Many jewelry stores advertise that they purchase their diamonds direct from the source. They may discuss their annual buying trips overseas to Antwerp or Israel where their purchasers hand select diamonds directly from the mines to obtain the lowest prices possible–thus passing along savings directly to their customers. Is there really a way to buy diamonds direct? What goes on behind the scenes in the diamond industry’s buying and selling methods? Our experts answer your questions in today’s post.
Do Jewelers Really Buy Their Diamonds Direct?
While many jewelers go on a yearly trip overseas to look at diamonds, unless they are part of a buying team in a large company, chances are they may only buy a few diamonds on their trip. It is a tax write-off and good public relations and advertising for their store, even if they only buy one diamond during their overseas trip. Jewelers can then tell their customers they purchase diamonds directly each year from the source. Technically this is true but more of a half-truth. The reality is that the vast majority of jewelers will make daily calls to their wholesaler and get certain diamonds “on memo” (on loan or consignment) or have the most popular options already in their inventory. Only the very largest jewelry companies in the world can buy their diamonds direct.
Is It Possible To Cut Out The Middleman and Buy Diamonds Directly From the Diamond Mines?
The simple answer is no. Most jewelers will be unable to buy direct from the diamond mines, since there are many other steps in the buying process. Each diamond that comes from a mine needs to be cut, polished, graded through a lab such as AIG or GIA, certified, and so forth. There are many middlemen in the diamond industry and it is impossible to skip a few of them as they all provide essential services each step of the way. The only true players in the diamond industry who can buy diamonds direct are companies such as De Beers and Tiffany & Co. They do millions of dollars in sales and hold stakes in various diamond mines, and have their own diamond cutters. Not many jewelry stores are able to do this, and therefore none (other than the aforementioned companies) are unable to truthfully say that they buy their “diamonds direct.”
What Should Consumers Believe About Diamonds Direct?
Just as with all clever marketing, many stores will advertise that they sell the “world’s best shoes” or “award-winning hot dogs” while other stores base their slogans and names the catch phrase “factory direct”, “diamonds direct”, “jewelry direct”. These phrases provide a false sense of security for consumers, even though it can make some feel better about their purchase and believe they got a good deal or the very best product. While there may be some savings involved in these items, it usually never applies to diamonds and jewelry. The prices are based on the annual Rapaport Diamond Report and all jewelers are subject to industry pricing and variables.
The Importance of Grading and Diamonds Direct
One of the biggest concerns that face consumers looking for diamond deals is that the lower priced stones may not have a grading certificate. Generally speaking, if a diamond does not have a grading report it will be over-graded and over-priced (or obtained in potentially shady circumstances). Every consumer should insist upon a grading certificate. If the jewelry store or individual selling the diamond is hesitant or refuses, do not do business with them as they will likely have been obtained through illegitimate channels. Conflict or blood diamonds fall into this category.
The Bottom Line With Diamonds Direct
- Beware of stores claiming they purchase their diamonds direct from a mine. Only a handful of companies are able to do this, and they are by far the largest and most successful ones (i.e. Tiffany & Co., De Beers).
- Never purchase a diamond without a grading certificate.
- Stores may have the words “Diamonds Direct” in their company name, but that is more likely a clever marketing ploy. The exception is the Charlotte, Birmingham and Raleigh Diamonds Direct stores, which boast millions of dollars in sales each year and 30-40% in savings. For more information, click here and here.
- Only buy a diamond that the jeweler will allow to be independently graded (never graded in-house). Only buy it if it comes back independently graded equally to the carat weight, color and clarity grade as claimed by the jeweler.
- Jewelers who go overseas and buy from the major cutting areas in Antwerp or Israel buy only a few diamonds in order to still be able to make the claim that they buy their diamonds “direct” … when they may be using it as an excuse to take a vacation as a tax write-off.