I actually don't get at all what you are trying to achieve, the best value diamond per weight at any given time seems like a pretty stupid way to buy a diamond. If you are purchasing from a diamond broker or wholesaler then you should already be getting a better price, unless of course you choose an undesirable stone..... A more sensible way regardless of how and where you purchase a stone is know your budget and by the best cut, size, colour and clarity stone you can afford.

 

[SB621]

Basically there are no basic principles with what you are trying to find out. My favorite saying lately on PS is why try to fit a square peg in a round hole. Prices and %'s as AK explained so well are constantly in flux. I highly doubt you will find the magic number you are looking for and will probably waste a lot of time trying to figure that out. I think DA gave you great advise though if you wish to go down this road. Find something online that you do like within your budget the compare to your rapt sheets.

And may I just say lots of ppl come on PS saying they know a wholesaler, friends with a wholesaler, family member who is a wholesaler. None of them ever get a deal and if it did work out that way we would hear about it more often.

 

[arkieb1]

Basically there are no basic principles with what you are trying to find out. My favorite saying lately on PS is why try to fit a square peg in a round hole. Prices and %'s as AK explained so well are constantly in flux. I highly doubt you will find the magic number you are looking for and will probably waste a lot of time trying to figure that out. I think DA gave you great advise though if you wish to go down this road. Find something online that you do like within your budget the compare to your rapt sheets.

And may I just say lots of ppl come on PS saying they know a wholesaler, friends with a wholesaler, family member who is a wholesaler. None of them ever get a deal and if it did work out that way we would hear about it more often.

Yes I totally agree with SB on this one. Family members that can get deals frequently turn out not to be so.... and a lot of diamond brokers are sharks if you have no clue what you are doing. I don't think there is a magic number or a simple answer.

 

[Karl_K]

Again why are you doing this?
Any knowledge gained does not help you.

Just pick a well-cut diamond from a good PS vendor.
You can't do better.

Kenny my friend,
Wow man your 2 posts in this thread just rub me the wrong way.
Yes a consumer trying to get a stones price based on rap sheet prices is a very bad idea and is often used in a less than honest manner. Yes buying from family friends or even family often ends in disaster.
However:
Telling someone not to learn about it and saying just use a PS vendor and learn little is just wrong.
This site is about consumer education and someone asking about how pricing works is a valid question that has been asked many times and will continue to be asked.

Almost 10 years ago when I started out on this site I asked the question and kept asking the question because the answer was a mixed up mess and I thought people were not letting me in on the secret. Well now from the inside I can tell you there is no secret and it is really a mixed up mess. :}

 

[hippi_pixi]

OP you are asking us to tell you something that only decades of study and working in the business can tell you. even if you find someone that has gained all that knowledge they will not have the time or energy to impart it all to you!

Unless you want to be the worlds foremost leader in diamond pricing what is the point? It's not going to achieve what you want which i am assuming is the biggest bang for your buck in your future diamond perchase

At this point you should be learning what qualities are most important to you in a diamond. color clarity cut? a good start is to understand that color and clarity make a good diamond on paper but cut has the most affect on how good a diamond is in person.

Once you know what you want in a diamond you will have a narrower range of criteria and compare diamond prices against each other to get a good deal.

and anyone who says they are wholesaler but will sell to you, a consumer, is pulling a fast one on you

 

[hippi_pixi]

Well Karl has summed it up the best.

It seems like a big conspiracy that no one will share with you but its really just a big mess

 

[kenny]

Again why are you doing this?
Any knowledge gained does not help you.

Just pick a well-cut diamond from a good PS vendor.
You can't do better.

Kenny my friend,
Wow man your 2 posts in this thread just rub me the wrong way.
Yes a consumer trying to get a stones price based on rap sheet prices is a very bad idea and is often used in a less than honest manner. Yes buying from family friends or even family often ends in disaster.
However:
Telling someone not to learn about it and saying just use a PS vendor and learn little is just wrong.
This site is about consumer education and someone asking about how pricing works is a valid question that has been asked many times and will continue to be asked.

