Wholesale Diamonds And The Rapidly Evolving Diamond Industry
Traditionally, all wholesale diamonds originating inside the United states have come from two major jewelry districts; that of New York and Los Angeles. Diamonds would flow through these key jewelry hubs and wind up in malls all across America in which they’d be snatched up by consumers hoping to capture some of that diamond sparkle for their loved ones. But times have changed drastically within the jewelry industry, and also the changes have come about mostly all due to the dot com era.
Just before the internet came about, a diamond wholesaler needed to import both polished diamonds, and rough diamonds from other parts of the world for example Israel or South Africa. These diamonds would then arrive inside the hands from the bigger wholesalers dependent out of LA and NY, who would then sell to smaller regional wholesalers. So if your save was based in Chicago or Detroit or just about any city in America, there was a wholesaler you could rely on to have diamonds in stock. The retailers relied on these smaller wholesalers to give them diamonds on “memo”, or rather on consignment, so that when the diamond was sold the wholesaler would get paid. A enterprise partnership was built between the retailer and the regional wholesaler and everybody was happy to become making a profit. There was no will need to get diamonds from a larger diamond wholesaler because the retailer needed to have that diamond in their showcase on consignment with out putting forth any money, where as the largest wholesalers and diamond importers had much stricter policies on payment.
And so began the chain of sellers that any specific diamond would become property to. From the time a diamond is discovered from the ground, to when it’s purchased by a young lad searching to propose, it has altered 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, prior to it lastly gets towards the jewelry shop and towards the end consumer.
It wasn’t even uncommon for diamonds to be graded by a number of labs, being passed from a single to one more in hopes of obtaining the greatest grade. Diamonds would be bought by a single diamond wholesaler that had much more influence with a specific lab and would get a higher color or clarity grade, thus would instantly get 10-20% more profit on their investment. Everybody within the business knew EGL certified diamonds have been not up to par with GIA graded diamonds with exactly the same apparent color and clarity. That didn’t stop diamond dealers, nevertheless, from exploiting the public with massive profits involved. It was a shady game that over the years the consumer had little selection but to participate in.
Then world wide web came along and changed the game forever. Customers could now go online, search thousands of diamonds inside the shape, size and specifications they have been looking for, sort by price tag and simply buy the cheapest. And if they weren’t comfortable with shopping on the internet, all they had to do was print out that list and shop around at their nearby malls. The mall retailers obviously would try to promote their IGI or EGL graded diamond for a similar price as the online seller’s GIA graded diamond at first, but that game didn’t last lengthy either. Consumers have turn out to be much more aware that GIA is 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 started getting sold on the internet as commodities, effortlessly comparable with a much far better disclosure, and this obviously ate into their profits considerably. Several jewelers have been forced to shut down, simply because their company relied on selling less then accurately graded diamonds to individuals walking in their doors. Then of course there were all the middle men in the diamond trade who had been squeezed out at the same time. Merchants have been forced to compete on high quality and cost, and needed 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 don’t know. But we do know that performing enterprise hoping your clients are going to become ignorant is not a sound enterprise model. Luxe Wholesale Diamonds, on the other hand, strives to broker the extremely finest high quality diamonds to our clients at extremely competitive costs. We believe the brokerage model and getting honest with our buyers is where the diamond trade will ultimately end up in, and we are very excited to be a part of this rapidly evolving business.
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.
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