Charging Premium Pricing based on Location

[chrono]

Carry over from a previous thread:

Minou

Niel: I am very interested in seeing examples of what you speak of - where provenance alone is enough to draw the selling price high on a mediocre quality colored stone - not diamonds, but colored stones. I find it interesting that you - by your own admission - know little about colored stones but then make claims with little support and are not willing to reconsider. I seldom see cases where what you speak of is true so I respectfully ask you to point them out, or to please stop making it sound as if this is routinely done - I certainly do not want to perpetuate this point of view for any newcomers who are out to learn.

Chrono: please point these out if you see them on a regular basis. Its one thing to try and sell them at this price, but as you well know,
actually selling them for a ridiculous asking price is another kettle of fish entirely.

You are speaking of something different Chrono, where what is left is lesser quality material and the going price happens to now be high across the board. The real deal, like your Mahenge spinel (quite expensive to begin with), would now command astronomical prices by comparison. A case where all boats rise. But no one will pay more for a mediocre Mahenge spinel than a top notch red spinel from another location, like Burma - that is my point.

 

[chrono]

Minou,
Isn't that the case with most coloured stones? The Kashmir mines are practically closed or non-producing. The Mogok ruby mines are also practically closed or non-producing. Most of the top famed mines are either either closed or only producing lesser quality material.

 

[Niel]

As someone without much colored stone knowledge, especially less before i got here. Literally ALL i know about sapphires was the terms "cylon" and "cornflower" and "kashmir" ( i know cornflower isnt a place, im just saying thats another buzzword)

Someone sticks that on a listing, the uninformed consumer is under the assumption this makes it a better stone.

But I see that everyone seems to agree that if the stone is of a high quality; one being from nowhere, one from a desirable location, the second would be more expensive. Could that be said about any level of quality? Why wouldnt one of medium quality from a desirable location be more expensive than one of same quality from nowhere?

 

[minousbijoux]

As someone without much colored stone knowledge, especially less before i got here. Literally ALL i know about sapphires was the terms "cylon" and "cornflower" and "kashmir" ( i know cornflower isnt a place, im just saying thats another buzzword)

Someone sticks that on a listing, the uninformed consumer is under the assumption this makes it a better stone.

But I see that everyone seems to agree that if the stone is of a high quality; one being from nowhere, one from a desirable location, the second would be more expensive. Could that be said about any level of quality? Why wouldnt one of medium quality from a desirable location be more expensive than one of same quality from nowhere?

You have just changed your premise. This is what you were saying before and with which I was disagreeing: "Kashmir became well known for high quality sapphire. NOW people can get more just by attaching the label, dispute the fact that particular stone may not have the same quality as the rough that made the location desirable." My point to you and to novices like you is to look around a bit and answer your own questions by doing your own due diligence.

I don't believe someone will choose origin over quality, as your example seems to indicate; people go for quality first. All things equal, then they will choose quality and origin (if origin adds to perceived value which often it does not). But when it gets to lesser quality stuff, the significance of origin largely fades away - we see it all the time with spinels from Mahenge - they are lovely in their own right, but are not the color, nor command the premiums, of their vivid red brethren. Same with Burma/Kashmir/Cuprian/Namibia/Fanta - you get the point.

 

[Niel]

As someone without much colored stone knowledge, especially less before i got here. Literally ALL i know about sapphires was the terms "cylon" and "cornflower" and "kashmir" ( i know cornflower isnt a place, im just saying thats another buzzword)

Someone sticks that on a listing, the uninformed consumer is under the assumption this makes it a better stone.

But I see that everyone seems to agree that if the stone is of a high quality; one being from nowhere, one from a desirable location, the second would be more expensive. Could that be said about any level of quality? Why wouldnt one of medium quality from a desirable location be more expensive than one of same quality from nowhere?

You have just changed your premise. This is what you were saying before and with which I was disagreeing: "Kashmir became well known for high quality sapphire. NOW people can get more just by attaching the label, dispute the fact that particular stone may not have the same quality as the rough that made the location desirable." My point to you and to novices like you is to look around a bit and answer your own questions by doing your own due diligence.

