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Why Advanced Images Matter...A Bad 34.5/40.8...

Karl_K

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Granted the following graphic is from 2016 and for pear shapes, but it illustrates a point. Looking at the charts we can see:
  • 0.90-0.99ct, I, SI1 = approx $3,900 per carat
  • 1.00-1.49ct, I, SI1 = approx $4,500 per carat
So roughly $600 makes the difference of shutting the doors or staying open and remaining profitable.
That $600 may be the entire profit the miner is allowing for cutting the stone based on the price of the rough.
Not sure what cutting margins are today but there for a while they were super lucky to get 20% and it put a lot of them under.
 

daisygrl

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This is an interesting thread (as I have mentioned that I am a 34.5/40.8 nut), so, please, keep us updated.
 

Diamond_Hawk

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What I like about the above graphic (though possibly simplistic for today's computer generated rough analysis) is that it undeniably explains the oft-use phrase "pay a premium" for super-ideal cuts. People often use the term derisively, but this graphic clearly explains why the best-cut diamonds often cost more.

Assume the cost of the rough to be X. Obviously the cost of the finished combined carat weight of the diamonds must cost X+profit.

So the "Better performance" diamonds, though smaller than the "Average performance" diamonds must be sold at a similar (or exactly the same) price-point.

That means the "Average" diamond with the steep and deep cut on the left and carrying - say - 1.5 carats, would have the same consumer cost as the "Better" diamond on the right that may be around 1.35 carats. In both cases the cost of the rough was the same, the cost of labor was likely more for the "better" performance diamond (but at least the same), the cost to market, photograph and present the diamond was the same (or more for the better performance diamond depending on what type of images are being supplied). This means the total profit from the two diamonds sold as "Better" must be equal to the profit from the two diamonds sold as"Average."

All of this makes me wonder why the accusatory statement "You'll pay a premium for that super-ideal" (as if it is some type of 'tax' on the consumer) even exists. Of course super-ideals cost more per-carat. The rough cost is identical, but the amount of finished product extracted is (or can be) very different.
 

Karl_K

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All of this makes me wonder why the accusatory statement "You'll pay a premium for that super-ideal" (as if it is some type of 'tax' on the consumer) even exists.
Because it is true, the value proposition has changed in my 16+ years on PS.
In the early PS days you could go into a b&m and get what is more likely an inferior diamond or come online and spend the same or less on a super ideal.
There was value, because you got more for your money compared to the place you were most likely to buy from if you didn't buy from one of the dealers here.
Now the main competition is the other online dealers not b&m.
The value proposition has changed, now you have to decide if the premium over the most likely market you would otherwise shop in is worth it.
That it costs more to produce is not the buyers problem, that is the cutter and sellers problem to build enough of a value add to make it worth the extra money they have to charge.
 

Garry H (Cut Nut)

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I admit defeat, the inclusions do all line up. Apart from the 2 larger obvious ones- there are 3 smaller which are above and beyond coincidence.
There is probably some painting and digging going on too. A great example of pushing the boundaries Sledge!

1580276062974.png
 

Mlh

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Why is painting/digging excluded from the reports? What does Gia say about this? Do they consider this in the cut grade?
 

Garry H (Cut Nut)

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Why is painting/digging excluded from the reports? What does Gia say about this? Do they consider this in the cut grade?
They do but they are rather opaque about their method and their standards.
It should be done with a scanner the way OctoNus Helium reports grade it.
 

sledge

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Thank you to all the Trade involvement in this thread. I appreciate your interest, thoughts, comments and contributions.

Glad we were able to determine it's accurate and we can use as a learning tool. Sadly it comes at the expense of a hacked up stone and possibly eroding consumer confidence more.

Also, I appreciate greatly the supplier providing the advanced images but I would imagine in their eyes this is the risk of doing so and creates hardship for them to make a sale, and consequently more resistant to providing advanced images. So while it may help win this particular battle, is it hurting us in the larger picture of war?

Another viewpoint could be it's inconsequential. The bulk of buyers won't know to ask or how to interpret the advanced images. Which also means they probably won't pick up on the wonky symmetry in the normal photo. For me, this is what I find to be tragesty. Average Joe Consumer does a quick Google search and finds XXX to be the premier stone. He goes a little above and reads one of the articles that talks about proportions but not so in depth to learn more so in his mind it's XXX and has good enough proportions so he makes a choice to buy.