Almost 10 years ago when I started out on this site I asked the question and kept asking the question because the answer was a mixed up mess and I thought people were not letting me in on the secret. Well now from the inside I can tell you there is no secret and it is really a mixed up mess. :}

Sorry.
Yes, learning is great but how is understanding what a vendor paid going to help a customer?
Will he say, "Well I know you paid X so Y is all I'll offer."?
If the OP is in the industry that's different but I don't see a trade banner.

I'm not trying to end the conversation.
I just wonder what's the point.
Nobody has answered that yet.

If learning the intricacies of Rap can help me buy diamonds cheaper maybe I should learn too.
Someone please tell me whether this is so.
I thought learning about good cut and good vendors was more useful than Rap for a person with one post who is looking for a round.

Then again, I thought Rap was a subscription (proprietary?) tool/service for pros in the diamond industry rather than for retail consumers.

 

[thediamondshopper]

Some borderline stones are marked with a + ie. SI1+ H+ by the wholesaler, these are usually borderline stones and can command nice discounts over the next grade. Depending who you are working with you can ask them to specifically look for these stones. Personally I love stocking I+ and SI2+ from a handful of vendors I trust as they offer amazing value to my customers. Sometimes these + stones were graded harshly and the expense of sending it back for a regrade is prohibitive. If you are going to go this route find a retailer you trust as there will be considerable discretion on their part.

 

[denverappraiser]

I think I did answer your question in my last post. I gave you a specific list of things that will cause cutters to ask more or less for a specific stone. Isn’t that what you’re looking for?

What your ‘wholesaler’ is doing is called retailing. You know, look at stones that are available, apply his own expertise to help a consumer choose one that’s best for his/her situation and to arrange the logistics of the transaction. That's pretty much the definition of retail. There’s nothing wrong with retail, and I’m certainly aware that New York in particular is chock full of retailers who call themselves wholesalers for marketing reasons but it still sort of makes me uneasy. You’ve already caught him in a lie before the discussion even started. Your assumption that there’s a standard markup across all stones is another one and, if it came from your dealer, it’s lie #2.

Here's a bit of data mining:

Doing a search on Rapnet for 1.00-1.02 G SI1 round yields 3170 offers. Prices range from R-71 to R+20. That’s roughly a range of $2200-$10k … a span of more than a factor of 4.

The same search here generates 1149 offers ranging from $2600 to $9k.

An easy conclusion is that at least 2/3 of the stones on Rapnet are NOT listed here. Actually it’s a fair amount more than that because there’s quite a bit of duplication by multiple vendors and because Rap has competitors. Not all stones here came from there and not all stones there are here.

Why not?

There are two players in each wholesale transaction (And in this case we really are talking about a wholesale deal. I’m talking about the seller who is supplying the retailer and who is advertising it on rapnet). Both must agree to do business with each other. Rapnet has a lot of subscribers but not all sellers will agree to sell to all buyers. Normally they are quite picky. There’s the obvious credit related issues but there’s also a marketing topic. Not all sellers WANT their stones sold through discount outlets. The reverse is also true. Smart retailers are picky about their supplier relationships and simply paying Rap a fee and listing some stones does NOT get them onto the vendor list. Retailers can and do get burned by flakey suppliers. Lastly, smart retailers are picky about their goods. They list things that they think will do well for them at prices where they can make some money. Taking every offer you can find, applying a standard markup and offering it on your own site is, frankly, a silly way to accomplish that.

 

[WinkHPD]

Most of the virtual inventories of vendors are populated by rap.net or polygon or some other marketplace. I understand that retailers have their own proprietary cutters and preferred vendors, and that I will never know (nor care) what they buy stones for. That's really not the point of my questions (which no one has really answered). I was looking to get my questions answered, but I guess I need to further explain my "plan".