I don't believe someone will choose origin over quality, as your example seems to indicate; people go for quality first. All things equal, then they will choose quality and origin (if origin adds to perceived value which often it does not). But when it gets to lesser quality stuff, the significance of origin largely fades away - we see it all the time with spinels from Mahenge - they are lovely in their own right, but are not the color, nor command the premiums, of their vivid red brethren. Same with Burma/Kashmir/Cuprian/Namibia/Fanta - you get the point.

The first bolded and the second bolded are saying the same thing. Once the location becomes desirable, just the location alone can increase the value of the stone.

 

[cm366]

For what it's worth, I see "Kashmir" or "Burma" used MUCH more often to indicate a hue/tone than an honest-to-goodness backed up by evidence ORIGIN on mediocre stones. The web vendors selling sapphire for $200/ct use "Burma" to mean bluish black, "Kashmir" to mean rich blue with maybe some purple, and "Ceylon" to mean anything lighter than that. People try to charge more for it the same way they charge more for "EXTREMELY EXCELLENT AAA+++++", but I don't think you'd find a knowledgeable consumer/trade member buying mediocre sapphires at a premium based on their alleged location.

On the other hand.... people go absolutely nuts for anything labeled Paraiba, and I've seen some otherwise reputable vendors attach pretty funny-looking prices to unspectacular stones with that name on them. Perhaps some things are rare enough, or have a sufficiently crazed group of buyers, that the usual 'rules' don't apply?

 

[minousbijoux]

As someone without much colored stone knowledge, especially less before i got here. Literally ALL i know about sapphires was the terms "cylon" and "cornflower" and "kashmir" ( i know cornflower isnt a place, im just saying thats another buzzword)

Someone sticks that on a listing, the uninformed consumer is under the assumption this makes it a better stone.

But I see that everyone seems to agree that if the stone is of a high quality; one being from nowhere, one from a desirable location, the second would be more expensive. Could that be said about any level of quality? Why wouldnt one of medium quality from a desirable location be more expensive than one of same quality from nowhere?

You have just changed your premise. This is what you were saying before and with which I was disagreeing: "Kashmir became well known for high quality sapphire. NOW people can get more just by attaching the label, dispute the fact that particular stone may not have the same quality as the rough that made the location desirable." My point to you and to novices like you is to look around a bit and answer your own questions by doing your own due diligence.

I don't believe someone will choose origin over quality, as your example seems to indicate; people go for quality first. All things equal, then they will choose quality and origin (if origin adds to perceived value which often it does not). But when it gets to lesser quality stuff, the significance of origin largely fades away - we see it all the time with spinels from Mahenge - they are lovely in their own right, but are not the color, nor command the premiums, of their vivid red brethren. Same with Burma/Kashmir/Cuprian/Namibia/Fanta - you get the point.

The first bolded and the second bolded are saying the same thing. Once the location becomes desirable, just the location alone can increase the value of the stone.

Thank you for that clarification as it does not read the same to me at all. In the second one it sounded as if you believe that a mediocre stone will command a premium based on its "Kashmir" location. Phew! I thought you were actually espousing this viewpoint - happy to hear we're on the same page.

For anyone else just starting out in colored stones like Niel, please do not consider origin; consider quality of the stone. If you do not know what quality is, then educate yourself here and on other websites before you spend any real significant money on a stone. When and only when you understand what constitutes quality in the gem type, and what characteristics are sought in that origin, then and only then should you consider adding origin as a consideration. In general, location is irrelevant to the value of the stone - it is in the rarified upper end only that this plays a role.

 

[chrono]

Some discussion of origin pricing here too:
[URL='https://www.pricescope.com/community/threads/new-to-coloured-gemstone-buying-read-this-first.174284/page-2']https://www.pricescope.com/community/threads/new-to-coloured-gemstone-buying-read-this-first.174284/page-2[/URL]

Richard Hughes writes about how the market values origin (and by extension, there is a premium based on origin) under Original Sin:
http://www.palagems.com/sapphire_connoisseurship.htm
Original sin
First, let me say that there is a definite market ranking for sapphire according to origin. It unfolds as follows:
1.Kashmir
2.Mogok, Burma
3.Ceylon
4.Everything else
That said, I would like to be allowed to burst all your bubbles. Origin is not what’s important – quality is.

