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structured market for coloured gemstones

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koester_2010

Rough_Rock
Joined
Apr 19, 2009
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11
Hello,

why have white diamonds an organised market (Rapaport) and the colour gemstone market is free from that.I often wondered, that it is more difficult to fix a good price, e.g. for mogok rubys, kashmire sapphires, than in the white diamond market. Can I go out, that the margins in the coloured stone market(fine qualities) are higher, than in the white diamond market ?

Mathias
FGG Gemmologist
 

oldminer

Ideal_Rock
Trade
Joined
Sep 3, 2000
Messages
6,378
"why have white diamonds an organised market (Rapaport)"

You answered your own question? ALthough far from the first to make diamond price guides, Rapaport pulled it off on a global scale. DeBeers, the major labs, open competition also made their own contributions to the demise of profits in white diamonds. This is not placing "blame" because I feel this is a natural progression of the business cycle with such a product.

It is way more difficult to fix prices on items which can''t be thoroughly graded and arranged. Black markets, smuggling, misleading information from the time of entry into the market, a lack of globally accepted standards, all sorts of good and bad treatments and on and on all contribute to the confusion with colored gems. Dealers like buying and selling what ends up a blind product. The make larger individual profits, but I am afraid their annual turnover is far lower than with white diamonds. The ROI''s may be similar, but indivdually there is more working room with colored gems.

There are so few truly "fine" colored gems and also so few sophisticated buyers of these things that while it all looks tempting, one would find that it is way less lucrative than one imagines. You can''t set up shop selling the "finest" color since you would be hard pressed to find any to stock and even harder pressed to convince buyers that you, an unknown seller, had the credentials or reputation, to make these "important" folks your personal clientele. These folks are VERY name and brand conscious. They like the comfort factor and generally are willing to pay for it.
 
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