PRIVATE DIAMONDS 4 SALE

Shape: Round
Carat: 1.54Ct
Cert.: AGS
Asking: $ 10000 (QLD)
Shape: Princess
Carat: 1.34Ct
Cert.: LPC*
Asking: $ 7000 (VIC)
Shape: Round
Carat: 0.83Ct
Cert.: DCLA
Asking: $ 3000 (QLD)
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Comparing Diamonds

 

Advanced diamond education which compares the difference between discounted internet diamonds and the ones available in store at reputable jewellers. Note: This is general information and should not be used to evaluate every situation.

 

Rough Diamonds

The life of a diamond starts in the ground. It’s mined, sorted and then sold worldwide, with the majority (around 75%) by De Beers to DTC sight holders.

These sight holders are usually larger diamond cutting factories or rough diamond wholesalers. These diamonds, being traded legitimately are also conflict free. The remaining 25% of diamonds traded outside of De Beers consists of independent diamond mines, where some diamonds are considered conflict (or blood diamonds) and others are non conflict but are being sold by legitimate miners, mainly directly to the larger diamond cutters.

Before the rough is transformed into a polished diamond it is assessed by the cutter to determine how to get the most out of the rough, but they also put into account the market demand, so they may not necessarily cut for maximum size if what they are cutting has a poor appeal in the current market.

After the diamonds have been cut in the factory they are transported securily to the manufacturer’s own diamond trading office (which is usually in the “Diamond Exchange” centre, if they are a member), with main exchanges located in Belgium, Israel and Mumbai.

Before I go any further. Please do not confuse the actual real Diamond Exchange to businesses calling themselves a “Diamond Exchange”. The real Diamond Exchange is a large building or a group of buildings with hundreds of diamond manufacturers, wholesalers and brokers. It’s an international diamond trading centre with ethical and strict rules in place which it’s members must follow.


The Diamond Grading Process

Most of the diamond manufacturers have at their factory or in their office gemmologist(s) / diamond grader(s). Their role is to assess small and melee size diamonds and thoroughly grade the larger diamonds.

The amount of effort in looking at each diamond is determined on it’s value. They cannot spend half an hour grading a small average quality diamond but they can on a larger higher quality diamond. It’s like everything, where economics also plays a part. Not all diamonds are sold with certificates, however the larger diamonds (usually 0.30ct and up, but not always) are given a stock code and a value, which is assessed based on the following factors: the grade, the cost of the diamond rough and the cutting labour to produce the finished diamond (AKA: Loose Polished Diamond.)

In nearly every case the more expensive diamonds, based on the factors above look better, because more expensive rough = more skilled, more expensive cutters dedicated to cut these diamonds and less expensive rough = less skilled, less expensive cutters dedicated to cut these diamonds. This is regardless of the diamond’s grade, as rough diamonds are graded under a different system to polished diamonds.

So two polished diamonds of the same finished specifications can each come from two different grades of rough and finishing standard, yet still be graded as (for example) Round, 1ct, G, VS2, Ex / Ex / Ex by the same independent grading laboratory.

However the gemmologist that works for the diamond manufacturer (AKA: an Internal Gemmologist) will know which diamond is actually worth more and it’s dedicated market price is applied to the diamond before the diamond is sent to be independently graded and certified. They keep a good record of it by giving the diamond it’s unique stock code.

So for example: There are two polished diamonds of very similar specifications.

Diamond A is from the more expensive rough and Diamond B is from the less expensive rough. The internal gemmologist gave each of these diamonds the same grade, as follows: Shape: Round, Carat weight: 1.01ct, Colour: F, Clarity: VS2, Cut grade (Proportion) VG / Symmetry: VG / Polish: VG, Fluorescence: Nil.

Diamond A came from a more expensive rough material and cutting labour so it was priced higher and Diamond B came from a less expensive rough material and cutting labour so it was priced less, by $500.00.

Both of these diamonds are then sent to the independent grading laboratory, such as (for example): “GIA.”

