The Rap List - Help or Hindrance?

[Miss_Mul]

This is a question for all the jewelers, wholesalers and traders out there> I'm reading a book about the diamond business in NYC at the moment and it says that some jewelers don't like the rap pricing sheet because it decreases profit margins, while others like it because it increases transparency - what are your thoughts?

THANK YOU!!!

 

[JoshuaNiamehr]

I dont see how it inspires transparency, the rap price sheet has been controversial for as long as its been around.

There are tons of conspiracy theories as to how prices are calculated and by whom.

The polishers always complain that its a race to the bottom - this doesnt have that much to do with the Rap price, but more about the trading networks that diamond traders use.... If you want to be on page one (of course most who are searching are going to sort price from low to high) you need to have the lowest price, if you want to sell your diamond fast, you need to have the lowest price...

Add the internet to the mix and "virtual inventory" - you know have millions of consumers searching the same diamonds that diamond traders are looking at - and add PriceScope to the mix - you know have hundreds of thousands of consumers looking for the best price + best make... Its no surprise that a "race to the bottom" begins to transpire.

Over the years Ive seen numerous complaints about the frequency of updates as well as the Indian diamond polishers being very upset that the price sheet gets updated on Indian holidays but not US/Jewish holidays.

I think an occurrence last week was the most controversial thing to happen to the Rap, since the Rap was created - 25 of the largest diamond polishers in the world decided to only list their diamonds AT the list price on the diamond trading networks. This requires buyers to scour each polishers own website to view the actual pricing data. This is monumental and can have a profound impact on the industry if its successful.

Time will tell if anyone of the "25" will stray from what they are calling the "union". It was interesting timing to say the least (the day before the Hong Kong Diamond Show).

Help or hinderance? Im not really sure.

 

[Paul-Antwerp]

Miss_Mul,

May I ask you how old the book is that you are reading? Title maybe?

Before answering your specific question, please understand that a book on the NY-diamond-business only tells you a limited story of the entire diamond-trade. There was a time when NY as a diamond-center represented almost total US diamond-sales, thus more than half of the world's diamond consumption, but that has changed. Looking at when the book was written may help you to put that in perspective.

- In the last years, the weight of the US consumption of diamonds has decreased,
- More importantly, easier access to information (the Internet, for instance) has assisted retailers or regional wholesalers to bypass NY as their prime source-of-supply.

Both movements have decreased the 'power' of NY and possibly has made business more difficult, competition more intense and profit-margins lower for the traditional NY-wholesaler. Personally, traveling through the US, I often sense a certain historic resentment about 'NY' with retailers.

In that spirit of 'continuous pressure on business', Rapaport, his price-list, his trading-network and even his person, have become tradition to complain about. Fact of the matter is, even with everybody complaining about the Rap-list, everybody is constantly using it as a valuable piece of information, and many experienced business-people would not even be capable to price their diamonds, if they had no access to the Rap-list.

Joshua,

I disagree with the attempt to have the lowest price being a 'driver' of the business. Sure, to some extent, this is going on with a huge supply of GIA-EX being cut around the minimum-levels of the EX-grade. And this trickles down to retailers, organizing themselves on extremely slim margins which can only be supported if they manage huge volumes, which leads to wonder whether they will make it or break it.

What you are reporting (correctly) about the so-called 'union', who are in process of taking away their asking-prices from the Rapaport trading-network, is contrary to the idea of the lowest listed price being the driver of the business. Apparently, these cutting houses (and they represent a huge volume worldwide) find it unattractive to have info on their asking-prices available to all Rapnet-subscribers, giving themselves also control on who has access to that info and how they will deal with whomever approaches them for a purchase. That info not being available anymore clearly devalues a Rapnet-subscription.

Live long,