Discussion of Brand Value

In the history of diamonds the demand for
certification is a relatively new phenomenon. When GIA-GTL first offered this
service in the 1953’s the majority of their work was with rare larger diamonds
of high color and clarity. Today even diamonds J and lower colors and I2
clarity are often sold with comparatively costly reports; consumers should have
no need for a report to judge the acceptability of such diamonds. We may
therefore conclude that a diamond grading report itself provides some
additional value above and beyond the confidence that the diamond is natural
and untreated.

Diamonds are difficult to brand, but
considering that a diamond with a GIA report can cost around 10% more than the
same diamond with an EGL USA report, this could be a quantification of GIA’s
brand value. Here are some possible reasons why GIA adds value:

  1. GIA developed the diamond grading
  2. GIA first established independent
    reporting for diamonds and gems.
  3. The GIA has trained more gemologists and
    sales people than all other institutes combined.
  4. GIA offers training and education in many
    foreign countries.
  5. GIA offers effective distance learning
    programs worldwide.
  6. GIA graduates often prefer to buy and sell
    diamonds with GIA-GTL reports.
  7. Diamonds graded by GIA-GTL have the
    excellent re-sale liquidity.
  8. A GIA-GTL graded diamond appears to have
    the GIA’s stamp of approval.

There are, however, some disadvantages
associated with GIA-GTL reports.

  1. Additional cost.
  2. No crown and pavilion data for cut quality
  3. Hence poorly proportioned diamonds are
    likely to be graded by GIA-GTL.
  4. GIA-GTL reports generally cost more than
    most other labs.
  5. GIA-GTL takes much longer to grade a
    diamond than other labs.

Diamonds with AGSL reports command the
same or slightly higher prices as GIA-GTL graded diamonds. The market perceives
a high level of trust in AGSL color and clarity grading; however their
reputation has more to do with AGS being the “ideal cut” brand. Rarely are
there diamonds listed for sale that are not AGS 0 or AGS 1. The terms
‘ideal-cut’ and AGS 0 have become synonymous.

EGL USA works very hard at building its brand through advertising and
promotion. To this end EGL USA has attempted, through
legal channels
, to stop the entry into USA and Canada of
diamonds accompanied by EGL reports from outside the Americas. If EGL USA does
grade more strictly than EGL in other countries, then diamonds with imported
certificates would damage their brand. Differentiating their certificates on
B2B listings would seem to be a priority for EGL USA to improve its brand
standing. However, further tightening of EGL USA’s grading strictness is a
double edged sword; that might result in a reduction in the number of diamonds
being submitted.



« Discussion   |   Appraisal »