What I have seen of rap.net is that they generally list diamonds at a price, often expressed as a % over or under the rap sheet. This price is set by the owners of the diamond. Retailers get this feed of the marketplace, add in their markup, and then list it on their site. Given their quantity of diamonds, I'd guess it is a pretty standard markup. A search engine like pricescope will pull up these retail prices. I can easily access this search engine, and can do all of my searching on it and get all of my retail baselines and such as others have suggested.

My wholesaler is in NYC, and if I find a diamond I like, I can find out if it is local (many are), and he can look at it, provide a more trusted opinion and negotiate directly with cutter for me if we like the stone. As I understand, some stones have wiggle room. At worst, I would be able to get the diamond at the stated retail price. I can always have it shipped and use the return policy of the vendor.

What I am trying to understand is basic principles on how the cutters set their price on rap.net. I understand that a lot of intangibles go into it, including their own overhead and how much the rough stone was and their general mood. But, the general rule is that all cutters cut stones to maximize the finished selling price. A 3.01 stone is worth more than a 2.90, but maybe there is an inclusion that can be shaved to go from a SI2 to a VVS2, and its worth it to take off that extra bit.

I haven't decided exactly what I want, as I am not ready to buy quite yet. Need to have some discussions with the lady. But, I see a better value with a 1.90 vs a 2.00, or a 2.90 vs 3.00. Of course, these are rarer stones because cutters usually maximize carat first due to the massive leap in prices, which the Rap Sheet is great at giving a general idea. However, where a 3.00 sells for a discount per carat, the 2.90 sells for a premium. As for clarity, I know I want eye clean, but I would rather pay for a good SI1 that looks like a VS2. But a good SI1 will probably have a premium over a bad one.

The borderline is the best value for the dollar, because the premium on the lower quality (all things being equal) should never be equal to the discount on the higher value, since there is still value in the grading report "label".

Yes, I understand that every characteristic is taken into account in a price, and price jumps at the far ends of the spectrum for each C are larger than the middle. But my question is trying to understand the borderline of the middle of the road C's. I am just looking for general rules for each one, viewed in a vacuum. The Rap Sheet says that the higher end sizes in a range trade for 5-10% premiums. I was trying to narrow it down for carat (what should have 5% and what should be 10%), as well as clarity and color (and cut to a much lesser extent).

In the end, this helps me understand if I got a good deal, because as many people said, people can charge whatever they want for a stone.

Almost never, as the 2.90 will usually be the largest a given piece of rough could cut and will very rarely be well cut. If it could have been a poorly cut 3.00 it would have been, simply because it would net more money to the cutter. An ideal cut 2.90 to 2.99 will be rarer than hen's teeth and will almost always then be the result of a very expensive mistake on the part of the cutter and thus will not be offered at the bargain price you are looking for.

You appear to be asking for a Rosetta Stone for Rap, which, quite frankly, does not exist. The "Magic" number you want to understand not only varies from size to size, but quality to quality and is partially determined by such factors as market place and market demand in ways that even most professionals do not truly understand. Just about the time you begin to think you might have begun to understand a significant part of the equation, the equation completely changes based on factors you could not have anticipated.

Rap pricing before the bankers destroyed the real estate market was completely different than it is now and what it is now is going to be completely changed by how the idiots in Washington handle their current crisis de jour and what happens in a few days/weeks/months when the next crisis is due.

Rap itself is designed to obfuscate pricing not only to the public but to the jewelers who try to use it as you wish to try to use it. You have already received sterling advice from one of the great appraisal minds in the world, let alone this country. He actually understands more about this topic than nearly all of the retail jewelers in the world. In my opinion, if you want true unbiased information on stones that you are considering, you should be working with him, not someone who is ultimately trying to sell you a diamond. If that person is truly working in your best interest, he will have absolutely no problem submitting that diamond to a qualified appraiser once you think you have a winner. Then, and only then, will you have the assurance that you are wanting.

Just my opinion, of course.

Wink

 

[Karl_K]

Kenny,
You know by now that knowing rap list price is not helpful.
However asking and learning about diamond pricing should be encouraged.
The answer should not be just buy from a PS vendor.

back on topic:
Lets say a supplier who sells only to dealers has 20 diamonds.
Each is the same weight, same clarity and color and lab, ideal cuts and as alike as any 20 diamonds can be.
Yesterday the supplier sold all 20 diamonds to 20 different dealers.
They are all the same so they sold for the same price right?
Wrong there would be in all likelihood a 10%+ price difference between the least expensive and most.
Why?
One dealer was a newer dealer for the supplier who wanted a stone on 90 day memo(borrow the stone).
The one who got it cheapest orders 5000 diamonds a month and pays net30.

Even rapnet BtoB trading board listings are ask prices and selling prices will vary from the numbers listed.
Like I said above its a mess and just when you think you have it figured out it changes.

 

[WinkHPD]

Again why are you doing this?
Any knowledge gained does not help you.

Just pick a well-cut diamond from a good PS vendor.
You can't do better.

Kenny my friend,
Wow man your 2 posts in this thread just rub me the wrong way.
Yes a consumer trying to get a stones price based on rap sheet prices is a very bad idea and is often used in a less than honest manner. Yes buying from family friends or even family often ends in disaster.
However:
Telling someone not to learn about it and saying just use a PS vendor and learn little is just wrong.
This site is about consumer education and someone asking about how pricing works is a valid question that has been asked many times and will continue to be asked.

Almost 10 years ago when I started out on this site I asked the question and kept asking the question because the answer was a mixed up mess and I thought people were not letting me in on the secret. Well now from the inside I can tell you there is no secret and it is really a mixed up mess. :}

LOL! Well said my friend.

Wink

 

[bgray]

Duffy:

You have received invaluable advice from all of these replies. The fact is that for example Apple, BP and other stocks often trade for slightly different prices every minute, hour, day or month when nothing else has changed. There are TOO MANY VARIABLES in making these purchases (the buyer's agenda, the seller's agenda, the item itself, the time of day and so on). There is no real answer to your question. You want some mathematical formula or secret to buying the best stone/OR getting the best deal and that doesnt exist. You compare prices based on as many UNIFORM characteristics as you can get (ie search pricescope using the filters) then knowing the average price you search (via individual vendors) for the characteristics that are important to you all the while knowing what the price for typical comps are.......then you negotiate or not accordingly. Knowledge is power and there are NO deals in buying diamonds as a consumer. The only thing you can look for is a fair price for what YOU want. The only time you get deals is from a distressed seller--be it a stock, a diamond, a car a house or so on.

 

[Duffy]

Some borderline stones are marked with a + ie. SI1+ H+ by the wholesaler, these are usually borderline stones and can command nice discounts over the next grade. Depending who you are working with you can ask them to specifically look for these stones. Personally I love stocking I+ and SI2+ from a handful of vendors I trust as they offer amazing value to my customers. Sometimes these + stones were graded harshly and the expense of sending it back for a regrade is prohibitive. If you are going to go this route find a retailer you trust as there will be considerable discretion on their part.

This is exactly what I am talking about. These stones are offered at a discount over the next grade, or a premium on their current grade. Let's exclude the Rap sheet part of my question, and as a retailer, what premium would you expect to see (expressed as a %) from a wholesaler on a SI1+ over an SI1? 1%? 2%? 5? 10%? This is my question.

I can understand if it is not standard, so let's just stick with your opinion.

 

[Duffy]

I think I did answer your question in my last post. I gave you a specific list of things that will cause cutters to ask more or less for a specific stone. Isn’t that what you’re looking for?

What your ‘wholesaler’ is doing is called retailing. You know, look at stones that are available, apply his own expertise to help a consumer choose one that’s best for his/her situation and to arrange the logistics of the transaction. That's pretty much the definition of retail. There’s nothing wrong with retail, and I’m certainly aware that New York in particular is chock full of retailers who call themselves wholesalers for marketing reasons but it still sort of makes me uneasy. You’ve already caught him in a lie before the discussion even started. Your assumption that there’s a standard markup across all stones is another one and, if it came from your dealer, it’s lie #2.

