Low Price Diamonds.  Diamond Customers are Cheating Themselves.

As a diamond wholesaler with 40+ years of experience in addition to two generations who preceded myself, there is nothing that upsets me more than seeing the ruination of the engagement ring buying process as a result of the Internet.

No, I am not referring to the loss of the “romance” that is inherent in the process of selecting a diamond engagement ring. I understand that getting engaged is a time honored tradition that I hope is filled with excitement and romance and promise despite changes in the way that one goes about in the selection process.

My frustration stems from the fact that, to many consumers, the search for an engagement diamond has evolved from the acquisition of a something that is supposed to be beautiful to something that is not beautiful at all.

Internet searches for anything – whether a TV, an appliance, or personal items – are often motivated by finding the ”BEST” price. To many consumers, the “BEST” price is the lowest price. This customer ignores the basic concept of “Value”.

When this motivation is applied to a diamond engagement ring, the customer is often the loser in that while the price may be low, the diamond is most likely not what it is supposed to be – something that is truly beautiful and spectacular!

I speak from experience. In my wholesale business I sell beautiful engagement diamonds and beautiful diamond engagement rings priced from $1,000.00 (or less) to $100,000.00+! I have sold many $1,000.00 rings that I know are truly beautiful and which I am certain that the buyer will look at and will admire.

I have also sold $10,000.00 and $20,000.00+ diamonds that are “Price Point” diamonds. These diamonds may be 20% to 50% cheaper than a “nice” diamond of the same Gemological grade. These are diamonds that were purchased by a buyer who only understands low price. In this case, the buyer got the “deal” he/she was looking for but sacrificed the overall attribute of a diamond – something that is spectacular and precious.

Unlike the professional pride I feel when I have sold a beautiful $1,000.00 ring and the knowledge that I have truly served the client with the “right” diamond, I gave the “Price Point” customer what they wanted – lowest price!  This is not the diamond that I want to sell but unfortunately there are consumers who are cheating themselves out of one of Nature’s most beautiful creations as they chase only the lowest or best price.

When set into a diamond engagement ring, the difference between the low priced diamond and a more expensive diamond is the difference between something that is truly beautiful and something not beautiful at all unless the buyer thinks that lowest price is beautiful!

I admit that I have fallen victim to the low price Internet search game myself on purchases that I have made. I have bought several items over a period of years that were not up to my quality expectations. Sometimes I just live with my mistake. Sometimes I ended up spending much more money because I ended up replacing the original item with a better quality item. In this case I ended up paying significantly more that I would have paid in the first place if I had just bought the better quality product.

(For those who need specifics, I urge you to buy a Breville ($144.99) toaster oven instead of the Black & Decker ($32.99) toaster oven that is 1/4 of the price!  Yes, both are toaster ovens! However, the extra money spent is the difference between a cheap toaster that sounds like a ticking time bomb and which doesn’t make good toast and one that does it right and will continue to do so everyday – for many years!)

In my wholesale diamond business, I have seen a significant increase in the number of ugly diamonds in the market. This is in response to increased market demand for lower quality “price- point” diamonds that are being marketed on many of the leading Internet diamond websites.

Additionally, I often see diamonds that one has bought previously and now want to trade-in or just simply sell – often because the buyer has come to understand that their diamond is not beautiful and the customer now wants to acquire a “nice” diamond.  Unfortunately this same buyer will come to understand that a nice diamond will always have “value” and a price-point diamond isn’t worth much – when you are buying it or trying to sell it!

A diamond engagement ring is something that you do not want to make a mistake on. It is something that you / your wife will wear every day for many years. Hopefully, a lifetime!

This is not to say that a diamond engagement ring has to be expensive. Beautiful diamonds come in all sizes and all budgets.  If you pay attention only to the lowest price, you are cheating yourself out of acquiring something that is beautiful. And cheating yourself out of something that you will cherish and appreciate every day of your life!

I have a sign on my office wall that reads:

To the customer who insists on finding the “best” price, this quote will be meaningless, as he/she believes that he/she has found a way to beat the system. Trust me, they haven’t!  To others, I urge you to understand the difference between “low price” and “value” when going about the diamond buying process.

As I have stated in my previous posts, the best way to buy a diamond is to put your “trust” in someone who is “knowledgeable” of diamonds. You may want to believe that you have all the knowledge that you need because you have “learned” from the Internet.  I assure that that knowledge of diamonds is something that cannot be learned from the Internet.

Most importantly, buy a diamond with your eyes!!  While a diamond grading report may be critical in buying a DEF color / VVS clarity diamond, a diamond grading report is only a small part of the buying process when buying the typical engagement diamond.  That is why there are such pricing differentials even among similarly graded diamonds.

I urge you to find a GIA credentialed Gemologist or professional jeweler in your community and to look at a diamond with your eyes. I believe that when you do this, you will benefit by the professional expertise that will be shared and you will benefit by acquiring a diamond that you will be proud to own for a lifetime.