I cannot find the thread today but recall there was a couple, that even when informed they are paying a premium for the origin, preferred the more expensive stone even though they were also offered an equally beautiful Madagascar sapphire for less.

 

[Niel]

I'm not saying that they ARE better because of where they come from. I'm staying from a marketing standpoint it behooves a seller to have a stone that comes from a famed region and allows them to charge a bit more. I am not saying it has any noticeable viable distinction but so?

Its a mind clean issue just like other aspects of buying gems.

Does IF make a stone any more eye clean than a VVS1?
All else equal, why do you want a non heated stone over a heated one?

People value different things.and a company will capitalize on that.

This like everything else is something a characteristic someone can use to get more money. The rarity of that particular mine, just like the two other characteristics I listed, will command a premium despite the fact it may not have any marked difference in the visual enjoyment of the stone. Its mental thing. And some people go for that.

Or also, some people think that's what's important in a stone. Maybe by personal choice maybe because of limited knowledge. Sure they may be only valuing it because they think they are suppose to. But that doesn't change the fact they are still valuing it.


Now of course this site helps to ward against that. But not everybody comes here.

 

[kenny]

I see a struggle between two things, what is, and what should be.

I think the more knowledgable folks here are working to make things how they should be.
Origin should not matter, only quality should.

Acknowledging that origin does matter, even just as far as pricing is concerned, upsets people so they fight against it here.

I agree origin should not matter, but I can acknowledge that it does because there are enough poorly-informed people willing to pay extra (I'm guilty since I bought an Argyle pink) and enough vendors capitalizing on $$$$$$.

 

[FrekeChild]

But you aren't poorly informed Kenny!

I think it's goofy to charge a premium for a stone based on where it's from. It needs to be priced based on the beauty of the stone.

Paraiba is a good example of this I think, since there is so much disagreement over it.

BEHOLD! Mahenge spinels! (The ring, I don't know the origin of the light pink necklace stone.)

 

[Niel]

I agree it is goofy.

 

[kenny]

But you aren't poorly informed Kenny!

I knew part of the price I was paying was for the location.
I bought it anyway.
I wanted it, and I didn't see any cheaper non-Argyle pinks that were as nice since Argyle was churning out lots of pinks back then.

 

[FrekeChild]

But you aren't poorly informed Kenny!

I knew part of the price I was paying was for the location.
I bought it anyway.
I wanted it, and I didn't see any cheaper non-Argyle pinks that were as nice since Argyle was churning out lots of pinks back then.

But you knew! You were willing to pay the premium because the stone was so beautiful. I think that's a lot different than a non-educated person buying a stone because someone told them Argyle diamonds were the best, and buying it for the name.

Maybe that's what it boils down to? Buying something because it's beautiful in spite of it's name/origin? We buy things based on their individual physical characteristics, or a name that another human being gave it? What kind of value does a particular name give to an item?

What's in a name? A rose is a rose by any other name...or however it goes.

 

[Niel]

FC you are right.

But if it should play a role and if it does are two different things. Like Kenny said.

 

[T L]

In some cases, I do think locations produce the finest qualities of a gem, like the actual original mine Paraibas and Muzo mine emeralds. Therefore, a premium will be charged on high quality gems from those locales, but I have seen sapphires that were as beautiful as fine Kashmirs, although from other locations. It depends on the gem and the location.

 

[minousbijoux]

In some cases, I do think locations produce the finest qualities of a gem, like the actual original mine Paraibas and Muzo mine emeralds. Therefore, a premium will be charged on high quality gems from those locales, but I have seen sapphires that were as beautiful as fine Kashmirs, although from other locations. It depends on the gem and the location.

This exactly - I will take a sapphire from Madagascar any day over a stone from Kashmir, because the odds are, of the stones I can get my hands on, the Madagascar sapphires will be far nicer than any Kashmir stone.

I guess the focus on origin is far more important with diamonds than in most colored stones. There is no question that Paraiba, Brazil has no rivals and Muzo emeralds are their own. But even so, we are talking about the cream of the crop from these locations, and not any old stone.