Who's at error here? The cutter for maximizing profit and cheating or GIA for not implementing stricter control measures to detect cheating and ensure a stone is truly excellent when it receives that moniker. I can see how the labs may feel they aren't quality control technicians but the fact they offer a cut grade at all sort of loops them into that rather they like it or not (at least from my perspective).

But in reality, at the end of the day diamonds are a LUXURY product. There is no life/death associated with the product such as a building, road, bridge, car, etc that if it fails can cause harm. So standards and education on the matter is a slow process.

One thing seems certain to me, we need a place like PS to continue educating and hopefully pushing vendors, suppliers, labs, etc to grow & improve the available products, processes, etc.
 
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caolsen

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As we’d say in Kentucky ‘that there rock been hit with the ugly stick’...
 

daisygrl

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I admit defeat, the inclusions do all line up. Apart from the 2 larger obvious ones- there are 3 smaller which are above and beyond coincidence.
There is probably some painting and digging going on too. A great example of pushing the boundaries Sledge!

1580276062974.png
How can one tell that the diamond has digging going on?
 

diamondseeker2006

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The fact is, most buyers think GIA XXX is enough. They don't know the difference. People here know to get images. I don't see this as any different than any other diamond that falls within the range we recommend. We always recommend getting the ASET or IS. This was a good reminder that it's always important to do so. But I will have to say, it's rare to see one with these measurements look so bad.
 

Diamond_Hawk

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Because it is true, the value proposition has changed in my 16+ years on PS.In the early PS days you could go into a b&m and get what is more likely an inferior diamond or come online and spend the same or less on a super ideal.There was value, because you got more for your money compared to the place you were most likely to buy from if you didn't buy from one of the dealers here.Now the main competition is the other online dealers not b&m.The value proposition has changed, now you have to decide if the premium over the most likely market you would otherwise shop in is worth it.That it costs more to produce is not the buyers problem, that is the cutter and sellers problem to build enough of a value add to make it worth the extra money they have to charge.

Understood, @Karl_K.


What you are describing - as I’m sure you know - is the market correction for the value of information. In years past, when jewelers would charge mark-ups of 30-50% and more in local B&Ms, it was standard to sell a (perhaps inferior cut) diamond at that same mark-up.

Once information about cut became available to the consumer, coupled with those better-cut diamonds online where the mark-up was far less, it was no wonder you could find a well-cut diamond online for cheaper than an “average” cut diamond.

But, as the margin for profit has decreased dramatically due to online search engines, “comps” and transparency, the information about diamond cut the average person can access has increased.

So, if in 2003, you could get an average XXX diamond at your local B&M for 8K (at a 30% mark-up) and an exceptionally cut Ideal+ same-size diamond online for $7500 (at a 10% mark-up) lucky you! But the cost to create and manufacture the diamonds was still not the same - the $6750 base cost of the super-ideal was still greater than the $5600 base cost of the average XXX, the sellers were just taking differing profit. Internet sellers have long accepted slimmer margins. Initially because the first models didn’t have rent/showroom expenses, and eventually because an abundance of online players has leveled the playing field somewhat.

Few consumers would have known the margin disparity back in the day, however, because little to no info was available for them to compare.

Today, with internet retailers running on the slimmest possible margins, that has now corrected itself. no one can get 100% mark-up (or 50, or 30, even 20 is hard) if they are competing in the online world. So NOW, cost basis is a major factor in the disparity between super-ideals and the average XXX.

As you mentioned the service rendered (number of images, return and upgrade policy, personalized packaging and customer service, etc..) also play into that cost, but the raw material is the main criterion.

Rather than feeling like one is “paying a premium” it seems more like the better cut options were simply planned and executed and refined in an aesthetically consumer friendly manner. So the raw material gets smaller. Meanwhile the average XXX with PA over 41.X and depths at 62%+ and no fine tuning comes at a discounts - for not being planned and executed for optimum spread and light return.

It’s a nuanced difference but probably more accurate. Especially when the margin/profit made by sellers of the average XXX per diamond often winds up being more than the margin/profit per diamond that super-ideal sellers make. At B2C we sell both a planned “super-ideal” line and a huge virtual inventory. The margins are slim on all, there is no added “premium” for the top-cut line. I have always thought of the bulk, virtual diamonds as being cheaper or “discounted” when comparing them to our Perfection line.

Some may look at it as a distinction without a difference, but from a vendor standpoint I have trouble seeing it any other way.
 

Texas Leaguer

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@Karl_K and @Diamond_Hawk both make good arguments.

