Rapaport Diamond Specifications

[denverappraiser]

Rapaport group, the biggest player in the wholesale diamond world, has enter the world of diamond grading scales. They’ve got a new system for grading round brilliant cut stones.

It’s an interesting deal.

The entire press release is behind a paywall and I’m not sure if I’m permitted to show it or not but given the impact this is likely to have on the industry, it seems relevant. I’ll post it and see if they complain. In a nutshell it’s for round brilliant cut natural diamonds only, rather like the GIA cut grade. In fact, GIA grading is a prerequisite. There are 14 grades, and the top 5 are all subcategories of GIA-excellent. The other 9 are divisions of GIA-vg.

I"m curious what the prosumers think of this. It's a whole new approach. Other than focusing table and depth a little bit form the GIA specs, none of their criteria have anything at all to do with proportions for example. Is this a valid scale for deciding which GIA-xxx is the 'most excellent'?


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[luvdajules]

I'm curious to hear others chiming in. Not a prosumer, but enthusiast. My quick take...this new system is attempting to categorize "worth", not light performance or visual beauty. So, a diamond in a higher Rappaport category should cost more, how much more, not sure As you go the grades.

When I went through the appraisal process last year, I learned from one local appraiser that a triple x diamond with a specific color and clarity has a range of retail price, and maybe only 10 to 20 percent room for best cut. This surprised me, I figured the top cut or superideals would be more than that from an appraisal point of view. This was just my singular diamond purchase, so not a lot of experience.

Given the tables I saw and my understanding of the usage, it's possible that a non superideal cut stone could get a higher Rappaport grade than a similar superideal diamond that doesn't meet the criteria (like faint fluoro or falls on .00 weights).

Very interesting...I guess it will help the pricing schemes for both trade and consumers, but by adding complexity.

Eta...I don't think as a consumer, that I would change my way of buying diamonds. It's interesting how trades people might use it, but that will just show up in the price they ask. It's up to the consumers to decide for themselves what is beautiful and price it according against other offerings. I'm glad to see additional guidelines though, it should help to protect interested parties.

 

[denverappraiser]

Price isn’t one of the variables but it’s clearly the intention. By supplying a scale that highlights certain things and ignoring others, they lead dealers by the nose to pricing things. You can bet that dealers with A1 stones are going to promote that for example.

Some things they like (beyond the things already covered by GIA):
EyeClean claims
Claims of 'no center black'
Location of origin claims.

Some things they DON’T like.
fluorescence.
.00 sizes.
Clouds not shown.
Culets, even tiny ones.
Knots, cavities and open inclusions.
Extra facets
Graining
Green tint.
Deep stones.

Things they ignore:
AGS light performance (actually, AGS entirely)
Transparency
Spready stones.
Steep/deep, or actually anything else involving crown and pavilion angles.

 

[diagem]

Price isn’t one of the variables but it’s clearly the intention. By supplying a scale that highlights certain things and ignoring others, they lead dealers by the nose to pricing things. You can bet that dealers with A1 stones are going to promote that for example.

Some things they like (beyond the things already covered by GIA):
EyeClean claims
Claims of 'no center black'
Location of origin claims.

Some things they DON’T like.
fluorescence.
.00 sizes.
Clouds not shown.
Culets, even tiny ones.
Knots, cavities and open inclusions.
Extra facets
Graining
Green tint.
Deep stones.

Things they ignore:
AGS light performance (actually, AGS entirely)
Transparency
Spready stones.
Steep/deep, or actually anything else involving crown and pavilion angles.

Thanx Neil,
I would say this clearly shows Rapaport is loosing relevance with current affairs (changes).

 

[denverappraiser]

I should have included on the list of things they ignore:

Hearts and Arrows
Anything having to do with any sort of refelctor image.
HCA

 

[diagem]

I should have included on the list of things they ignore:

Hearts and Arrows
Anything having to do with any sort of refelctor image.
HCA

They are already trying for quite a few years to find a way to commoditize round brilliant Diamonds.
Commodity = simple

One thing is for sure, Diamonds are not simple.

 

[pyramid]

So if Rappaport is following in GIA's footsteps by backing their XXX Grade, could we see AGS becoming obsolete, two big businesses against them?

 

[denverappraiser]

Great question. This is definitely an endorsement of GIA-xxx and yes, I think it may be a problem for AGS.

