I think it's about time I put up a post to address the major discrepancy between the prices for loose diamonds in the jewelry stores vs. the On-line diamond websites.
We get customers all the time who start their engagement ring search at a local jeweler. They get prices on a few diamonds of interest..and then they go home and do some research Online.
They do a Google search for diamonds and jewelry and find our website as well as other Internet diamond dealers.
Lo and behold, they notice that diamonds on the Internet of similar size, color, clarity, quality, grading reports, are being sold at a fraction of the asking price of the retail jewelry stores.
At first glance it seems impossible, since these price differences are often to the tune of thousands of dollars!
However, subsequent research shows that the diamonds advertised on the net are similar, if not completely identical to the ones they saw at their local jeweler!!
Now here is where doubt begins to creep in.....
Many customers begin to wonder, "what is the catch"??
How could the diamonds be so much cheaper on the Internet??
This is what I call the "sounds too good to be true, syndrome".
There is often an assumption made that if something sounds "too cheap" in relation to comparable merchandise being sold elsewhere, then there has to be a catch, since obviously, nobody is inclined to give away something for nothing and assuredly, everyone is making a profit.
If that is true, then by extension, people start doubting the quality of the diamonds being sold on the net. They call and ask "whether there is something wrong with the diamonds".
Now, while there is a certain truth to the "sounds too good to be true syndrome", the reality is that where it concerns prices on the internet (for any merchandise) vs. prices for the same stuff in the stores, the discrepancy has nothing to do with any qualitative difference.
The difference lies in the completely different business model that exists between traditional "brick & mortar" jewelry stores vs. Internet retailers.....and this difference actually exists in every conceivable market.
The answer is; obviously there is nothing "wrong" with the diamonds being sold on the Internet.
In fact, these diamonds are often of much higher quality and beauty, with better certification and a wealth of information, as opposed to the frozen spit that passes for diamonds in many of the mall (maul) store jewelry chains.
What I always say, is welcome to the world of the Internet!
Consumers on the Internet are often much more knowledgeable and savvy than typical mall store shoppers. They do not buy diamonds without a wealth of information and proof to back up the sales pitch rhetoric.
The traditional brick and mortar jewelry stores must survive (and will sometimes thrive..) with a completely different business model.
They have huge overhead, in terms of sales staff, rent roll, utilities, stock inventory, mortgage, etc.
Somebody has to pay for these astronomical bills...YOU DO!
The jewelry stores have huge markups on the loose diamonds they sell. They literally make a fortune in profit on every single diamond they sell. They would rather sell fewer diamonds at huge inflated premiums, than many diamonds at razor thin margins.
They would not survive if they had to put in all of the effort into closing a sale on a diamond with a small markup/profit margin.
Conversely, on the Internet where we survive, the business model is entirely different.
The nature of the Internet is that it is much more competitive than in the stores. There is no such thing as an Internet dealer or vendor having his own "turf" or being the "only game in town".
Every diamond dealer on the net is competing for the same market share, since everyone is located just a "click away" from the consumer.
Therefore, when a customer does an Online search for "loose diamonds" or "engagement rings" they will typically canvass the results that come up for the first few pages.
They will call/e-mail these diamond websites and compare variables like quality, reputation, value, service, and price.
Whoever provides the customer with the best combination of all of these variables, is the one who will earn the consumers trust and business.
We Internet diamond dealers, know this; we recognize that the competition is fierce.
We also realize that we may not have nearly the same amount of overhead as the huge jewelry store located in an upscale neighborhood, with all of its expenses.
We therefore have the luxury, but more importantly the mandate to bring our actual profit margins for loose diamonds all the way down until they are razor thin.
It's not that we don't wish we could command the same incredible profits as the jewelry stores on every loose diamond we sell. Rather, we could not do this and survive as a viable and profitable company.
The savvy Internet diamond shopper would simply click to the next website and buy the same diamond from the next guy for much less money!
Therefore, the quality/value of the diamonds is certainly the same, if not better than what is being sold in the stores.
In fact, some Internet dealers including our company, earn the customers trust by providing them with a plethora of scientific data and information on every single diamond. This is information that we supply up front to the consumer; stuff they would never get at the local jeweler.
The reason the diamonds on the net are sold for so much less than in the stores, is entirely due to the completely different business model which exists between stores and websites.
Internet diamond dealers work on razor thin profit margins, often to the tune of a few percentage points (something which is considered sacrilege in the retail jewelry stores), and rely on moving a lot of diamond inventory.
Internet diamond shoppers: find a reputable vendor and buy in confidence!!
Here is a You Tube video I put up some time ago on this topic:
