THE REAL MARKUP ON DIAMONDS

More is less

The more expensive a diamond is, the less profit jewelers will make. This is because larger diamonds (1.00 carats and bigger) are expensive to begin with. The costs on large diamonds are extreme. Market pretty much dictates certain price ranges and margins to work with.

A 1.00 carat diamond, SI1 clarity, G color, GIA certified, will usually only be around 10% price difference from store to store (and actually James Allen has it selling for just $5,120). There’s just too much competition to overprice diamonds and be greedy. If a jeweler tried marking the retail prices up really high, it would backfire. They’d never sell any.

So jewelers have to keep them within acceptable limits. Plus, the market for really large diamonds is slim. How many people really buy large diamonds? Which means, a jeweler can’t overcharge. And jewelers don’t like keeping large diamonds tied up in inventory either. It locks up their cash flow and keeps them from buying new merchandise, or marketing. So jewelers are more apt to make very minimal profits on larger stones.

The truth:

Diamonds are NOT the awesome profit makers that make jewelers rich!!!

Diamonds and diamond deals are the things that get customers in the door. If it means just making a couple hundred dollars on a one carat diamond, they’ll do it. Diamonds do no good sitting around in the jewelry showcases and collecting dust.

So then, if jewelers don’t make huge profits on diamonds…

What do they make their profits on?

They make money on the mountings, gold, chains, and gemstones. Things like these keep the jewelers afloat. Especially in today’s economy.

It’s not like the olden days where jeweler’s and every business could mark things up 3 times. Today, jewelers work hard and struggle. They make less profit and do what they can to keep their existing customers, and attract new ones. But then, most companies are hurting big time right now. It’s just the way that it is. It’s a sad state all across the country and luxury items are no different.

So just because diamonds are expensive and cost lots of money, doesn’t mean the jewelers are making fortunes on them. More like a couple bucks here and there. Just enough to keep paying the bills, make a decent living, and buy new diamond rings that you’re simply going to love and enjoy.

Now that’s the real deal.

Cheers! :)