Grading systems and 'gaming' them: An eternal story?

[Serg]

re:I then investigated I-VS2 (a larger sample size was available). If we treat the most-expensive diamond as $9000:

GIA 3EX results ranged from $7650 to $9000. Average price was $8300.
EGL USA Ideals ranged from $4320 to $6030. Average price was $5400.


John,
I-VS2 range is too big range for such survey . Most probably few cutters see the sense to Cut GIA 3EX I and others reasonably select EGL Ideal for I clarity diamonds.
you need compare GIA 3EX VS2 with EGL Ideal VS2, GIA 3EX SI with EGL Ideal SI, GIA 3EX I with EGL Ideal I separately .

 

[Paul-Antwerp]

Sergey,

I am pretty sure that John is referring to the colour I in combination with the clarity VS2, not a range in clarity from I to VS2. This is also reflected in the price-range.

Live long,

 

[Serg]

Sergey,

I am pretty sure that John is referring to the colour I in combination with the clarity VS2, not a range in clarity from I to VS2. This is also reflected in the price-range.

Live long,

Paul,
Thanks, for explanation . I missed it

 

[Learning Slowly]

I know this probably isn't as accurate as John's research, but I looked at one of PS's vendors who has EGL and GIA diamonds listed. I compared the average price of GIA 3EX G SI1 and EGL(et al) Ideal D VS2 from 1.00 to 1.09cts. This wasn't a good comparison because there are 60 GIA stones in the category, but only 9 in the EGL category.

GIA 1.00-1.09cts G color, 3EX SI1: Averaged $6600
EGL 1.00-1.09cts D color, Ideal VS2: Averaged $6300

This is 4 grade difference (3 color and 1 clarity), and the EGL is still coming in at $300 less. If you include $150 for appraisal (GIA charges $100 for certification), that pushes the EGL to $6450, still under the GIA. This is "assuming a 4 grade difference". I mean it seems buying an EGL D, getting it GIA certified (unless an EGL D VS2 is really a G SI2 or H VS2) it seems like you're increasing the stone's market value by $100. Not that this is a way to "invest", I merely use this as an analogy. How do people feel about these numbers in terms of "gaming" and the use of certification in purchasing a diamond? I don't mean to beat a dead horse, but I'm still not certain I understand how the recommendation is to never buy EGL (as long as you are aware of the stereotype) stones. And whether the GIA prices are not a game in themselves. Granted, if retailers are selling EGL stones at GIA prices, this all becomes mute. Is there anything problematic with this?


EDIT: I checked bluenile additionally (not that bluenile is all that but broadly known) only for the GIA and with 13 stones they averaged GIA 3EX G SI1 at $7290

 

[Paul-Antwerp]

I know this probably isn't as accurate as John's research, but I looked at one of PS's vendors who has EGL and GIA diamonds listed. I compared the average price of GIA 3EX G SI1 and EGL(et al) Ideal D VS2 from 1.00 to 1.09cts. This wasn't a good comparison because there are 60 GIA stones in the category, but only 9 in the EGL category.

GIA 1.00-1.09cts G color, 3EX SI1: Averaged $6600
EGL 1.00-1.09cts D color, Ideal VS2: Averaged $6300

This is 4 grade difference (3 color and 1 clarity), and the EGL is still coming in at $300 less. If you include $150 for appraisal (GIA charges $100 for certification), that pushes the EGL to $6450, still under the GIA. This is "assuming a 4 grade difference". I mean it seems buying an EGL D, getting it GIA certified (unless an EGL D VS2 is really a G SI2 or H VS2) it seems like you're increasing the stone's market value by $100. Not that this is a way to "invest", I merely use this as an analogy. How do people feel about these numbers in terms of "gaming" and the use of certification in purchasing a diamond? I don't mean to beat a dead horse, but I'm still not certain I understand how the recommendation is to never buy EGL (as long as you are aware of the stereotype) stones. And whether the GIA prices are not a game in themselves. Granted, if retailers are selling EGL stones at GIA prices, this all becomes mute.

