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Sea Shells and Diamonds

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Conch Shell

As I was packing up my house recently, preparing to move, my daughter came across a beautiful Conch shell that she found on the beach in Captiva, Florida when she was young. Captiva is known for its beautiful shells.

She was admiring her beautiful shell when it occurred to me that finding a beautiful sea shell in a place that is known for its shells is much like finding a beautiful diamond.

In the world of diamonds, there are thousands of diamonds available on the Internet.  If there is one thing that I know after a lifetime of 40+ years in the wholesale diamond business, it is this: Finding a beautiful diamond is much harder than finding a beautiful Conch shell!

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Recently I was evaluating the diamonds that I purchase for my “wholesale diamond stock”. I realized that for every thousand diamonds that I look at –  99% of which are certified by the GIA (Gemological Institute of America),  –  there are perhaps 20 that I purchase.

It is not a question of what the GIA report might say in terms f the diamond quality. It is a question of finding that rare diamond that you just look at and say, “WOW!’

A “WOW!” diamond is something that is truly amazing. You just want to look at it because its facets and its scintillation draw you in.  It is a work of nature and a very talented diamond cutter. It is one of the most spectacular things in the world. It is something incredibly beautiful.

It is very rare – even in a world filled with databases of many thousands of diamonds.

So, you might ask, “What is my point?”  In the sea of many thousands of diamonds (Internet diamond databases), one must understand that there are diamonds that are truly exceptional and the other 99%. Buying a diamond from an internet database – particularly the lowest priced diamond – is cheating yourself of the beauty of what an engagement diamonds supposed to be.

Maybe you think that an engagement diamond is just something that you “have to do” because it is an “expected” part of the engagement process.  This may be true to some extent. But it is something that will look at every day for many years. It should also be an investment in something that is truly spectacular.

NEIL REIFF

ARTIST CREDIT:  “Conch Shell on the Beach”.   Soft Pastel by Ria Hills (www.riahills.com)

Lowest price – GIA certified diamonds.

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Lowest Price – GIA Diamonds.

Many internet shoppers are under the mistaken belief that buying a GIA certified diamond on the internet is similar to purchasing a flat screen TV. Simple,  You just find the model number that you want. Then you go to the internet and you buy it for less.

In the case of a diamond, one might figure out the size, the shape and the GIA parameters that they want.  Let’s say in this case, a 2.00 carat round diamond, GIA “H” color, “SI1” clarity.  Simple. We go to the internet and buy it at the lowest price.

Stop right there.

A diamond is not a flat screen TV.  The GIA diamond certification report is not the same as a model number.  The specifications of a TV are identical.  There are thousands if not millions of the same TV made to factory specifications.  Diamonds are different.  A diamond is a creation of nature.  Each one is unique.  A GIA grading report attempts to describe a diamond like I may attempt to describe a beautiful woman.  It is very hard to do without seeing the woman – or the diamond.

The point of this is that diamonds with similar specifications on a GIA grading report are not similar diamonds.  There can be (and usually are) significant pricing differentials between two diamonds with similar GIA grading reports. And more importantly, one diamond will be significantly more beautiful than the lesser priced diamond.

Pictured below are six diamonds listed for sale on a leading internet diamond site. Each of the six diamonds weighs approximately 2.00 carats (Actual weights range from 2.01 to 2.09 carats).  Each of the diamonds is graded by GIA as “H” color, “SI1” clarity.  The prices for these diamonds ranges from $13,247.00 to $26,131.00.  YES!  One diamond is 50% “cheaper” than another.  Inversely, one diamond is 100% more than the other!

And you are on the internet in search of the best price.   Or is it the lowest price?  Best price for what?  Lowest price for what?

As a diamond merchant with more than 40 years of experience  (and two generations before me!),  I understand what a diamond is.  It is about something beautiful.  Beauty is about the brilliance and sparkle and scintillation.  Low price is about a price point.

