Learn the secrets
What follows below is a step-by-step guide that will reveal the inner-workings of the diamond industry and offer you an opportunity to obtain the hidden knowledge needed to purchase a fine quality diamond at truly wholesale prices. We say “step-by-step” because we understand that most consumers will not complete all of the steps needed to intelligently purchase a diamond. However, we strongly encourage you to so. If you haven’t finished all of the steps, by no means are you ready to invest in a diamond. After all, diamonds are extremely expensive and minute differences in a diamond’s characteristics can translate into a fortune in price. By dividing this essay into steps, one will be able to determine how much knowledge they have obtained within the full spectrum and determine for oneself if they are comfortable with this. Either way, all of the necessary information is presented here for your review. Of course, this essay is a course whose impetus originated with Charlie Bakash the founder of our company, whose loving dealings with his customers brought fourth this essay. And now you too have the opportunity to be touched by Charlie—A legend in his own right.
Background
Charlie Bakhash never intended on selling his diamonds to the public. Rather, his reputation as an expert in the jewelry trade was purely amongst the buyers of upscale stores throughout America. Somehow, his office in the diamond and jewelry district in Manhattan gradually became public knowledge—and so the public began to show up unannounced. Charlie has always believed in being straight and true with his customers and finds a certain joy in making people happy, so he offered his diamonds to consumers at the same prices he sold them to stores.
Charlie also understood that much of a diamond’s value is secretly hidden in the proportions of the stone; a science understood only by a select few. This secret is seldom revealed by sellers to prospective buyers as it empowers consumers shopping for diamonds. As an honest businessman, Charlie recognized this and made it his mission in life to educate his customers. This way, he could arm his customers with the necessary knowledge needed to purchase the finest quality diamonds at truly wholesale prices—a wise strategy in the purchase of any precious jewelry. This is how our story unfolds and how our company sells the finest quality diamonds in the world to consumers at prices well below what other jewelers are willing to sell them to you for. In fact, if you purchase a diamond with our company, you would pay the same price a jewelry store would pay before markup.
It is Charlie’s sons, Joseph and Edward, both GIA (Gemological Institute of America) trained diamond graders, who continue this tradition under the guidance of their father. Today, A merican Diamond is a member of the New York Diamond Dealer’s Club, the world’s leading market maker for polished diamonds in the world. In fact, our company has two offices on Fifth Avenue in New York’s Diamond District—directly across the street from THE DIAMOND DEALERS CLUB— where our company’s staff is constantly procuring the finest diamonds available. As a result, we have direct access to the world’s finest selection of newly cut diamonds. Through our website, americandiamondshop.com, we bring these finely cut polished diamonds to discerning consumers at truly wholesale prices. If you compare our company prices to other sellers of loose diamonds, you will quickly discern that our prices are well below what any other seller is willing to offer to you.
Please be our guest and read on as we show you why diamonds are valuable, why people buy diamonds, how they are valued in the trade and how to make an informed purchase.
Understand why Diamonds are Valuable?
Throughout history, diamonds have shown themselves in practically every civilization and culture imaginable. From ancient Egypt to Mesopotamia, the unmistakable presence of diamonds is difficult to deny. In these early days, where much upon the earth was still undiscovered, the sheer beauty, brilliance and awe of the first diamond ever discovered, surely differentiated itself from anything else.
Perhaps it was the diamond's beauty that first enamored these ancient people? Or could it be the diamonds' indestructibility that caused people who owned them to associate similar feelings about themselves. Of course, with this beauty came an increased demand for something that was still unknown. In fact, the harder the ancients tried to find diamonds, the more difficult it was to find them. Within this first cycle of discovery, awe and the need to have more, the ancients unknowingly created a process that would give birth to the most valuable gem in the world-Diamonds. This is how diamonds have became a part of our lives.
Why Quality Always Comes First
As you read on, you may ask yourself why our company repeatedly writes “the finest quality diamonds at wholesale prices”. It so happens to be that this is our company mantra or sacred formula that Charlie has always passed on to our many loyal customers. You are always encouraged to purchase the finest quality diamonds in your price range. There are many reasons for this: (1) finer quality diamonds are the most beautiful, (2) finer quality diamonds are the most durable and (3) finer quality diamonds have the best chance of improving in value over time. When you make a purchase that subscribes to these three factors, you have protected your investment.
Here is our thinking. If one were to examine why diamonds have shown themselves throughout history, it is because of their inherent beauty. Beauty is the paramount reason why people purchase diamonds and why people are enamored with them in the first place. The more beauty you can purchase, the more likely your diamonds will be valued and enjoyed. Beauty is the reason why diamonds are what they are. If people did not think diamonds were beautiful, they would be worthless. Beautiful diamonds are also sought after. Consumers are always looking for finer quality diamonds and through this process increase the demand for them. Therefore, purchasing the finest quality diamonds in your price range is always the wisest choice. Later, we will reveal the nuances within diamond quality that contribute to beauty. However, for now, it is important to understand that quality is paramount in the hunt for a diamond.
Understand why Diamonds are an Artificial Commodity
Each year millions of consumers walk into jewelry stores and purchase diamonds for a loved one. Little do they know that the 1 carat diamond they just purchased cost the diamond miner only $15 per carat to extract, whereas they just paid $12,500 for this same stone. In addition, for every diamond that is showcased in a jewelry store, there are a plethora of equivalent diamonds held in storage by the same diamond miners who are responsible for bringing these same diamonds to market.
In other words, there is a great surplus of fine quality diamonds in the marketplace. As such, the value of a diamond is truly a created market as its supply and price is carefully controlled and regulated by one secret organization; De Bears. De Bears, euphemistically known as a syndicate controls 60% of the supply and demand of diamonds in the world from their headquarters in South Africa. Once they mine and sort their diamonds, they are packaged into lots where they are sold off to a select group of no more than 150 site holders worldwide. A site holder is a company that has been granted permission, by De Bears, to purchase their rough uncut diamonds and resell.