Here's a bit of data mining:

Doing a search on Rapnet for 1.00-1.02 G SI1 round yields 3170 offers. Prices range from R-71 to R+20. That’s roughly a range of $2200-$10k … a span of more than a factor of 4.

The same search here generates 1149 offers ranging from $2600 to $9k.

An easy conclusion is that at least 2/3 of the stones on Rapnet are NOT listed here. Actually it’s a fair amount more than that because there’s quite a bit of duplication by multiple vendors and because Rap has competitors. Not all stones here came from there and not all stones there are here.

Why not?

There are two players in each wholesale transaction (And in this case we really are talking about a wholesale deal. I’m talking about the seller who is supplying the retailer and who is advertising it on rapnet). Both must agree to do business with each other. Rapnet has a lot of subscribers but not all sellers will agree to sell to all buyers. Normally they are quite picky. There’s the obvious credit related issues but there’s also a marketing topic. Not all sellers WANT their stones sold through discount outlets. The reverse is also true. Smart retailers are picky about their supplier relationships and simply paying Rap a fee and listing some stones does NOT get them onto the vendor list. Retailers can and do get burned by flakey suppliers. Lastly, smart retailers are picky about their goods. They list things that they think will do well for them at prices where they can make some money. Taking every offer you can find, applying a standard markup and offering it on your own site is, frankly, a silly way to accomplish that.

Please, let's leave the critiques on the wholesaler out of this discussion, as well as offering me advice on how to shop (at least right now). The wholesaler is truly a wholesaler, and he isn't trying to sell me anything. There is no lying, and let's just leave out assumptions about him from this discussion, as it is not relevant.

This is meant to be a discussion about quantifying value, and apparently using rap sheets and rap.net was not the way to go.

That said, let's try a different approach.

Let's say I brought a diamond in to you with a new GIA or AGS sheet and asked you to tell me how much it is worth. I am not going to tell you what I paid, and I am not going to give you any guidance on the purpose, other than I want to know your honest opinion of fair market value.

I work in finance, so I know a bit about valuation techniques, although not specifically diamonds. I am sure at some level, they are fundamentally similar.

For a diamond, I imagine you could do some kind of sum of the parts as well as comparable stone analysis. You could look at each one of the 4c's (and maybe other metrics) and assign a value, building up to the stone's total value. Yes, different people will have different opinions, but as an appraiser, you should have some opinion on what each part is worth, all of which should be in tune with current market conditions. This is where I would think the Rap Sheet would be helpful.

Additionally, you could look for similar stones on the various databases, and use that as comparison. However, no two stones are alike, so you would have to make "adjustments" to the price to make your sample stones comparable to the stone you are trying to value.

Anyone ever see an appraisal for their home? They do the same thing to value homes. Maybe there is a square footage adjustment, or one has a swimming pool, or one home has a renovated kitchen...etc. Appraisers generally find one or two main criteria in common (usually location and # of bedrooms) and then adjust the rest to bring in line with the subject property. They then average the adjusted comparable sales together and come up with a value.

I am not trying to be an appraiser, so I dont need a full analysis. I am just trying to understand what adjustment an SI1+ would get from a SI1, or an H+ from an H, all things being equal.

 

[Duffy]

Almost never, as the 2.90 will usually be the largest a given piece of rough could cut and will very rarely be well cut. If it could have been a poorly cut 3.00 it would have been, simply because it would net more money to the cutter. An ideal cut 2.90 to 2.99 will be rarer than hen's teeth and will almost always then be the result of a very expensive mistake on the part of the cutter and thus will not be offered at the bargain price you are looking for.