One of the PS mainstays is that GIA-xxx’s are not all the same. Giant amounts of energy are devoted to that here. As obvious as that is to the people here, it is actually an outlier of a position in most stores. Even big players like Blue Nile and Jared’s don’t acknowledge it. That’s the top grade and it’s as good as it gets. This acknowledges it in a big way... The top 5 grades are all subdivisions of xxx.

AGS graded stones are, by definition, C3’s because they don’t have the GIA branding. That’s one step up from the bottom. Hopefully Rap’ll create some sort of ‘other’ category or at least leave them out of the system entirely rather than lumping them in with the junk. We’ll see how it plays out.

The industry has some pretty sharp people in it and the effect on AGS, if any, will be subtle. With the exception of table and depth, the criteria used here aren’t proportion based and 100% of it is coming from the GIA inspection while the differentiation at AGS is nearly all about proportions and cutting. There’s a few subtle things that will make it difficult to apply this to AGS stones. For example, in the AGS fluorescence scale, they have the grade ‘negligible’ but not ‘none’. That means that even if they dropped the GIA-only lab requirement, no AGS stone would be eligible for A1 as it’s currently written.

Does it matter? Maybe, maybe not. But that’s why it’s interesting.

By the way, here's a public link to it that's easier to read than my file attachments above.
http://www.diamonds.net/Prices/RapaportSpecs.aspx

 

[WinkHPD]

Interesting Neil,

My take on this is that as long as my clients are able to see the diamonds, preferably side by side and that THEY are telling me that my diamonds are more beautiful than the other diamonds, then I think Rap is going to be the one banging his head on the reality that cut matters. GIA XXX matters only because the public does not yet ken how useless it is.

More and more retail stores are beginning to carry my brand of diamonds, and their clients are now telling them that the branded diamonds are more beautiful than the non branded diamonds. It may take yet some years, but eventually public demand for better information will force an adjustment in the GIA grading procedures.

In my opinion, it will eventually result in the cutters also being forced to improve their output, just as the release of the current GIA cut grading system did. The overall level of cutting is better today than when the original AGS grading system was released and GIA was forced to follow suit. With more and more of the public being aware of better cutting, I am guessing that eventually both AGS and GIA will further improve their cut grading procedures, and the cutters will then again to be forced to improve the overall level of their cutting.

I see this as a great boon to the diamond buying public, and am excited to be in the industry during these tumultuous and incredibly interesting times. As for Rap, I think he is destined to fail in his attempts to create diamonds as a commodity. Time will tell of course. However, if he intends to do it by saying cutting does not really matter, then I think he will probably fail faster.

Wink

 

[gr8leo87]

There has been much debate in the industry about shrinking margins of the players in the diamonds industry especially in the mid stream of the supply chain. I think commodotizing diamonds is going to result in even thinner margins and margins will start to shift upwards in the supply chain confining mostly to the syndicate and sight holders. Why is there a need to commodotize diamonds anyway?

 

[Rhino]

I don't think this is going to have any impact at all and for the most part useless. Really ... who asks for a Rappaport grade? Especially when it has no relevance on the beauty or optics of the diamond?

 

[pyramid]

So it won't come along associated with the GIA reports but be a separate report? I just wondered as it seems related to GIA with the mention of them at the top grades. Maybe just because they are the largest organisation grading diamonds but then rapport is big too, so they won't join together in this. Interesting to see what comes of it. Rapport was the man telling vendors to offer more with their selling at a talk in Las Vegas I remember, so they are now reaching out to the public too. I bet most buyers in the public have never heard of them though.

 

[denverappraiser]

The implementation is not so different than the HCA. There is no report but it'll appear in the listings of the site. You can search using I if you want. Sellers can price use it as part of the pricing formula if THEY want. I'm not expecting it to appear much of anywhere else but if the stores have to pay more for a stone because it's RapA1, they're going to either have to charge more when they sell it or avoid buying those particular stones.

 

[gr8leo87]

This could probably result in a new type of branding. 'We only stock RapA1 stones' and these may sell for a premium over A2s and B2s. There are vendors who already price their stock using a system developed arbitrarily by them although is pretty similar to the system proposed by Rap, where they price stones according to their clarity characteristics within the same clarity grade, perfection of the symmetry (hearts & arrows), internal graining, milkyness or the absence of it, flor etc.

The diamond industry in general have been more interested in the clarity characteristics and the spread of the stone as long as the certificate said excellent. Especially in the Far east and India. Triple-ex, none, no black no green no milky is a usual routine check for any stone that is being bought. Rarely are there people who request true hearts as a given for diamond purchases, no matter how important is optical symmetry to over all appearance of the stone.

