The diamond trade has evolved significantly over the years, and now it might be possible for consumers or end users to directly buy wholesale diamonds at close to wholesale prices due to technology and e-commerce. Please see our step-by -step approach at the end of this article for how to get a close to wholesale diamond.
Two decades ago, markup on diamonds in retail stores used to be up to 100-150% more than the wholesale price of the diamond. However, at present online retailers like James Allen only add a markup of less than 15-20% to the wholesale price. This is almost the same as wholesale price if you take import tax and credit card processing fees into consideration.
First, let’s clarify the concept of "wholesale." Generally, wholesale is when producers, wholesalers, and/or merchants sell their products and goods to retailers. Retailers buy large quantities and get discounted prices. Subsequently, they sell these products to end users or consumers and add an adequate mark up to not only cover the cost of the goods and operation cost but also to generate profit.
Depending on how much of a short cut you can take to avoid the large supply chain as an end user, you might be able to get as close to getting a whole price as possible. If you know the merchant who owns the goods, than chances are that he/she might even sell it to you for the wholesale price or slightly higher as they don't sell at wholesale price if you do not buy in bulk.
This same method or principle applies to buying diamonds at wholesale prices since they are now available to end users through online platforms and diamond exchanges with minimal marks ups.
An individual can search for a wholesale loose diamond through conventional means by visiting major diamond districts like New York City, or they can buy it online where the process is more transparent as it is easier to compare the prices of many vendors at once.
Here is a step by step approach we recommend:
*** First, compare the prices of local jewelry stores. When you do this, you will find two type of prices 1) prices of independent jewelry stores which would have 25-45% mark up from wholesale price (they will check how informed you are and based on that they decide how much to quote you; their aim would be to get as much as they can from you for the diamond they sell you); 2) prices of large chain jewelers in the mall like Jared and Kays. What you will find is that while these large chain jewelers offer good financing and other terms, their mark ups would be in 80%-120% of the wholesale price. Also, usually large chains do not have high quality diamonds and specialize in selling low quality diamonds for high prices to uniformed consumers.
*** Secondly, compare the prices of diamond exchanges in your area as well as of large diamond districts like New York City if you are close to the area; otherwise, it is not important. What you will find is that the prices you will be quoted on are close to 20% above wholesale prices.
*** Third, compare the prices of online jewelry sites. There are many reputable online stores, and you can compare their prices. James Allen and Blue Nile are the biggest of them all, and you can check their prices to see how they compare to local stores' prices. What you will find is that their prices around 15%/25% more than wholesale price.
*** Once you have all this information, compare these prices in our diamond filter. We list more than one hundred thousand diamonds from thousands of dollars on our site. Our markup is only 6-8% of the whole sale price.
*** One last option could also be look for pre-owned/used diamonds. You might be able to find one for a cheaper price on eBay or Craigslist. However, one need to be very cautious in such a scenario because you'll be dealing with individuals, not a reputable company like James Allen, and there won't be any returns/warranty etc.
Now that we have covered the issue of how to find a wholesale diamond, let’s focus on how the prices of diamonds are determined:
The Rappaport Group is a huge trading platform, and they issue monthly prices of diamonds to all registered diamond dealers. Rappaport use the cost of mining and cutting diamonds and market demand and supply as key indicators in determining the prices of diamonds. After receiving price matrix, dealers use the matrix to price their diamonds. In addition, they also check the prices of other dealers on platforms like RapNet to determine how competitively they would like to price their diamonds in order to move them fast.
There are seven important factors that affect the price of a diamond. Remember the scarcer the diamond is, the more expensive it will be!
These factors include the shape of the diamond, the carat weight of the diamond, the clarity of the diamond, the color of the diamond, the cut of the diamond, the fluorescence of the diamond, and the certification of the diamond. Please explore our articles on each of these seven factors to learn more about them and shop confidently.
Compare prices on our website and contact us for more consultation.