Be my guest.

I am not inclined to put any money in such a venture, while I have a worldwide market, crying for more GIA-graded goods at my doorstep.

One of the problems in your comparison is that you do not know which EGL-lab is grading it.

Live long,

 

[Learning Slowly]

Paul,

I whole heartedly agree with your critique and observation. My comparison is VERY rough, and only worth the 15 minutes I put into it. I think a detailed scientific study would be much better and telling. Especially with the growing price differentiation.

However, the poor reputation of EGL as a brand hurts EGL International and EGL USA alike and pushes all EGL prices down, regardless of lab. I also tried to negate the lack of lab specificity by considering the combined 4 grade difference, when most PS bloggers have suggested on average 2-3 grade differences (despite the 2004 study that suggested closer to 1.5 if I recall). Additionally, the whole world is asking for more GIA graded stones for a reason. That's why I have kept this in the "gaming" feed. Does the difference in certification justify the difference in pricing, or is the world on your doorstep requesting more and more GIA certified stones a function and testimony to the gaming taking place in diamond certification.

 

[John P]

John, Thank you for your reply and those illustrations. They are in fact, extremely, interesting. I had not really seen this type of nuance discussed with respect to EGL. I guess this is why I was/am so interested in a follow-up comparison being done. And in terms of "gaming" instead of "being gamed", this makes me even more curious about the overgrading of EGL or EGL USA D diamonds. Since a GIA D can't be "upgraded", I am curious if buying an EGL D is more advantageous than buying an EGL F or G. And with the $4700 price difference described by JP between EGL and GIA D VS2 the cost of getting it appraised or sent to GIA doesn't seem obtrusive. JP, what was the average price for GIA E or F VS2 1.01-1.09? If its still higher than the EGL, then that is even more interesting. Again, thank you so much for your comments. This has helped greatly.

You're welcome. It seems that you're no longer "Learning Slowly."

Not many E and F colors listed. If we treat the most-expensive GIA E-VS2 3EX as priced-at $11,000 the range was $9,100 to 11,000. Average price $10,400. Only one EGL-USA E-VS2 Ideal listed; $7410

Similarly, if we treat the most-expensive GIA F-VS2 3EX as priced-at $10,000 the range was $8,000 to 10,000. Average price $9,000. Only one EGL-USA F-VS2 Ideal listed; $6400

So, same results, even with limited offerings.

The summary is that jewelers will pay far less to a supplier for EGL options...but turn around and mark them up by significant percentages. They can then appear to give "mighty" discounts when in fact - even after giving that "mighty" discount - the jeweler stands to make even more on the deal than he would selling a GIA or AGSL option to an educated client.

 

[Rockdiamond]

Learning Slowly- the reason the PS study, while well meaning, has no effect, is the same as why a more intense study would be a waste of money.

I am extremely familiar with EGL USA.
I agree, they are a very good lab, and generally close to GIA grading standards.
There have been times I actually felt they were too critical.
The foreign EGL's are a completely different story.

The market forces make EGL efforts irrelevant- or actually very relevant, in this discussion.
AS John points out, sellers pushing EGL paper more often than not simply try to convince buyers their D/VS1 is a bargain compared to another seller offering the GIA graded stone.

The practice is very widespread, and IMO a huge disservice to consumers.
Don't discount the intelligence, or business savvy of the cutters. they know to get full market price, only a GIA ( or AGSL) report will suffice
Produce a stone with an EGL paper, and the wholesale price plummets.
How good EGL is or isn't really isn't the issue.
If sellers explain this entire issue to consumers, that's a different story- but I don't see that happening all that often.

