There's a lot of speculation around diamonds in today's market -- so let's shed some light on the unknown. Between seeing the world-famous Elizabeth Taylor diamond (33.19 carats) during my internship at Christie's Auction house in New York City and working as a gemologist for Tiffany & Co. in their quality assurance department, I have learned fine quality first-hand.
My experiences were extraordinary, possibly even once in a lifetime. Through these opportunities, my eyes were opened to the world of jewellery. And because of my education and career path, I've been granted an insider's perspective on the industry.
However, what is a typical customer to do when their only source of guidance comes from a company's website or a salesperson in a store? Where does one go to get a qualified, unbiased opinion on how to buy an engagement ring?
People hoping to buy jewellery must do a vast majority of their own research and quickly teach themselves the "four Cs" (cut, colour, clarity, carat) of diamond quality to ensure that they're getting something of value. The amount of information a customer has to process can be overwhelming, and can be exacerbated by the fact that a diamond ring is a substantial financial investment.
Before we explore this alternative option, let me give you a glimpse into the diamond industry and its corresponding value chain that determines the cost of jewellery.
By minimizing the number of times your diamond changes hands, you'll be certain you're getting the best quality product that your budget can afford.
Like any consumer product, there are multiple stages in the diamond pipeline. From initial discovery and mining production, to polished stone trade among dealers and arriving at the end goal -- resting atop the finger of a delighted bride-to-be -- the value increase between each of these stages is relatively incremental until it reaches the manufacturing and retail sectors, where you see the largest markup in price.
What you should know is that according to the latest study by IDEX Magazine, the value of wholesale diamond jewellery hit approximately US$23 billion dollars. That is the revenue gained by jewellery manufacturers who sold their finished diamond product to retailers. The estimated value of diamond jewellery at the retail stage was US$78.5 billion dollars. That's more than a 300 per cent increase in revenue!
Of course, there are overhead and direct costs incurred by the retailer that must be taken into account for this massive jump. But who do you think takes the biggest hit for this markup? Most definitely you, the consumer.
Some retailers justifiably demand higher prices, if they have a long-standing reputation for fine craftsmanship and demonstrate excellent customer service. I'd certainly be willing to pay the price to know that I am, for a fact, getting something of superior quality.
Rarely do you find companies that excel in both of these areas: fine quality and excellent customer service -- without the price tags to match.
I believe that whether you're spending $5,000 or $50,000 on an engagement ring, you should still know you are investing in a top-quality diamond. According to the most recent Real Weddings Study conducted by online wedding resource The Knot, the average amount spent on an engagement ring was US$5,855.
This means that the majority of customers, the bread-and-butter of the jewellery industry, are limited in terms of where they can afford to shop. Taking us back to the discussion of an alternative channel. In order to have access to high quality jewellery at a reasonable price, you've got to cut out the middleman.
And it seems that, considering the current status of the Canadian dollar, more and more people are open to an alternative way of buying jewellery if it will help save them money. The best way to cut out the middleman is to find a trustworthy private jeweller that runs a small operation and has little overhead.
You may think that a wholesaler would be the natural option, but most will only deal with people in the trade. Start researching smaller, independent businesses that have their own collection or are willing to create something custom. This will be your best option for good quality at more reasonable prices.
Be wary of pawnshops and others that offer deals that seem too good to be true -- they usually are.
By minimizing the number of times your diamond changes hands, you'll be certain you're getting the best quality product that your budget can afford. What you'll end up with is a top quality diamond without the middleman markup.
For those in the market for fine jewellery, Bijoux By Amy provides unique industry insight and access to high end product below typical retail prices.
Amy Follwell is the director and founder of Bijoux By Amy - a personalized jewellery concierge service based in Toronto, ON, servicing clients worldwide. For more information, please contact email@example.com or visit www.bijouxbyamy.com.
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