In recent years there has been a divergence within the diamond industry – sort of a “fork in the road”.  There are many diamond companies that are marketing diamonds specifically for the internet. The diamonds that they sell via the internet are inferior to those that are sold in the traditional manner – to be sold via retail jewelry stores.  It is the difference between the beautiful GIA H/SI1 diamond and that of the diamond that is marketed solely based on “price-point” for the internet buyer who believes he has figured out the world.

The difference is, in the “old” days, people looked at diamonds in a jewelry store with their eyes and a jewelers magnifying loupe.  They were truly buying a diamond and not just a diamond grading report!.

Take a look at the info for the six diamonds featured below.  These are just a random sample of different price ranges that I found.

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Document (2)

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Document (4)

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When looking at each of the diamonds described above,  one must recognize that the pictures are fake and are all identical.  These  photos are not representative of the diamond in any way and, in fact, give the illusion that the diamonds are gem quality which they are not!

With regard to the diamonds listed above I know for a fact that it is not possible to purchase a “nice” 2 carat round diamond with these GIA specifications on the wholesale market within the price of the first three listings.

If I was buying a diamond for my wholesale business it would most likely be one of the three more expensive diamonds.  I believe that a diamond is supposed to be something beautiful. These diamonds may be beautiful diamonds – although, even with the info provided on the GIA report, it is still necessary to SEE the diamond.  The listed specifications of these diamonds provides no information with regard to the nature and location of the inclusions and, in reality, provides little insight to the overall beauty of the diamond.

One thing that I do know is that there are reasons why the cheap diamonds are cheap.  It may be the make. It may be the type and location of the inclusion. Perhaps there is a color tinge.  Perhaps there is a “cloud”.  There are many factors that effects the overall sparkle and scintillation that makes a diamond special!

Low price is just that. It is low price.  It is not a factor of value.  Value, on the other hand, is a reasonable price for a Renoir – despite the fact that it may be tens of millions of dollars.

 

 

Neil Reiff

The Right Diamond at the Right Price.

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Since 1994, N D Reiff Company has used the tagline “The Right Diamond at the Right Price” in many of our promotional materials – whether it be a business card or in industry advertising materials.

To me, this is not just a tagline for advertising purposes.  It reflects a commitment in each and every unique diamond that I acquire and that I offer to the jewelry trade/consumer.

This commitment to “The Right Diamond at the Right Price” is more significant today than at any time over the past 25 years.  This is because the industry is flooded with ugly diamonds.

The issue of ugly diamonds has many dimensions. The most common issues are as follows:

1.) Over-Graded GIA Reports. This is particularly obvious within the  “SI”  (Sightly Imperfect) categories where the majority of diamonds contain black carbon or other large inclusions that are visible to the naked eye. It is also a factor in many “VS” graded diamonds.  A diamond with a black inclusion or a major inclusion may be valued at up to 15% – 40% less than a diamond of the same GIA grade without such an inclusion.  The pricing differential is dependent upon the size and placement of the carbon inclusion.  A diamond with a black carbon inclusion is almost always not the right diamond.

2.) Milky Diamonds. These are diamonds that are “cloudy” and “milky”.  Many will say that the diamond looks “sleepy”. Though the diamond may be represented by  a somewhat “clean plot” on the GIA report, a milky or cloudy  diamond will be severely lacking in luster and brilliance –  the characteristic for which a diamond is valued.  This is usually not apparent by looking at the GIA report. Milky diamonds will usually be priced at 20% -50% less than a similar graded diamond that is not “cloudy” or “milky”.  A milky diamond is never the right diamond.

3.) Tinge Diamonds. Some diamonds may exhibit a gray or green or brown color tinge.  While this is sometimes indicated on the GIA grading report it is most often not noted on the GIA report. Diamonds that have a color tinge exhibit shades of color beyond the normal scope of GIA color grading which evaluates the overall whiteness of a diamond in terms of gradations of yellow. For example, a diamond may be a “H” color in terms of the GIA grading scale but may exhibit a shade of grayish or greenish or brownish tint.  This color tinge greatly effects the overall brilliance and lustre of a diamond. Such diamonds may be 20% to 50% less than a diamond that does not exhibit a color tinge.  A tinge diamond is never the right diamond.   