 

[kenny]

The summary is that jewelers will pay far less to a supplier for EGL options...but turn around and mark them up by significant percentages. They can then appear to give "mighty" discounts when in fact - even after giving that "mighty" discount - the jeweler stands to make even more on the deal than he would selling a GIA or AGSL option to an educated client.

Imagine how insulted and ripped off buyers of these stones feel when they read this!
How can these sellers live with themselves?


How can this be legal?
Where's the outrage?

 

[Rockdiamond]

+1 Kenny- we agree wholeheartedly ( yay!)

It's one reason I get a little frustrated when the PS study is cited.

Well meaning?
Yes.

Relevant? Not really- in fact it would be better IMO if there was a cautionary note added.

The legality has to with the boilerplate writing on all properly written Gemological reports- basically saying that the grades contained therein are merely opinions.

 

[Garry H (Cut Nut)]

+1 Kenny- we agree wholeheartedly ( yay!)

It's one reason I get a little frustrated when the PS study is cited.

Well meaning?
Yes.

Relevant? Not really- in fact it would be better IMO if there was a cautionary note added.

David have you really read the survey?
Have you read it or looked at it?
Especially this page:
https://www.pricescope.com/wiki/diamond-grading/discussions

 

[Karl_K]

Similarly, if we treat the most-expensive GIA F-VS2 3EX as priced-at $10,000 the range was $8,000 to 10,000. Average price $9,000. Only one EGL-USA F-VS2 Ideal listed; $6400

To make this a little clearer...
When buying on an internet list where the same margin is applied to all stones(be careful it might not be) the stones are at their real relative market value compared to each other.
Since the ratio is likely the same and we dont know what margins were applied lets use those numbers for wholesale.

What happens hundreds of times a day across the world is:
Dealer: I have this gia F-vs2 for $11000 its a real nice diamond but I can give you a great deal, $1000 less for this F-vs2.
Buyer: WOW, here is my credit card.

Profit: $1000 on the GIA and $3600 on the egl.
It gets better that person goes out and tells his/her friends that they saved $1000 on a diamond you have to go see this guy!
Not only did they way overpay they are happy about it because they got a "deal" and send more people to the dealer.

 

[Rockdiamond]

+1 Kenny- we agree wholeheartedly ( yay!)

It's one reason I get a little frustrated when the PS study is cited.

Well meaning?
Yes.

Relevant? Not really- in fact it would be better IMO if there was a cautionary note added.

David have you really read the survey?
Have you read it or looked at it?
Especially this page:
https://www.pricescope.com/wiki/diamond-grading/discussions

Thanks for the link Garry- but nothing I read on that page gets the correct point across, if we're talking about consumer protection.
My point again: It matters not one whit if EGL graded the same color/clarity on a test sample.
If we're talking about round diamonds, the market price difference between a GIA triple EX, versus Triple VG is substantial.
ANY EGL report would be immeditaly downgraded by the wholesale buyer to a price well below the triple VG level.
Look at it this way- say a consumer is considering an RBC stone for purchase that has a GIA report dated prior to 2006- no cut grade.
No matter how well cut the stone is ostensibly, it's worth a lot less than the very same diamond which has gotten a triple EX from GIA. EGL pricing follows this logic. Until GIA confirms a grade, it does not exist.
If we're talking fancy colors- an EGL graded stone which looks all the world like a Fancy Intense- and is graded Fancy Intense by EGL-USA, will go for at least 20% less than the same stone after having gotten a GIA grade of intense yellow.
Although my experience with EGL-USA in fancy colors indicates there's even more "play" in the grade- many EGL graded Fancy Colors are graded in the setting. Such stones can be three shades off, easy.

IMO there should be a CLEAR warning to consumers that EGL graded stones represented without explanation by the seller indicate a problem.
Telling the consumer " This is a G , but EGL graded it D, due to looser standards recognized by the trade. The price is the same as a GIA G" is a world apart from what does go on day in and day out- Karl described it very well.