These site holders blindly purchase the rough diamonds they are offered and carefully cut them into beautiful polished gem stones available for market. The most profitable site holders are the ones that can yield the most diamonds demanded by the marketplace from the limited irregular rough diamonds they get. Of course, as you can imagine, this is no easy balancing act. Consumers shopping for diamonds should not be disenchanted with the information they have learned here any less than they would be with other products. After all, many products from gas to even real estate are controlled in one way or another. The most important thing here is to fully understand how a diamond gets from a diamond mine to a jewelry store and who determines this process. In the business of diamonds, knowledge is power. And it is our mission to make you as knowledgeable as possible
How are diamonds graded, priced and traded? Answering these questions will unlock the secret to understanding how to value diamonds. Once one can determine how to value a diamond, one has a better chance of purchasing this diamond at the proper price.
Learn how diamond dealers secretly price diamonds
When diamond dealers trade diamonds amongst themselves they constantly refer to what is known in the industry as The RAPAPORT LIST to check the value of the diamonds they are pricing. The RAPAPORT LIST is a survey conducted by the Rapaport company among numerous diamonds dealers that determines the average price paid for every combination of carat weight, color, shape and clarity for a specific time period.
Once a category of diamond has been assigned a "list price" diamond dealers know how well they have purchased a diamond they are contemplating, depending on the discount they have received off of the list price. Once a diamond buyer determines exactly what size, color, clarity and shape they are looking for, the discount off of The RAPAPORT LIST becomes the single most critical factor in determining how well they have purchased their diamond. Obviously, the better the discount off of list price, the more value you have gotten.
Yet why is this RAPAPORT LIST so important to a diamond dealer? With the numerous combinations of color, shape, clarity and weight of diamonds in the marketplace, there are millions of possible price categories to memorize which would take a lifetime of experience to gather. This would be nearly impossible to do. With The Rapaport company hard at work tallying all this price information for you, you can benefit from all of this trading experience by knowing one single number. Consumers should thank Rapaport. Without the list, the purchase of a diamond would be a completely "blind purchase" with the advantage in the hands of those market makers with the most experience. Today, the spread or profit in diamond prices has been reduced as savvy consumers use the list price as leverage to "hold out" on sellers until they lower their prices to more competitive ones. The list also allows you to compare two or more diamonds using one simple number as a yardstick.
What factors can influence the varying discount rates off the list price? Is the discount rate you've received off of the list price simply a matter of how well you have negotiated your price? the answer is no. There is more to under- standing the discount off of list price. The two other critical factors that can influence the discount off of list price are (1) make and (2) demand.
What exactly is meant by the "make" or “cut” of a diamond and how does this affect the discount off of the list price? When diamond cutters are presented with the challenge of cutting newly mined irregularly shaped rough diamonds into polished symmetrical stones, they must determine the optimal size and shape they can yield from a rough diamond without leaving too much waste.
After all, with diamonds being so very expensive, a large amount of waste can translate into heavy losses. Diamond cutters know the perfect shape and proportions a polished diamond should have to make it the most beautiful and brilliant it can be. A "perfect" diamond with "perfect" shape and "perfect" proportions is known within the industry as an Ideal Cut Diamond. Based on how well their shaped, well cut diamonds or Ideal Cut Diamonds can shine more brilliantly and are considered more rare versus poorly cut diamonds that are rushed to market regardless of how well they are shaped.
Those diamonds that are Ideal Cut and perfectly shaped are more sought after by consumers making them more in demand, Because of this increased demand for Ideal Cut diamonds, their discount off the RAPAPORT LIST is less than a poorly cut diamond. Determining the exact definition of Ideal Cut diamonds and superior make is a topic we will examine very closely in our Buyer's Guide. For now, it is important to understand that superior cut diamonds are less discounted than poorly cut diamonds. At any given time, you are more than welcome to phone American Diamond and request a quotation for the LIST PRICE of a diamond from the RAPAPORT LIST. Our expert sales professionals will also help you determine the discount off of the RAPAPORT LIST for the diamonds you are interested in.
Understanding laboratory diamond grading reports: GIA versus AGS
Within the diamond trade there are numerous organizations who have established businesses, some for profit and some non profit, that are in the business of assessing the value of diamonds for both consumers and businesses. These organizations or laboratories produce certificates or grading reports that reveal the quality, and hence value, of a diamond. Among the most reputable organizations for the grading of diamonds are the GIA and the AGS. We would like to compare and contrast these two organizations and reveal the differences in the certificates that they produce…
The most obvious differences between the GIA Certificate and the AGSL Diamond Quality Document is in how each organization grades a diamond. The GIA Certificate only measures or grades the dimensions of a diamond. For example, a diamonds width, height or depth percentage. The AGSL Certificate reveals more information about the shape of a diamond. The AGSL Diamond Quality Document reveals information about the “cut” of a diamond such as the CUT GRADE, DIAMOND PROFILE, CROWN ANGLE, PAVILLION DEPTH, CROWN HEIGHT, PAVILLION ANGLE and TOTAL DEPTH PERCENTAGE.
Identifying the exact numbers found on a GIA Grading Report that determine IDEAL CUT for all shapes of diamonds :
Grade: IDEAL CUT Shape: Round Brilliant Table: 55% - 57% Depth: 61% - 62% Polish: Excellent – Very Good Symmetry: Excellent – Very Good Grade: Good Shape: Round Brilliant Table: 53% - 57% Depth: 61% - 62.8% Polish: Excellent – Very Good Symmetry: Excellent – Very Good etc...