4.) Fluorescent Diamonds.  Fluorescence is perhaps the most misunderstood designation on a GIA grading report.   In most cases, faint or medium fluorescence will not impact the overall beauty of a diamond but will have some impact on pricing.  The designation of Strong or Very Strong fluorescence will, in many cases, effect the lustre and brilliance of a diamond and should will have a significant impact on the price of a diamond usually in the range of 15% to 35%.  A fluorescent diamond must be evaluated on a case-by-case basis and should be avoided in cases where it effects the lustre and brilliance.

5.) Cut – Round Diamond.  There is perhaps no other GIA grade characteristic that is as misunderstood at the Cut grade. It is my honest opinion that there is very little difference between the GIA cut grades of Excellent and Very Good.  For this reason the price differential between these two grades is minimal. There is, however, a significant difference in beauty and pricing for a diamond that is grade as good (or fair or poor). This may be in the overall cut grade or in the polish or symmetry characteristics noted on the report.  A good cut grade may be 10% to 40% less than a similar diamond that is Excellent.  A cut grade that is below Very Good cut should be avoided in most cases.  

6.) Cut – Fancy Shape Diamonds. There is nothing more important to the beauty of a fancy shape diamond than the cut.  There is also nothing more significant to the pricing of a fancy shape diamond than its cut. Many consumers are of the mistaken belief that the polish and symmetry attributes that are noted on a GIA grading report are an indication of the overall cut and appearance of a fancy shape diamond. This is absolutely a fallacy.  The cut has more to do with the beauty of a fancy shape diamond than anything else.  A poorly cut fancy shape diamond may be 50% less expensive than a beautifully cut fancy shape diamond.

7.) Proportion Ratio.  This issue of proportion ratios is particularly significant with regard to fancy shape diamonds.  It is applicable to all fancy shapes as it refers to proportion ratios.  These ratios affect the overall dimensions of the diamond as well as the optimal light refraction of a fancy shape diamond.  For instance, the ideal proportion ratio of an Oval diamond is 1.35 to 1.45. A diamond that is 1.30 or 1.50 is still a “nice” diamond in most cases although the price of such a diamond should be slightly less expensive.   With regard to a diamond that is significantly outside of the preferred ratio, the Rapaport Diamond Report notes this comment with regard to fancy shape diamonds:  “Prices for fancy shapes are highly dependent on the cut (meaning proportions, ratios, etc.).  .  . Off-make, poorly cut fancies often trade at large (price reductions) and are (not desirable) .”   A poorly proportioned diamond is never the right diamond.

8.) Etcetera,  Etcetera,  Etcetera .  .  . There are many other issues that affect the beauty and the price of a diamond.  Many of these issues go beyond the specifications or attributes noted on a GIA grading report.  Every diamond is a unique creation of nature as well as the diamond cutting process.  Some diamonds just have a “WOW” factor and others do not.  A “WOW” diamond is always more beautiful and more expensive than a diamond that is lacking in brilliance and scintillation and fire.

There is not a day that goes by in my office in which my discussions with retail jewelry store managers/owners/diamond sellers do not touch upon the relationships of diamond qualities and diamond prices.  These conversations usually go three different  ways:

For instance, today a retail jeweler was in my office looking for a diamond for his consumer customer who previously purchased a diamond from another retailer. His customer wants to upgrade the previously purchased diamond because it has “no life and no brilliance”.

I had the opportunity to see the diamond and I agree with the customer.  The customer purchased  a “Milky” diamond and now has regret.  Unfortunately the customer will now be paying more money to have a “nice” diamond.  Even worse, not only is the customer purchasing a new diamond in place of their earlier mis-taken purchase, the customer is now stuck with the diamond that was previously purchased as the disreputable retailer will not allow their customer to “upgrade” the diamond!

An additional conversation that I often have with diamond retailers goes like this:
“What is more salable in your store?. . . Low price OR a nice diamond??”.