What happens hundreds of times a day across the world is:
Dealer: I have this gia F-vs2 for $11000 its a real nice diamond but I can give you a great deal, $1000 less for this F-vs2.
Buyer: WOW, here is my credit card.

Profit: $1000 on the GIA and $3600 on the egl.
It gets better that person goes out and tells his/her friends that they saved $1000 on a diamond you have to go see this guy!
Not only did they way overpay they are happy about it because they got a "deal" and send more people to the dealer

 

[Garry H (Cut Nut)]

Thanks for the link Garry- but nothing I read on that page gets the correct point across, if we're talking about consumer protection.

[/quote]

It does explain the retail scentario on that page David, but it is a journal article and not senstionalist.
We would assume that anyone who has read the full article would understand the issue.

But as it appears you did not read the survey in full - here is the relevant section:

The lower cost of EGL USA graded diamonds is passed on to consumers who buy on-line from e-tailers who uploaded B2B listings and simply add a set percentage mark-up, the same for all stones. However lower EGL USA grade diamond prices may not always be passed on in full at the retail level. An effective retailer typically prices goods at what the market will bear; it would be reasonable to assume that most consumers would be unaware of the magnitude of the value difference between diamonds with reports from different grading labs. However, even at a retail level, many consumers would be consciously aware of the reputation of the GIA.

 

[Rockdiamond]

Garry- it's not "sensationalist"- it's reality.
All due respect, but I did read the paragraph you quoted, and quite frankly, it does NOT get the job done. In fact, it starts out by saying the lower cost of EGL-USA stones is passed on to consumers!
The mere fact that this discussion- people citing that survey" has happened to many times is ample proof that the conclusion reached does not properly identify the very large, and ongoing problem.

 

[Garry H (Cut Nut)]

Garry- it's not "sensationalist"- it's reality.
All due respect, but I did read the paragraph you quoted, and quite frankly, it does NOT get the job done. In fact, it starts out by saying the lower cost of EGL-USA stones is passed on to consumers!
The mere fact that this discussion- people citing that survey" has happened to many times is ample proof that the conclusion reached does not properly identify the very large, and ongoing problem.

David you may have read but still do not seem to understand that consumers buying EGL stones online get the same deal the retailers get.
It "finishes off" that way in that sentence.

 

[denverappraiser]

The lower cost of EGL USA graded diamonds is passed on to consumers who buy on-line from e-tailers who uploaded B2B listings and simply add a set percentage mark-up, the same for all stones. However lower EGL USA grade diamond prices may not always be passed on in full at the retail level. An effective retailer typically prices goods at what the market will bear; it would be reasonable to assume that most consumers would be unaware of the magnitude of the value difference between diamonds with reports from different grading labs. However, even at a retail level, many consumers would be consciously aware of the reputation of the GIA.

Garry,

My observation is that most retailers who carry EGL graded goods, both online and off, do so precicely because they can apply MORE markup to those goods while still appearing to be price competitive to the final consumer. The 'bargain', if indeed there ever was one, is NOT being passed on to the consumer, it's being absorbed by the dealer and/or their suppliers. A straight 'cost+' style of pricing is decidedly unusual although each dealer works differently and I agree that this is not an effective approach for sensible retailers.

 

[Garry H (Cut Nut)]

The lower cost of EGL USA graded diamonds is passed on to consumers who buy on-line from e-tailers who uploaded B2B listings and simply add a set percentage mark-up, the same for all stones. However lower EGL USA grade diamond prices may not always be passed on in full at the retail level. An effective retailer typically prices goods at what the market will bear; it would be reasonable to assume that most consumers would be unaware of the magnitude of the value difference between diamonds with reports from different grading labs. However, even at a retail level, many consumers would be consciously aware of the reputation of the GIA.

