What is a Diamond Wholesaler?

What is a Diamond Wholesaler?

What is a Diamond Wholesaler?

Posted by Sharif Khan on 14th Jan 2020

What is a Diamond Wholesaler

Diamonds are either extracted from the earth or grown in labs. That’s what they call in the diamond industry raw or rough stones. Whether natural or lab-grown, the finished product (a cut and polished stone) needs to reach the end-user in a timely fashion. How did that shinny loose stone or engagement ring get to the retailer and availed for you to purchase? The simple answer: the diamond supply chain.

That movement, from one organization or individual to another, starts from the source of the stone. From the labs or mines, the uncut diamond is sold to wholesalers, then to cutters (some of them are jewelers) and finally gets mounted onto your ring or pendant.

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Several players feature on both the upstream and the downstream diamond supply chain. The parties include miners and human-made diamond producers, diamond manufacturers, distributors, wholesalers, and retailers (jewelers). The typical definition of a diamond wholesaler is an enterprise or individual who buys and sells diamonds in bulk. But what about diamond wholesalers who buy and sell in bulk as well as in smaller volumes (or single units)?

Better yet, what about the diamond wholesalers who have premises, develop raw stones, and serve walk-in customers? Or run ready-to-wear jewelry e-commerce businesses. The bulk purchase and sales aspect form part of the nitty-gritty that you must consider in deciphering whether a diamond dealer is a wholesaler on not. To draw your conclusion, you’ll need to examine factors such as the subject’s business model, partnerships, and their affiliations in the diamond industry.

The Basic Characteristic of a Diamond Wholesaler

All other factors aside, a diamond wholesaler is a diamond retailer’s supplier. Diamond wholesalers significantly contribute to the value addition of the diamond supply chain. Typically, diamond wholesalers make large purchases of both rough and cultivated diamonds. That transaction can happen directly with individual alluvial miners. It could also be a situation where diamond exploration companies source from small scale miners and fulfill pre-orders of a wholesaler.

Other wholesalers have their mines, for instance, Canadian diamond producer,  Dominion Diamond. The over 150 kimberlite pipes at the Ekati mine and its other subsidiary mines enable it to produce tons of rough stones. It clocks right behind  De Beers and Alrosa in terms of global diamond wholesale transactions. Cutters get their rough diamond shipments through raw diamond wholesalers such as Dominion Diamonds through an elaborate network of distribution.

Exclusive Distribution Brokers: The Diamond Wholesale Brokers

The business connections between a diamond wholesaler and bigtime miners create yet another category of a diamond wholesaler. And that’s the type that broke rough or cut and polished stones to other diamond wholesalers. Case scenario: Assume diamond wholesaler a sources rough diamonds from a diamond producer (kimberlite miner or alluvial/paleo-placer deposit sifter or lab-grower).

Upon classification and packaging, wholesaler A unloads the uncut stones to local wholesaler B. That makes diamond wholesaler A an intermediary hence a wholesale diamond broker. B is the local wholesaler who goes on to supply regional cutters and jewelers, some of whom have in-house cutters.

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Cultured Diamond Makers

Similar to natural diamond miners and wholesalers, cultivated diamond producers are also wholesalers in their own right.

Unlike natural geological processes, gemologists use chemical vapor decomposition (CVD) and high-pressure, high temperature (HPHT) to create these imitations. As a result, the cultured diamonds emulate the God-given stones in both appearance and crystal composition. They’re also made relatively faster compared to earth-mined ones. The controlled process makes it possible to produce both colorless diamonds and fancy colors. Cutters and jewelers can avail to their customers a wider variety of diamonds thanks to CVD and HPHT diamonds.

The persistent opposition to human-made stones has since toned down. Much of that change comes from responsible jewelry purchasing on the part of the clients who want conflict-free stones and a greener environment. The regulatory actions taken by the Federal Trade Commission (FTC) have also elevated  lab-grown diamonds to a newer height. The FTC recently adjusted its definition of a diamond to include artificial stones. It even suggested the “synthetic tag” be dropped because lab-grown stones are 100 percent crystallized carbon, which makes them real diamonds

The mining industry is shifting miners are getting depleted and the global diamond industry prices are more volatile than ever. De Beers has had to reduce its rough  diamond prices by 5 percent due to shrinking demand in its top consumer markets. Besides, the Jewelers Vigilance Committee has acknowledged the rising preference in cultivated diamonds. De Beers itself has followed suit and launched a synthetic diamond line under subsidiary brand LightBox.

More to that, cultured diamonds have been 100 years in the making and continue to improve in terms of both industrial and gem quality. And to top it up, there has been a 3 percent increase in their diamond market demand: a win-win for wholesale lab diamond manufacturers!

Diamond Wholesalers with Novice and Hybrid Business Models

While a majority of diamond enthusiasts are in the market to make a purchase, others already have stones that they’re looking to resell. They could be selling an inherited piece they don’t need or  selling a diamond engagement ring out of necessity. Diamond wholesalers such as De Beers and Abe Mor make that process easy. Abe Mor is a diamond wholesaler that also makes it easier for private sellers to resell their diamonds. Longevity and experience in the diamond industry and economies of scale enable Abe Mor to offer the best resale prices.

You already know that De Beers is the world’s largest rough diamond producer and wholesaler—large enough to hoard raw stones and affect global prices. What you don’t know is that the De Beers Group has diamond industry-related partnerships. For example, De Beers’ collaboration with Circa (global pre-owned diamond jewelry dealer) enables wholesale purchase and resale of vintage natural stones.

Additionally, Lightbox (online artificial diamond jewelry store) and De Beers Group Auctions (a digital auction portal) are two of its latest ventures. The move marks nuance income streams for the diamond magnate. Its customers now have an array of customer benefits, including convenient bidding and buying and price protection.

It’s evident that the traditional definition of a wholesaler, particularly a diamond wholesaler, can no longer be universally accepted. A section of diamond wholesalers now doubles up as diamond developers, retailers, and

Consultants. Others specialize in the production of both earth-mined diamonds and artificial ones. The bulk buying and bulk selling notions don’t suffice. Today, diamond wholesalers don’t necessarily buy diamonds in multiple quantities, but they buy at much lower prices compared to what they offer retailers.

As far as the diamond wholesale business goes, retailers aren’t the exclusive wholesaler’s customers they once were. You can easily contact wholesale dealers such as Abe Mor and buy a single loose stone. Circa can also find you the perfect  vintage diamond ring to match your preference for antiquity. Remember that option next time you go diamond shopping.

You have to do a quick search of GIA and government accredited diamond wholesalers. Look for competitive pricing, favorable terms, and conditions such as free shipping and flexible return policies. Try and find a credible wholesaler who also runs an online jewelry store. That would be the perfect combination of both diamond variety and customer experience minus the keystone pricing (exorbitant retail prices).

Good luck!