To be perfectly honest with the reader (You), the typical answer to this question depends on the respect and integrity of the person that I ask. The diamond seller/retailer who is highly regarded whether on Yelp! or by community reputation will almost universally tell me that when given a choice and actually viewing diamonds, the buyer will choose the nicer and more expensive diamond.  Unfortunately, many mass market sellers tend to believe that low price is more important than quality.

The third conversation deals with the impact of the Internet on the diamond business.  Sure, the internet has impacted the diamond business at every level of the industry. Many people believe in Internet nirvana and believe that there is no reason to leave their computer screens.  These buyers never take the time to understand that a diamond can truly be something that is the essence of natural beauty.  These buyers look to the internet in which people are in search of lowest price – without understanding the meaning of value!

As one who has been art of the “diamond trade” for a lifetime, I understand that my industry serves many different “markets’ within the market.

On one hand there are diamond sellers/retailers/consumers who only believe in selling/buying cheap diamonds.  Whether this is because selling cheap (ugly) diamonds allows them to make a larger profit or because they believe that their clientele only understands low price, it is these such buyers who end up in the first category which I have described above.

On the other hand, the bottom line is this: The diamond buyer should buy “The Right Diamond at the Right Price”.

So, a diamond consumer will ask: “How do I know if it is the right diamond?”.
To that question I do not have an easy answer.

But I do know that it is my mission and my commitment to make “The Right Diamond at the Right Price” available to the market.

 

The Right Diamond at the Right Price.

 

 

Neil Reiff

 

The Truth about Blue Nile and Internet Diamond Companies.

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There is no doubt within the jewelry industry that online sellers such as Blue Nile have revolutionized the ways that many consumers purchase their engagement diamond.  Blue Nile, as well as a multitude of other online sellers, offers a virtual database of diamonds to internet shoppers at prices that were once considered to be below traditional retail prices. I add the phrase “once considered” in the previous statement in an acknowledgement to the shifts in pricing structure that have transpired through the retail jewelry landscape as a result of Blue Nile and other internet sellers.

The problem with Blue Nile and other internet diamond sellers is the process itself.

Internet diamond companies, unlike traditional retail jewelers, have no eyes-on knowledge of any diamond that they sell.  These companies are simply online brokers between diamond wholesalers and consumers.  No one in the “process” between Blue Nile and the ultimate diamond consumer has any real knowledge of what the diamond looks like.

There are two inherent deficiencies in buying a diamond in this manner.

Firstly, the process itself is based on the diamond grading report – usually a GIA report.  It is wrong to assume that a GIA diamond grading report conveys the most important aspect of what a diamond is all about – what the diamond really looks like.  In reality, this is a very significant misperception amongst diamond buying consumers.

To illustrate my point, here are two actual un-retouched photos of two different diamonds:

The diamond below is typical of what the internet shopper buys based on the GIA report. This diamond is a 1.70 carat Cushion Cut.

The GIA report looks great as this diamond meets the proper depth and table proportions. Additionally, it is graded by GIA as “Excellent” Polish and “Excellent” Symmetry.

Despite these “paper” qualities, the diamond is severely lacking the “fire” and “brilliance”and”scintillation” that makes a diamond beautiful. This diamond is actually dead and dark in the center.

The diamond pictured on the right is a 1.72 carat Cushion Cut diamond in which the depth and table proportions are also within the “proper” range. This diamond has a Symmetry grade of “Good” and a Polish grade of “Excellent”.

Though it is somewhat difficult to tell in the two photos, I can assure you that this diamond is much more beautiful than the other.  The “faceting” of this diamond creates much more “life” and “brilliance” and “scintillation”.  This diamond appears much whiter and brighter than the other diamond despite the fact that is graded as “I” color and the diamond above is graded as “G” color.

in this example, I guarantee you that the lower graded diamond is much nicer and more beautiful than the better graded diamond.  I know this for a fact.  I have seen both of these diamonds with my eyes.  It is why I am writing this article.

A GIA certificate does not describe the beauty of a diamond on even what a diamond looks like to the human eye.  The GIA certificate is essentially a document of scientific characteristics and terminology that measure minute differences in gradations that, in most cases, are beyond the limitations of what a consumer using his/her human eyes can ascertain without proper conditions and equipment.

