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Thought you might be interested to know how the final price of a diamond (and other gems) is reached. You might think it all comes down to just size but there’s a lot more to it than that.
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? But when it comes to pricing diamonds things aren’t quite that simple. There are other factors to take into account before you get to a final price for a diamond.
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 stone. 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.
From this point on, 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 buy a diamond in the process, the lower the cost of the diamond will be – but not the value. The value remains the same and 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 this provides, 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 lots of diamond dealers use these as well. You must realize, however, that before you can accurately price a diamond, 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 maybe even decreases the value of the diamond as the case may be.
Again, you will be better off if you get a Diamond Grading Report, and use that information to look up the price in one of the guides the diamond cutting industry uses. This will give you the most accurate value .