How the Price of a Diamond is Determined



Pricing many products for sale is generally quite easy. It goes something like this:

Determine the costs of manufacturing, then the costs involved to market that item, and then mark it up by 15 – 30% or whatever the market can sustain.
Simple, right? Well, pricing diamonds isn’t nearly that simple. Not at all. This is because there are so many additional factors that come into play when diamonds are priced.

Diamond prices are determined first by adding the cost of the rough diamond, the cost of cutting the diamond, and all other costs necessary to turn the rough diamond into a something suitable for use in jewelry. Depending on the importance of the diamond, an independent company may be called in to certify the grade of the diamond based on color, cut, clarity, and weight.

As every stage involves professionals who are paid for their work the diamond becomes more expensive each time it changes hands. When it finally reaches a retailer the price will as expected be raised still more. Before reaching the retailer, however, the diamond must travel from the mine, to the cutter and polisher, to the independent grading company, and then to the primary market. Once it has reached the primary market, it will be purchased by diamond dealers and wholesalers, and from there it will be sold to retailers.

As you can see, the earlier you can purchase a diamond in the process, the lower the cost of the diamond will be – but not the value. The value is based on what the diamond will sell for in the market place – through a retailer.

If you own a diamond, and you have no idea how much it is worth, you can have it appraised. Just be aware that the appraisal may not be accurate. You will be better off obtaining a certificate through GIA – Gemological Institute of America. With the information on this certificate, you can use a cutter’s guide to accurately determine what your diamond is worth.

There are also many diamond price calculators available. These can be found on the Internet, and many diamond dealers use these as well. You must realize, however, that before you can accurately price a diamond, without a Diamond Grade Report, you need to know quite a bit about diamonds, such as different cuts, clarity, color, and weight and how each of those aspects adds to the value of a diamond, or decreases the value of the diamond as the case may be. 

Again, you will be better off if you get a Diamond Grading Report on the diamond, and use that information to look up the price in one of the guides that the diamond cutting industry uses. This will give you the most accurate value of the diamond in your possession, or of the diamond you are considering purchasing. 

Comments

  1. Unknown21 March 2013 at 06:49

    Great post. I was looking up diamond price appreciation when I came across your post. I had no idea how much actually goes into diamond pricing. Thanks for sharing this great information.

    ReplyDelete

Post a Comment

Popular posts from this blog

Tips On Buying Diamond Studs (Earrings)

A pair of diamond earrings (studs) is something that is an essential part of anyone's wardrobe.  They can be worn at any special occasion. They are even great for everyday use. Classic yet striking, always versatile. What could be more perfect. They are appropriate both for every day and for a special occasion. That sparkle will add to even an understated of outfits or balance out that fancy dress. People do a lot less research when buying diamond studs. They are seldom researched to the extent that a diamond engagement ring might be. But there are still some important considerations that are worth bearing in mind. When it comes to buying any diamond it pays to know what's what. Ensure that you are getting precisely what you expect Always buy certified diamonds. This will give you the assurance of expert evaluation. The basic criteria apply here. The most important of the 4 Cs is diamond cut. Just a remi
Read more

The "Sparkliest" Diamond Shape

Image
What shape diamond are you going to get for the engagement ring? Round? Square? Oval? Pear? Heart? They're all so nice! It can be difficult to choose. You could be after a shape that is popular or maybe you want to try something a little different. Some diamond cutters have created their own improvements and sell these diamonds directly. This is called a Signature Cut. The way these diamonds look are pretty impressive and very dazzling. Diamonds are already quite hypnotic, but signature cuts particularly super ideal cut diamonds are just unbelievable.   If you look at the statistics on a site like mega diamond seller Blue Nile you'll see that most people end up choosing round diamonds. The reason that round shaped diamonds, (technically called round brilliants ) are such good sellers is because they are known to be designed in such a clever way that a larger proportion of light bounces back through the top of the diamond giving it a superior sparkle. Becau
Read more

Lab Grown Diamonds

Image
Lab grown diamonds have been called by many names: sometimes synthetic diamonds, man made diamonds, artificial diamonds, manufactured diamonds, foundry diamonds and even cultured diamonds. All have been used. In July this year (2018) the Federal Trade Commission ruled that the terms lab grown diamonds, man made diamonds, and foundry diamonds are ones to be used to qualify the term cultured diamond. While the term synthetic should not be used when talking about lab grown diamonds, specifically when marketing lab grown diamonds. Up until this point the Gemological Institute of America has been using the term synthetics when referring to lab grown diamonds, so I guess we'll see what happens. But I'm guessing they will not have much choice but have to update their synthetic diamond grading terminology. The FTC also ruled that cultured diamond should not be used on its own when referring to lab grown diamonds as the term does not distinguish itself sufficiently from mined diam
Read more