Garry,

My observation is that most retailers who carry EGL graded goods, both online and off, do so precicely because they can apply MORE markup to those goods while still appearing to be price competitive to the final consumer. The 'bargain', if indeed there ever was one, is NOT being passed on to the consumer, it's being absorbed by the dealer and/or their suppliers. A straight 'cost+' style of pricing is decidedly unusual although each dealer works differently and I agree that this is not an effective approach for sensible retailers.

Neil you are talking about stones that vendors have in house.
The survey is discussing virtual stones where several wholsalers goods are uploaded, GIA and EGL all, onto a vendors site.
All have the same mark up.

Do you have evidence where differnt mark ups are applied to virtual stones based on their lab reports?

 

[Rockdiamond]

Since Neil does not work for any company selling diamonds, and anyone that does would generally never answer that question, evidence is highly unlikely Garry.
Tell you what I'd like to see as "counter evidence"
Quotations from sites offering EGL graded stones where there is ample explanation of the fact that the trade discounts EGL grades heavily- and the reasons for it. In that context, I don't see anything wrong with offering stones graded by any EGL.
In lieu of that I assume we'd all agree that any dealer who knows about a deficit in an item and purposefully neglects to tell a buyer has done an injustice.

We hear all kinds of cock and bull stories right here on PS.
People are put off GIA for so many completely untrue reasons.
This is done by sellers eager to exploit the "apparent" price advantage to unsuspecting shoppers.

 

[Learning Slowly]

At least one example. I'm not certain of this company's reputation, but it's an example.
http://www.brilliance.com/diamond-certification :

Before grading a diamond, the EGL thoroughly scrutinizes every facet and detail of the stone. Each diamond is inspected by at least eight expert gemologists. If the judgment of a diamond is not unanimous, senior gemologists further analyze the stone before a grade is assigned.

EGL vs. GIA

Although both the EGL and the GIA are internationally reputed gemological laboratories, the GIA has become known for its stricter grading standards when compared to those of the EGL.

Brilliance recommends the following laboratories, in order of preference: GIA, AGS, EGL, IGI, and HRD.

And when talking with their live chat consultant, I was told there was a 2-3 grade difference. Like I said, this is a personal example, while my chat is not available for duplication, the other citations are on their website. While everyone may not make this information available, this is at least one.

 

[Rockdiamond]

I can't comment on any particular seller- but I do applaud any company that is open about the labs, and how the industry uses them.
If someone I trusted to grade a diamond told me an EGL graded stone was a given grade, I'd believe the color clarity rating- but I'd still insist on paying less than the accurate GIA grade price for many reasons.
A GIA graded D/VS1 EX cut grade is worth more than the identical stone with an EGL report- no matter what the report called it.
Maybe it's a borderline VS2- and it could go ether way if the stone was submitted twice.

Maybe this is like a full circle to the original subject- is it "gaming the system" for sellers to use EGL without the proper explanation?Would that have any comparison to cutters maximizing yield by cutting at the "edge" of cut grade?
Do these two different activities have any relation?

 

[Garry H (Cut Nut)]

Since Neil does not work for any company selling diamonds, and anyone that does would generally never answer that question, evidence is highly unlikely Garry.
Tell you what I'd like to see as "counter evidence"
Quotations from sites offering EGL graded stones where there is ample explanation of the fact that the trade discounts EGL grades heavily- and the reasons for it. In that context, I don't see anything wrong with offering stones graded by any EGL.
In lieu of that I assume we'd all agree that any dealer who knows about a deficit in an item and purposefully neglects to tell a buyer has done an injustice.

We hear all kinds of cock and bull stories right here on PS.
People are put off GIA for so many completely untrue reasons.
This is done by sellers eager to exploit the "apparent" price advantage to unsuspecting shoppers.

Pretty easy for anyone with a B2B account to check the margins for pricescope vendors on virtual's David.
I can't be bothered because I am sure they all use the same mark up for GIA and EGL stones.

Regarding GIA, I think their grading consistency is improving now that they have a stable Indian workforce.