I tend to feel as Hawk does that when people talk of the 'premium' associated with precision cut diamonds there is the sense that they are implying that you are just paying extra to own a 'brand'.

To me, it is about being 'right priced' in terms of value, as opposed to a premium slapped on it. A diamond that has not been refined as thoroughly can be expected to be available at lower price (discounted) relative to a more refined product.
 

Garry H (Cut Nut)

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@Karl_K and @Diamond_Hawk both make good arguments.

I tend to feel as Hawk does that when people talk of the 'premium' associated with precision cut diamonds there is the sense that they are implying that you are just paying extra to own a 'brand'.

To me, it is about being 'right priced' in terms of value, as opposed to a premium slapped on it. A diamond that has not been refined as thoroughly can be expected to be available at lower price (discounted) relative to a more refined product.
Some people have accused me because of the elitist post and such comments that I am steering people away from Supa Dupa branded cuts.
On the contrary, I understand the world has a % of perfectionists.
The problem is that most people think D Flawlesss is perfection.

I believe the more people we can convert to F VS with better or best cut - the more likely there will be a 10X bigger cohort who come back for really top cut when they see what better gets them.

Sledge, why not write this stone up and we can make an Article that we can all refer to?
 

Karl_K

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Yes, the difference between discount and premium depends on which side of the deal your on.
A top end dealer will see everything else as selling discounted where a person shopping would see the top end having a premium.
 

Texas Leaguer

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Some people have accused me because of the elitist post and such comments that I am steering people away from Supa Dupa branded cuts.
On the contrary, I understand the world has a % of perfectionists.
The problem is that most people think D Flawlesss is perfection.

I believe the more people we can convert to F VS with better or best cut - the more likely there will be a 10X bigger cohort who come back for really top cut when they see what better gets them.

Sledge, why not write this stone up and we can make an Article that we can all refer to?
Garry,
First, I very much like your idea of encouraging prosumers to create educational content for the knowledge base. I think @sledge could be a GREAT contributor to that effort. I know others could contribute as well in their individual areas of interest.

It would be helpful to set up a framework in which that kind of collaboration could take place. There should be a mechanism by which any contribution could be vetted by experts and edited for clarity and readability. Make it a group effort in which all those with time and interest work together to achieve consensus and make the material as useful as possible.

Regarding your other point, I don't think it is the purpose of an information forum to 'convert' visitors to any particular type of product, but rather to educate them on the pros and cons of a range of products and then help them decide what is best for THEM.

Enthusiasts (prosumers) will naturally have their preferences and that is healthy for a robust give and take of ideas. As long as ethical behavior on the part of all participants is monitored and rules enforced, this is a formula for a robust community.

To attempt to modify or steer the natural instincts of prosumers in some designed direction is a recipe for demotivation of participation and a much less robust and useful forum.
 
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Karl_K

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It would be helpful to set up a framework in which that kind of collaboration could take place. There should be a mechanism by which any contribution could be vetted by experts and edited for clarity and readability. Make it a group effort in which all those with time and interest work together to achieve consensus and make the material as useful as possible.
For many of my articles I reached out to a group of friends and industry experts to help with editing and consultation on information. They are credited in my articles.
I would be more than happy to help anyone doing the same.
 

sledge

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Thanks for the vote of confidence everyone. I will throw something together and submit for editing and input so it can be published.

Andrey actually reached out and asked about helping re write some stuff prior to this so I need to make time for that as well.

I may consult a few of you on the side for images, etc if you don't mind helping.
 

Mlh

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How does James Allen know the symmetry is worthy of true hearts if they are using rounded Gia numbers?
 

jp201845

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How does James Allen know the symmetry is worthy of true hearts if they are using rounded Gia numbers?
It's effective marketing, all they do is find a decently cut stone like a GIA triple X or AGS 0 and put a branded badge on it. By no means they are cut to the precision like WF or CBI.
 
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Garry H (Cut Nut)

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How does James Allen know the symmetry is worthy of true hearts if they are using rounded Gia numbers?
They take Hearts photos pavilion side and ideal-scope photos rather than arrows photos which is better for us than arrows because you can judge leakage and other factors better.
I am not sure, but i think they do this for all stones and select those with better Hearts and Arrows than stones like we have been dissing in this thread.
They are virtual though, and not sitting in the safe like the supa dupa H&A's offered by some other vendors.
So there are upsides (<$'s) and downsides (>$'s) that you get with a top of the tree product including more info and owned by the vendor. Vendors only want to own diamonds that meet their strict requirements.
 
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