I understand that an ideal cut diamond in that range is rare. But, at least the way I understand it, a 2.90 diamond is still cheaper on a per carat basis than a 3.00, due to the magic number. I just want to know how much cheaper. Finding the dream 2.90 might be impossible, but maybe there is a 2.85? Or a 2.80? Or a 2.75? My thought is to get as close to 3.00 (or 2.00, if I go smaller) as possible while still maintaining other standards. The Rap Sheet indicated that 2.50+ can trade at 5-10% premiums over similarly smaller stones. I was trying to narrow that down. Is a 2.55 1% higher, 2.75 5% higher and a 2.99 10% higher, all things being equal? Maybe 2.99 is completely unrealistic, so maybe 2.90 is where the 10% mark hits. Maybe 10% is wrong, and it is 15%. This is my question.

People have made it clear that there is no defined number. So, I wouldnt mind hearing opinions of the professionals on here.

In end, I find it interesting that people are quick to comment on a "good price" for a stone, but can't quantify how they determined that.

 

[arkieb1]

Almost never, as the 2.90 will usually be the largest a given piece of rough could cut and will very rarely be well cut. If it could have been a poorly cut 3.00 it would have been, simply because it would net more money to the cutter. An ideal cut 2.90 to 2.99 will be rarer than hen's teeth and will almost always then be the result of a very expensive mistake on the part of the cutter and thus will not be offered at the bargain price you are looking for.

I understand that an ideal cut diamond in that range is rare. But, at least the way I understand it, a 2.90 diamond is still cheaper on a per carat basis than a 3.00, due to the magic number. I just want to know how much cheaper. Finding the dream 2.90 might be impossible, but maybe there is a 2.85? Or a 2.80? Or a 2.75? My thought is to get as close to 3.00 (or 2.00, if I go smaller) as possible while still maintaining other standards. The Rap Sheet indicated that 2.50+ can trade at 5-10% premiums over similarly smaller stones. I was trying to narrow that down. Is a 2.55 1% higher, 2.75 5% higher and a 2.99 10% higher, all things being equal? Maybe 2.99 is completely unrealistic, so maybe 2.90 is where the 10% mark hits. Maybe 10% is wrong, and it is 15%. This is my question.

People have made it clear that there is no defined number. So, I wouldnt mind hearing opinions of the professionals on here.

In end, I find it interesting that people are quick to comment on a "good price" for a stone, but can't quantify how they determined that.

O.K finally I think I get what you are trying to achieve. Again there is no definitive answer.... Stones also can be mis-graded as well, so say a genuine 2.85 that is a G SI1 is more expensive than a 2.90 G SI1 and you can't figure out why, it could be that the 2.90 is a really low G so really it's closer to a H and the 2.85 could be a high G so really its closer to a F the 2.85 could be a slightly better cut, the 2.90 could have something else undesirable about the stone which may or may not be mentioned on the certificate.

What I am saying once again, is there isn't a simple percentage formula that works. You could in fact have the most magnificent 2.95 carat stone commanding more than a slightly milky 3.00 with the magic number. Generally and I think you are looking for generalisations stones that hit magic markers do command a higher % price, so say 2.00, 2.50, 2.75 (which are difficult to find) and 3.00.

Your question seems to be will buying a 2.80 carat, or a 2.60 carat or a 2.10 carat or a 1.85 carat be better value percentage wise than a 3.00, a 2.73, a 2.25 and a 2.00 generally yes but you really HAVE to take it on a stone by stone basis, each stone can have a different % depending upon a wide variety of factors like where the rough came from, how accurate the grade was, how well cut the stone is and a heap more.... A lot of retailers are looking for these specific stones as well making them more difficult to find, and as a result nice ones are not that common. Cutters, as the others here have pointed out do not actively seek to cut a top 2.95 carat stone when they can end up with a 3.00 stone.

 

[bgray]

and once again --there are too many variables. if you work in finance you should understand the impact of variables on determining value. more variables yields larger pricing discrepancies and fewer variables more accurate pricing. which is why there are narrower price swings in commodities like soybeans or corn than say tech companies.