Rap's specifications is a reflection of what's more prevalent in the industry over whats more desirable in terms of cut.

There are a good amount of people for whom cut is more about correct amount of spread and a right percentage of table. Period.

 

[oldminer]

I have no strong disagreement with the postings already written, but we are not really seeing a future system here. What Rapaport has attempted to provide gives everyone further insight into the less publicly mentioned issues that every diamond dealer uses to make value judgments about diamonds they are buying or selling. These are mostly items that a buyer and seller can negotiate about in coming to a final agreed price for a diamond or a package of diamonds. Since Rapaport is all about "asking prices" such further information enhances the knowledge provided to potential buyers and gives a greater amount of meaning to Rapaport's listings of stone for sale. If anything, this data may provide even more importance to GIA graded stones and at the same time more meaning to utilizing the listings on Rapnet and IDEX. It is a business move with a lot of benefit for a couple large players.

For consumers and especially for prosumers this grading will make the process of comparing one diamond to another, possibly within a very similar group of diamonds, a little bit more open process. Nothing that I see here is strikingly new or revealing, but it is organized in a systematic way which only a big player can sort of force onto the play field. It really won't change buying, selling or valuing diamonds for the trade. It might provide a bit more consistency for transactions. No doubt, consumers who are into the exacting details of buying a diamond based on a system and not just based on beauty and measured performance will find that these extra parameters add quite a lot more variety and difficulty into making their final choice. Once you create a system with so many variables, you usually find that making a decision based on the resulting grade is no more reliable than might have been made with a much simpler set of variables. In fact, this complexity may make final decision even less reliable than they have been up until now. I'm not saying that is bound to happen in this instance, but I believe it may be exactly what might happen.

 

[denverappraiser]

I agree to a large part it's useless but it actually includes a lot of the information that people regularly ask about even though they already have a GIA. For example:

Eye visibility in the SI grades.
Center black inclusions
Downgrading for certain comments, like 'cloud not shown', even though it's already part of the clarity grade.

Then there's the political component. Marange is a location and Rap hates it (as do I by the way), for social and political reasons. No longer can sellers just disavow knowledge of where it was mined, they have to specifically SAY they weren't mined at Marange. The whole business of green tints kicking a stone completely off the chart has to do with this. That's a clue to diamonds from that origin, not any sort of hint of a consumer bias against green.

One of the things that I find particularly curious is the bias against naturals on high grade stones. Separating synthetics by sight is one of the tricky things in this business and it's sure to get more important as time goes on. The first and easiest way to do it is by looking at inclusions, and the #1 thing to look for in a high clarity stone the presence of surface characteristics on naturals along the girdle. Given that we're talking about stones that have very little else in them, I guessing that this may very well be soon seen as a feature, not a problem.

 

[denverappraiser]

I don't think this is going to have any impact at all and for the most part useless. Really ... who asks for a Rappaport grade? Especially when it has no relevance on the beauty or optics of the diamond?

If it get traction in the trade, it'll get traction among consumers. Assistance in deciding which xxx to buy is a giant piece of the value add for a retailer these days. The available selection is enormous and much of the contribution of the retailer is to aid in exactly this decision. You do it with Helium scans and the like but you are a serious outlier. As far as I know, you're the only retailer in the country with a Helium machine in house. The prosumers here do it with HCA and by analyzing reflector images but this too is pretty obscure. Outside of this site, most people have never heard of the HCA and most people, even people in the trade, have basically no idea what to look for in an reflector. This is easy. In fact it's automatic. Rap says stone 1 is better than stone 2. Done.

 

[Texas Leaguer]

Alot of good commentary here. Count me among those who think this is a positive development, but not revolutionary. I agree that it benefits the consumer in bringing more awareness of some issues that matter. I do think it is somewhat of an organic response to the way the market has evolved and the kinds of information the trade is seeking about diamonds today. Remote buying in the modern era has propelled this. It gives the trade additional parameters to filter on when parsing huge numbers of available diamonds.

I don't think it will undermine the value of AGSL analysis in the least. The new rap categorization scheme is largely a separation of the top grade based upon attributes not related to cut quality. Buyers will continue to want to know about actual light performance.

I do think it will have an effect on pricing. Suppliers will want to leverage the top category to their advantage. As a related consequence, I can imagine a whole new level of grading disputes and re-checks happening at GIA!