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For those who are disbelievers of what I have stated above, here I will attempt to illustrate the differences between a “nice” diamond and a price point diamond.

The photos below are four actual photos of four diamonds each of the same carat size and same grade.  Each of the four diamonds are graded as “H” color /”SI2″ clarity.

I have listed with each photo the exact diamond weight, color/clarity ratings, proportion grades and the “wholesale” price for these diamonds.

1.00 Round Diamond, H/SI2, IGI Certified, IDEAL CUT, EX EX EX
Wholesale Cost: $3,250.00

 

 

This diamond is certified by IGI as opposed to GIA.  This lab is not in any way in parity with the standards of the GIA.  Diamonds from IGI and EGL are much less expensive than similarly graded diamonds with a GIA report.

Note the two major white flaws on the left side of the diamond. In addition, note the major black carbon inclusion located in the center. These flaws are visible to the naked eye (without magnification). This diamond is lacking brilliancy and fire.

This is not a nice diamond. This is a Price Point diamond. When set into an engagement ring, one will easily see obvious flaws.

 

1.01 Round Diamond, H/SI2, IGI Certified, IDEAL CUT, EX EX EX
Wholesale Cost: 3,950.00

 

This diamond is also a non-GIA graded diamond.

Note the many black inclusions in this diamond.  These flaws are visible to the naked eye (without magnification) and the diamond is lacking brilliancy and fire.  Additionally, this diamond has an overall grayish tone because of the nature of the inclusions.

This is not a nice diamond. This is a Price Point diamond. When set into an engagement ring, one will easily see obvious flaws.

 

1.01 Round Diamond, H/SI2, GIA Certified, IDEAL CUT, EX EX EX
Wholesale Cost: $4,600.00

 

Note the  black inclusions in this diamond located in the table area (Center) as well as on the left side of the photo.  Though better than the diamond above, these flaws will be visible to the naked eye (without magnification).

This diamond is a good example of the majority of diamonds sold on leading internet sites. This diamond, though better than the two diamonds above, will still have visible inclusions when set into an engagement ring and will tend to have a more grayish tone than a “nice” diamond.

 

 

1.01 Round Diamond, H/SI2, GIA Certified, IDEAL CUT, EX EX EX
Wholesale Cost: $5,400.00

 

This is the “right” diamond.

Although it is priced at 66% more than the cheapest diamond (top photo), this is what a beautiful SI2 grade diamond should look like. It has no inclusions or flaws that are visible to the naked eye and will sparkle with brilliance and fire.

This diamond will be an absolutely beautiful in an engagement ring.

 

I have written about his subject before, as this is a subject of frustration. See: www.ndrdiamond.com/blog/lowest-price-gia-diamonds

 

Channel 6 ABC in Philadelphia discusses Diamond Prices.

It seems to be a time honored tradition that TV news does a story about diamonds every year or two before Valentine’s Day.

Nydia Han, the Consumer Reporter for 6ABC, did such a segment yesterday. In this story, she discussed diamond pricing among various diamond retail stores in the Philadelphia area.

Though I agree with her conclusion that consumers receive much better “value” in independent jewelry stores as opposed to mall type jewelry stores (e.g., Zale’s, Jared or Kay), I found this entire segment to be fallacious and misguided on many levels.

I have been involved in the wholesale diamond business for more than 40 years. In addition, my business dates back nearly 90 years. I understand diamonds as much as anyone in the world. I have been published in both US and international trade publications.

The Channel 6/ABC report on diamonds focused on retail diamond prices. There is perhaps no other product in the world like a diamond. A diamond is a unique and beautiful natural creation that is valued for its intrinsic beauty. No two diamonds are exactly alike. To base the news story on the “best” price for a diamond entirely ignores the concept of “value” which is a measure of quality in reference to its price.

In my wholesale business I buy and sell many diamonds. I look at many thousands of diamonds a year. I choose to reject approximately 98% of the diamonds that I evaluate because they fail to me the criteria that I have adopted in determining the beauty and value standards that I adhere to.

The 6 ABC diamond segments discussed the 4Cs of a diamond. The 4Cs refer to Cut, Carat (size), Color and Clarity. What the report failed to acknowledge is that within the universe of diamonds that may be similar with regard to the 4Cs, one diamond may be valued at more than 100% more than another.

In my wholesale business, I regularly discard cheap low price diamonds when selecting inventory. Though the price is low, these diamonds are not beautiful and, in my professional opinion, not worthy of the qualities that make a diamond valued. It is my professional duty to provide the retail jeweler/retail consumer not with the “best” or “lowest” price but to provide a beautiful diamond that will be admired and cherished and valued when it is worn in a ring or other jewelry for a lifetime.

The Channel 6/ ABC report was insufficiently researched, erroneous and misleading to the public.   The most important advice that I can give the retail diamond consumer is to avoid buying the “cheapest” or “best” price diamonds.   Buying a diamond for its low price fails to take into consideration the concept of beauty and value. Most importantly, the consumer must understand that a diamond is supposed to be about something that is spectacular and beautiful.

Neil Reiff