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 explains how diamonds are priced in this industry very important to consumers and their pocketbooks.  By the end of this discussion, we will also know which sector is more suited to a customer looking to resell their jewelry in the 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 does 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, 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 evaluating 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 a hundred percent. However, a jeweler 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 stone’s true value.

Buy Wholesale to Resell Later

The bottom line 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 you intend to resell the item because your possession’s worth 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 center stone’s cost, high-end brands put a 20% to 30% markup on the diamond setting and allot several other extra charges that go 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 clients 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 the 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 buying and selling diamonds, which has made thoughtful decisions on investing in diamonds less risky.

Source: Original