Diamond Jewelry Pricing: Retail versus Wholesale

Diamond Jewelry Pricing: Retail versus Wholesale

Being wary of jewelers is second nature to humans, and almost all of us have a story about how someone we know was overcharged for a piece of jewelry. At other times, it is we ourselves who have been outwitted and made to part with a large chunk of our savings. This makes the talk about how diamonds are priced in this industry very important to consumers and their pocket books.  By the end of this discussion, we will also know which sector is more suited to a customer looking to resell their jewelry in future: retail, or wholesale?


Do Discounts Provide a Good Bargain?

Whenever you’re out looking for an anniversary present or engagement ring you always wonder if this is a good price. But when you look at some of the discounts offered at retail stores, you also wonder if they are deliberately driving toward bankruptcy. There’s always that confusing sale price which is difficult to understand because it seems to not make sense mathematically.

The general idea is that jewelry is marked up by 100%, 200%, 300% – actually the sky could well be the limit. The discounts offered are levied on a price that is well above the stone’s wholesale value. Without a discount, the difference between the price tags at retail outlets and wholesale stores is massive. 


A Quick Comparison

For comparison, consider a diamond with the following characteristics: shape- round brilliant cut, weight- 1.10 carat, color- H, clarity- SI1, certificate- GIA, cut grade- excellent. Diamonds fitting these specifications were searched on three different websites – two were retail sellers, and the third, wholesale.

Retailer #1 showed the average price of the stone to be about USD8,100 to USD10,150. Retailer #2 showed the average price for the same diamond specifications to be from USD7,700 dollars up to USD10,000. Much to the contrary, the wholesaler sold the same at USD4,500 to USD5,000. On average the difference seen is 50%.

To ensure an apples-to-apples comparison, it is crucial to keep the certification common to every case while making the evaluation because different certificates have different grading scales.   

Can diamond jewelry be sold at lower prices and still be profitable to the seller?
Consider that the normal difference in markup between retail and wholesale is approximately hundred percent. A jeweler, however, sells the jewelry at a price that earns the seller five or six percent, but he makes hundreds of sales. This formula is more profitable than waiting for one or two sales a week with alleged discounts that mislead the customer about the true value of the stone.


Buy Wholesale to Resell Later

Bottomline is, if the brand name is not that big of a concern, top quality diamond jewelry can be procured at a lower price if you keep the following terms in mind – cut, color, clarity, carat, and certification. Often, the markup on a piece of jewelry is decided by the name of the designer or company who sells it. This addition of value is of no use if your intention is to resell the item, because the worth of your possession will ultimately be decided by the jewelry’s weight, precious metal content, diamond content, and the worth of the labor that went into crafting it.

Besides the cost of the centrestone itself, high-end brands put a 20% to 30% markup on the setting of the diamond, and allot several other extra charges that goes into making the finished product. The final price of the jewelry ends up 60% to 70% more than the base price. However, the price hike does not end there because in some cases, designer brands skyrocket the selling price backed by simply the clout behind the name of the company.  


Diamond consortiums help client’s make smart choices according to their requirements

Diamond consortiums such as Diamante provide a unified market for diamond buyers and sellers across sectors. It facilitates networking, browsing the market, assessing ongoing price rates, and compare demand and supply of gems. Transactions can be carried out directly as well between members on its blockchain platform. The blockchain technology itself has provided unparalleled reliability, transparency, and accountability to the business of buying and selling diamonds, which has made making thoughtful decisions on investing in diamonds less risky.

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