Buying Wholesale Diamonds Locally: Is it Possible?

Sharif Khan
Sharif Khan
Last Updated    EST 
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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, the markup on diamonds in retail stores used to be up to 100-150% more than the wholesale price of the diamond. However, online retailers like James Allen only add a markup of less than 15-20% to the wholesale price. This is almost the same as the 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 markup to not only cover the cost of the goods and operation costs but also to generate profit.

Depending on how much of a shortcut you can take to avoid the large supply chain as an end user, you might be able to get as close to getting a full price as possible. If you know the merchant who owns the goods, 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 markups.

An individual can search for a wholesale loose diamond through conventional means by visiting major diamond districts like New York City. Alternatively, they can buy it online, where the process is more transparent as it is easier to compare the prices of many vendors simultaneously.

Check out this quick diamond-buying cheat sheet.

Comparing the prices of local jewelry stores

First, compare the prices of local jewelry stores. When you do this, you will find two types of prices 1) prices of independent jewelry stores, which would have a 25-45% markup from the wholesale price (they will check how informed you are, and based on that, they decide how much to quote you; they would aim 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. You will find that while these large chain jewelers offer good financing and other terms, their markups would be 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 uniform consumers.

Secondly, compare the prices of diamond exchanges in your area and of large diamond districts like New York City if you are close to the area; otherwise, it is not important. You will find that your quoted prices are close to 20% above wholesale.

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. You will find that their prices are around 15%/25% more than the wholesale price.

Once you have all this information, compare these prices in our diamond filter. We list over one hundred thousand diamonds from thousands of dollars on our site. Our markup is only 6-8% of the wholesale price.

One last option could also be to look for used/used diamonds. You might be able to find one for a cheaper price on eBay or Craigslist. However, one needs 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/warranties, 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 uses the cost of mining and cutting diamonds and market demand and supply as key indicators in determining the prices of diamonds. After receiving the price matrix, dealers use it 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 to move them fast.

Seven important factors that affect the price of a diamond

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 these seven factors to learn more about them and shop confidently.