 

[Rockdiamond]

Garry- I promise, I'm not trying to pick a fight-but what you're suggesting won;t help.
If a publicly traded company is researched, there are aspects that are public.
However not things like individual sales and that type of statistic.
"XY Company had such and such sales, at such and such gross margin"
Not each sale and it's margins.

I really think this is an important point as I honestly believe consumers loose out when buying higher quality diamonds without the right report.
There's always a lot of people needing to sell diamonds- probably more so lately.
Well cut, high quality stones with GIA paper give the seller a lot more leverage when consumers need to sell.
When consumers need to sell to an educated buyer - which includes a ( debatable) percentage of dealers.
Million dollar question:
Does it have a GIA report?

If it's a J/VS2- not so big a deal, in terms of raw dollars.
If it's a 2ct D/VS1 GIA EX cut grade versus an identical diamond, EGL graded D/VS1. the person with the GIA will net a fair dollar amount better.

 

[denverappraiser]

Garry,

As David points out, few dealers would share their costs with me even if I asked and I'm no more eager than you to spend my time looking at the asking prices of a collection of stones from the data feeds and comparing them to the asking prices here on pricescope but I think you're missing the bigger picture. Even if the dropshipper is just marking up the data feed a fixed amount and doing them all in bulk, the people who are listing the stones in the first place AREN'T. Someone looked at the stone, they chose what lab to send it to, and they chose how to price it. This decision was not made with passing bargains on to consumers as the objective. Even if the next person in the chain just puts a percentage on it, nothing really has changed as far as the consumer is concerned.

 

[Garry H (Cut Nut)]

Garry,

As David points out, few dealers would share their costs with me even if I asked and I'm no more eager than you to spend my time looking at the asking prices of a collection of stones from the data feeds and comparing them to the asking prices here on pricescope but I think you're missing the bigger picture. Even if the dropshipper is just marking up the data feed a fixed amount and doing them all in bulk, the people who are listing the stones in the first place AREN'T. Someone looked at the stone, they chose what lab to send it to, and they chose how to price it. This decision was not made with passing bargains on to consumers as the objective. Even if the next person in the chain just puts a percentage on it, nothing really has changed as far as the consumer is concerned.

Neil I agree, and gave a real example of a +$100k stone listed by the same vendor with GIA and EGL - higher price on the EGL.

However that is not the point I raised related to the discussion about selling on line and the survey from 2004.

I looked for 1 EGL Israel stone listed on Pricescope, a 1.ct G VS2 and found it on Rapnet. The vendor mark up was 8.9%.
I then found a GIA listed stone from that Pricescope vendor listed at about the same price and that stone on RapNet is 9.7% cheaper.
So the gIA had a higher mark up!

I know different vendors can have different deals with diff vendors blah blah.
But this study of 1 stone and one vendor shows that vendor is NOT marking up EGL Israel higher than GIA.

I rest my case.

 

[Paul-Antwerp]

You may rest your case, Garry, and you have made your point. But my question is what your point in this off-topic actually is. It seems a lot like:

"The online-sales-model of diamonds is superior, especially in the sense of consumer-protection. More in detail, the drop-shipper-model of online-sales is ultimately superior, since it contains no involvement of the vendor on pricing, nor any actual checking, so that the true market-value of each diamond is directly passed on to the consumer."

The missing link in your point is that the selling cutting-house is not pricing each diamond individually either, using general pricing for broad categories instead.

Your point comes close to a certain economical theory, relatively popular in certain parts of the world in the 20th century, and nowadays incorrectly used by many Americans as an accusation versus their own president and Europeans, like myself. In theory, that indeed was the best possible system of consumer and citizen-protection, but in practice, it happened to be another story. Wasn't that also an example of a system not really being bad in design, but its execution and human beings' gaming it leading to disaster?

