How Diamond Prices Are Determined
Pricing most products is quite easy. Determine how much it costs to make the item, how much it costs to market that item, and then mark it up by 15 – 30% or more. Simple, right? Well, pricing diamonds isn’t quite that simple. There are many factors that are considered 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 marketable diamond. 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.
At this point, the diamond becomes more expensive each time it changes hands, until it finally reaches a retailer, where the price is raised a bit 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, but 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.
How to Buy Diamond Engagement Rings
There is much to consider when purchasing a diamond – especially diamond engagement rings! The tradition of presenting a woman with a diamond engagement ring when proposing began in 1477 when Archduke Maximilian presented a diamond ring to Mary of Burgundy – and in most cases, the woman you plan to propose to will expect a ring to accompany that proposal!
First off, determine how much ring you can afford. Most people use the ‘two months salary’ rule. This means that the ring should cost the equivalent of two months of your current salary. Because you have other bills to pay, saving up this amount of money may take quite a bit of time. You should consider financing. Simply go to the jeweler of your choice and tell them that you plan to buy an engagement ring, and that financing will be necessary. Go ahead and get the credit check out of the way, find out what your payments will be, and how much of a down payment is required.
Now, have your mother, sister, or your girlfriends best friend take your girlfriend shopping, and make sure that they gaze at the engagement rings to get an idea of what she might like. Make sure that the jewelry store you buy the ring from will allow you to return the ring, if that is required, or allow your girlfriend to exchange it for another if she isn’t happy with it!
How Diamonds Are Cut
In their most natural form, diamonds are – well – quite ugly. They have no luster or shine, and in fact, look like nothing more than broken glass. A diamond must be cut, and then polished before it actually becomes a thing of beauty.
Diamonds are cut with saws, into round shapes. From the rounded shape, other shapes may be cut, such as heart shapes – but the shape is less important than the quality of the cutting that is being done. If the diamond is poorly cut, it will lose light, and it will not sparkle and shine very well. Each facet of the diamond must be carefully cut into the geometrical shapes that allow the diamond to sparkle and shine, then the entire diamond is cut into a specific shape, such as an emerald cut or a princess cut diamond.
Once the cut is done, the diamond is put into a dop, which resembles a cup with another diamond – only a diamond is strong enough to smooth the edges of another diamond. Once the diamond has been cut and shaped, and had the edges smoothed in the dop, it is polished on a scaif or a diamond polishing wheel.