After a few or several weeks the diamonds return back to the manufacturer’s office with their certificates. The laboratory could have given both diamonds an exact matching grade to the internal gemmologist’s opinion but this is what commonly happens:

The independent grading laboratory gave both diamonds a different grade, as follows:

Diamond A (the more expensive diamond) came back as a GIA - Shape: Round, Carat weight: 1.01ct, Colour: F, Clarity: VS2, Cut grade (Proportion): VG / Symmetry: VG / Polish: VG, Fluorescence: Nil. So it’s unchanged because that’s what it really is or the GIA gemmologist that graded it was as strict as the internal gemmologist.

Diamond B (the less expensive diamond) came back as a GIA - 1.01ct, Shape: Round, Colour: E, Clarity: VS1, Cut grade (Proportion): EX / Symmetry: EX / Polish: EX, Fluorescence: Nil. This difference is because that’s what it really is or the GIA gemmologist that graded it was not as strict.

So Diamond A (the more expensive diamond) ended up with the expected grade in the certificate but Diamond B (the less expensive diamond) ended up with an inflated grade (see details above underlined in bold.)

How did this happen?

Answer: Both the diamonds were borderline on a positive for colour, clarity and cut quality so a more stricter gemmologist graded Diamond A, therefore it didn’t improve in grade (as shown in the certificate) but Diamond B was graded by less strict gemmologist/s and went up in the colour, clarity and cut (which is allowed) since it was a borderline case. This is normal to happen as GIA, like the other major independent diamond grading laboratories each have hundreds of employed gemmologists that work for them - that may be divided between different locations / countries. This means that consistency is not always 100% accurate, but they are usually very close with any difference usually being within a borderline - hence the diamonds did come back with different details but they are still very close.

Now - this is the reason why internet diamond bargains are not always like they seem.

The reality is that Diamond A is a better diamond because it’s nicer, based on the reasons mentioned above however in the certificate it looks as a less valuable diamond since it’s colour, clarity and cut grade is lower than that of Diamond B.

In most situations the diamond manufacturer will not discount Diamond A and will not increase the price of Diamond B either. They will sell them as they initially priced them, as the reality is that they paid more for Diamond A and less for Diamond B.

Remember - Diamond A refers to: “more expensive rough = more skilled, more expensive cutters dedicated to cut these diamonds” and Diamond B refers to: “less expensive rough = less skilled, less expensive cutters dedicated to cut these diamonds.”

How can that be possible?

It’s logical. Say you had an elite professional football team. Every player was carefully selected and deserved to be in that side, but not all the players are the same. Some are still better than others. Diamond B is like some of the players but Diamond A is like their star players. So all the players deserve to be in this elite team as they are all the same grade, but it doesn’t mean that they are all the same players. So like football players - two diamonds with the same grade doesn’t mean that they are actually the same.

Diamond A will not be a competitively priced diamond for sale by a discount online dealer because people looking online need to see the best grade for the price, but Diamond B will be perfect to be sold online as it appears to be worth about $1000 more (based on grade difference) but it actually cost the manufacturer $500 less to produce. It automatically has a $1500 advantage over Diamond A and gets more attention through online advertising, but it’s really just an advantage on paper since Diamond A is a nicer diamond in reality.

Both of these diamonds will be sold, targeting two different markets. The more expensive (Diamond A) will be more suitable to be sold directly to a good jeweller or to a reputable wholesale diamond merchant that will re-sell it to a jeweller. This diamond will sell itself by being physically seen first. The less expensive Diamond B will be more suitable to be advertised and sold online via a discount internet diamond dealer. Of course it can also be sold from a shop-front but for a quick sale it’s a lot more appealing to sell it based on it’s certificate before it’s own merit.

Remember: Both of these diamonds are beautiful (as most diamonds are) but one is nicer than the other physically and the other is nicer on paper. There is no rule on what a customer should do as both of the diamonds deserve to be sold and will end up with happy owners, but the important fact is that consumers are educated to know that the grade that’s shown in the certificate is only part of the story. The cliché “you get what you pay for” still does play a part when buying diamonds. Of course it’s still possible to pay less for a nicer diamond because some businesses are prepared to make a lower profit than others, but as a general rule don’t expect the nicest diamond when it’s the cheapest.

 

Copyright 2010. Author: M K