Live long,

 

[Garry H (Cut Nut)]

Thanks Paul.
I simply reported back to David that his analysis (bad words for David) - ? Review? ?opinion? of the 2004 survey was wrong.

You have put words in my mouth that are a long way from my opinion of what best serves consumers.

I would prefer Pricescope had no virtual diamonds and that all vendors were committed to the stones on offer and could add traditional retail services and value. Unfortunately that is ideal-istic.

(you should know by now that I say what I mean rather directly)

 

[yssie]

Thanks Paul.
I simply reported back to David that his analysis (bad words for David) - ? Review? ?opinion? of the 2004 survey was wrong.

You have put words in my mouth that are a long way from my opinion of what best serves consumers.

I would prefer Pricescope had no virtual diamonds and that all vendors were committed to the stones on offer and could add traditional retail services and value. Unfortunately that is ideal-istic.

(you should know by now that I say what I mean rather directly)

Disagree Garry.

I'm glad I was able to purchase off the virtual inventory and have my trusted vendor vet the stone w/ professional eyes for me before shipping it out to inspect myself. I was glad to keep my entire purchase w/in the same establishment, stone and setting, without the requirement of committing to branded in-house stones given that H&A is not something I'm interested in paying more for, and neither are very generous upgrade/trade/buyback policies. I paid more for the services/extra policies than I would have had I purchased straight from a drop-shipper, but I also paid less than if I'd purchased an in-house stone - t was an educated choice, and one I'm happy I had the opportunity to make.

 

[Paul-Antwerp]

Thanks Paul.
I simply reported back to David that his analysis (bad words for David) - ? Review? ?opinion? of the 2004 survey was wrong.

You have put words in my mouth that are a long way from my opinion of what best serves consumers.

I would prefer Pricescope had no virtual diamonds and that all vendors were committed to the stones on offer and could add traditional retail services and value. Unfortunately that is ideal-istic.

(you should know by now that I say what I mean rather directly)

Sorry about putting words in your mouth, Garry.

I just got confused and could not really follow what your actual opinion was.

Take care,

 

[Rockdiamond]

Wow Garry- A one stone study allows you to declare markups are higher on GIA stones as a rule.
Interesting. Also that my opinion is "wrong"- yet I'm buying millions of dollars a year on the NY market. I see many stones with EGL reports- and they're virtually never without excuses.
I stand by my statements- if consumers try to "game the lab system", they're bound to loose. The PS study did not make this clear enough IMO

You may rest your case, Garry, and you have made your point. But my question is what your point in this off-topic actually is. It seems a lot like:

"The online-sales-model of diamonds is superior, especially in the sense of consumer-protection. More in detail, the drop-shipper-model of online-sales is ultimately superior, since it contains no involvement of the vendor on pricing, nor any actual checking, so that the true market-value of each diamond is directly passed on to the consumer."

The missing link in your point is that the selling cutting-house is not pricing each diamond individually either, using general pricing for broad categories instead.

Your point comes close to a certain economical theory, relatively popular in certain parts of the world in the 20th century, and nowadays incorrectly used by many Americans as an accusation versus their own president and Europeans, like myself. In theory, that indeed was the best possible system of consumer and citizen-protection, but in practice, it happened to be another story. Wasn't that also an example of a system not really being bad in design, but its execution and human beings' gaming it leading to disaster?

Live long,

Paul- regarding the point in bold: I agree if we're speaking of smaller stones ( melee )- or maybe even GIA graded EX cut grade stones of 1.00ct size.
But with larger, more important stones, my experience here in NYC is that cutters try to get every advantage. That means looking at each stone, and pricing accordingly.
IE- One given 2.00ct stone graded G/SI1, but it's an amazing SI1 - should have been VS2, and it's priced higher than another 2.00 G/SI1 with a black carbon in the table.
Or, if a cutter gets a GIA grade they're unhappy with, they may send it to EGL - however given the huge disparity in market pricing, this may be a last resort- or only used on more commercial stones.