Sellers Of Online Wholesale Diamonds Challenge Traditional Jewelry Retailers
Inside the United States, wholesale diamonds have been sold in the mainly inside the New York and Los Angeles jewelry districts. Diamonds would trickle down for the consumer who would normally go buy a diamond in a nearby mall. But that was then and this is now. The diamond business has rapidly evolved since the dot com era first began in the late 90′s.
It wasn’t too long ago that diamond wholesalers would import rough and polished diamonds from overseas from places like Antwerp, Israel and Africa. They would then sell those diamonds to wholesalers in New York and Los Angeles, and those wholesalers would then sell to other smaller regional wholesalers in major cities all more than the US. Retailers would borrow these diamonds on “memo” to show their clients and would fill their showcases with diamonds from other dealers they frequently did company with. A trust was built among the retailer and also the neighborhood wholesaler.
And so began the chain of sellers that any specific diamond would become property to. From the time a diamond is discovered in the ground, to when it’s purchased by a young lad looking to propose, it has changed hands at least eight times. These middlemen included the cutter, polisher, the lab the diamond is sent to grading for, a number of wholesalers and other traders, previous to it lastly gets towards the jewelry retailer and for the end purchaser.
Then you’ve the unscrupulous diamond dealers that would acquire honestly graded diamonds and send them to several labs in hopes of acquiring much better diamond grades. With some wholesalers who had much more influence with certain labs, obtaining the increased grades wasn’t all that difficult. After all they gave these lesser tier labs like EGL and IGI plenty of business, and if they graded their diamonds harshly, they would simply take their business elsewhere. Thus the much more generous grading would yield an additional color or clarity grade higher, instantly giving them a 10-20% profit on their diamond. Everyone within the diamond trade is properly aware of this practice, which is why EGL and IGI graded diamonds, among others, aren’t really well regarded in the business. The GIA laboratory is the undisputed authority on diamond grading and when a grade was ever in question, it often ended with what GIA graded the diamond as. That didn’t stop diamond dealers who prey on much less educated consumers, and so the game continues on, even till this day.
Then web came along and changed the game forever. Consumers could now go on the web, search thousands of diamonds in the shape, size and specifications they were searching for, sort by cost and basically purchase the cheapest. And if they weren’t comfortable with shopping online, all they had to do was print out that list and shop around at their neighborhood malls. The mall retailers needless to say would try to promote their IGI or EGL graded diamond for a similar price tag as the on the web seller’s GIA graded diamond at initial, but that game didn’t last lengthy either. Customers have turn out to be a lot more aware that GIA could be the business standard and no other lab comes close to their reliability and prestige.
What then proceeded to happen, was the unthinkable for diamond dealers. Diamonds began getting sold on the internet as commodities, very easily comparable with a a lot much better disclosure, and this of course ate into their profits considerably. Several jewelers have been forced to shut down, since their business relied on selling much less then accurately graded diamonds to people walking in their doors. Then obviously there were all the middle guys within the diamond trade who have been squeezed out at the same time. Retailers had been forced to compete on top quality and price, and required to search for the greatest sources with out relying on favorable terms from local wholesalers. Diamond wholesalers in Los Angeles and NY started getting directly from the cutters themselves. Exactly where will the diamond market be in ten or twenty years from now? We do not know. But we do know that doing business hoping your buyers are going to be ignorant isn’t a sound enterprise model. Luxe Wholesale Diamonds, on the other hand, strives to broker the really best top quality diamonds to our clients at very competitive prices. We believe the brokerage model and getting honest with our clients is where the diamond trade will ultimately end up in, and we are very excited to become a part of this rapidly evolving market.
Luxe is a wholesale diamonds seller based in downtown LA that ships diamonds all over the world. Be sure to also check out our Los Angeles diamonds blog as well.