While it is true that a “D / Flawless” diamond will undoubtedly be more beautiful than a “M / I2” diamond, It is often the case that a diamond of a lesser grade in terms of it’s GIA grading may be as beautiful or perhaps more beautiful than a diamond that has a “better” GIA grade.  This is particularly true in the case of fancy shape diamonds where the color and clarity grades have little significance to the overall appearance of the diamond.

The second deficiency of the online buying process is that the internet consumer is often searching for the lowest price as opposed to understanding that a diamond is supposed to be about the beauty and scintillation of something that is extraordinary and exceptional.

Whether searching Blue Nile or another online diamond site, without the ability to see and understand the subtle differentiations that make one diamond more magnificent than another diamond, it is easy to fall into the trap of searching only for low price with no understanding that “Value” is something different from low price.

Buying a diamond simply based on lowest price is similar to buying a $5.99 bottle of Cabernet Sauvignon!  This is not to say that one must pay $50.00 or $150.00 for a bottle of wine.  I do know, from experience, that there are very good bottles of wine that can be purchased for $15.00 to $25.00.  I also know that the $5.99 are, for the most part, going to taste bad and will not be enjoyed nearly as much!

In my  wholesale business I often ask this question to retail jewelry store operators: “What sells better in your store?  .  . The low price diamond?  .  . Or the nice diamond?”   The answer is almost universally  “The nicer diamond!”.  I agree with this answer.

I know from experience that a diamond consumer –  when given the opportunity to learn about diamonds and see diamonds with his/her eyes –  will almost never purchase the lowest price diamond and will, in many cases, choose the most expensive diamond!

Getting back to the subject title of this post, I do not have a problem with Blue Nile or other internet diamond sites.  Honestly, I was a supplier to the company that grew to be Blue Nile. I have also supplied James Allen and other internet diamond companies.

On the subject of internet diamond companies, I have a story that my mind will never let me forget.  I was in the process of “getting into” an internet diamond company when the person on the operating end of the internet business asked me the following question:  “How good are you at playing the game?”  I knew what he meant but I asked him to clarify.  He made it clear to me that the internet shopper only looks at the first page or two of diamond data.  These are the diamonds that are the lowest price diamonds.

He and I both understood that the “game” was all about giving these buyers diamonds with “issues” that make them inexpensive. With a wink and a nod, the conversation was an affirmation that the internet shopper does not understand any more than that of low price  and that the idea was to give such a shopper what they are looking for.

Whether it is Blue Nile or any other internet site, a consumer must understand that Blue Nile is simply providing a list of diamonds and diamond data that the consumer will never fully understand. The consumer must understand that Blue Nile is simply an intermediary web operation company that, in most cases, doesn’t know or care what any particular diamond looks like. They simply showcase a database of diamonds, collect your money and then arrange for the diamond to be shipped to you. Their interest is in making an additional internet sale and not in making sure that the consumer/buyer is acquiring a beautiful diamond.

It is possible to buy a beautiful diamond from Blue Nile or any other web diamond seller.  Most importantly, the consumer should question why similarly graded diamonds on Blue Nile are priced 20% or 30% or more than 50% higher others of the same GIA grade.  After all, it is the same seller who is selling the diamonds!  The consumer must understand that low price usually means a diamond that is not as beautiful as another diamond – and, in some cases, a diamond that is not beautiful at all.

Perhaps you are happy drinking that $5.99 bottle of wine!  Or perhaps you understand that low prices are just that and there are reasons why the price is low.

I offer these two bits of advice.  Go to a jewelry store and see what I am talking about. Buy with your eyes and not with your mouse.  And if you insist on buying with your mouse, understand that low price usually means a trade-off in terms of beauty.  Understand that “value” is a matter of quality and beauty in relation to price.

The purchase of a diamond is one of the most significant purchases of a lifetime – and one that you will enjoy for many years and  hopefully a lifetime!  Make it the right diamond.

 

 

 

NEIL REIFF