Rapaport - Curious

[MissGotRocks]

So I realize that the Rapaport pricing is not the be all, end all to diamond pricing - particularly in today’s markets. I am just curious though - let’s say a particular color/clarity diamond is listed at 175. This is for size 2.00 - 2.99. So for a 2.25 carat diamond, does this mean that the price would be 39,375.00? Again, I realize that these prices are not completely accurate, but am trying to decipher the way Rapaport would price such a diamond. There are some sellers though that will quote a Rap price - just trying to figure out how they get to their price.

 

[Rockdiamond]

Rap is totally useless at this point....but to answer your question...
175=$17500 per carat
Yes a 2.25ct would be $39375 at $17500 pc

Hope this helps!

 

[MissGotRocks]

Rap is totally useless at this point....but to answer your question...
175=$17500 per carat
Yes a 2.25ct would be $39375 at $17500 pc

Hope this helps!

Thank you - it helps! I thought I was on the right track but wanted clarification from an expert. I assume there would be a markup added to that price as well.

I also totally understand that not much is predicated on Rap, but interesting that some are trying to use it in sales.

 

[Karl_K]

Thank you - it helps! I thought I was on the right track but wanted clarification from an expert. I assume there would be a markup added to that price as well.

I also totally understand that not much is predicated on Rap, but interesting that some are trying to use it in sales.

When a dealer starts talking Rap to a consumer I am highly skeptical.
Even in normal times its a tool used to make people think high retail prices are bargains.
Given the greater than usual disconnect from reality of rap list prices it is even more problematic today.
It goes something like this....
What is said: I have an awesome deal for you just 10% over Rap list I am hardly making anything on it. Boohoo your getting me on this deal.
The truth: The wholesale price the jeweler is paying is Rap-45% or so and they are making a lot of money.
Thee harder truth they tend to offer stones with the lowest to them price for the given specifications because of issues so they are making even more and the client is getting a stone with issues.

The PS search engine which is internet retail is a better judge of actual diamond prices than Rap list.

 

[AllAboardTheBlingTrain]

As a complete aside - do dealers in the US actually quote prices at a premium to Rap?

Here in India it’s very common to debate prices based on Rap - but it’s usually always at a discount to Rap. I don’t think I’ve ever seen someone quote a price at a premium (though I’m sure it must happen).

I’d say the prices I see quoted here are usually lower (but almost always in the ballpark) of PS engine prices so it’s not like you’re getting a screaming deal by buying in India as a foreigner, but it’s just interesting to me because quoting Rap is a given part of the deal. So whenever I would see advice online about how Rap is used to mislead customers I couldn’t understand how, but I get it now from Karl’s explanation!

 

[MissGotRocks]

When a dealer starts talking Rap to a consumer I am highly skeptical.
Even in normal times its a tool used to make people think high retail prices are bargains.
Given the greater than usual disconnect from reality of rap list prices it is even more problematic today.
It goes something like this....
What is said: I have an awesome deal for you just 10% over Rap list I am hardly making anything on it. Boohoo your getting me on this deal.
The truth: The wholesale price the jeweler is paying is Rap-45% or so and they are making a lot of money.
Thee harder truth they tend to offer stones with the lowest to them price for the given specifications because of issues so they are making even more and the client is getting a stone with issues.

The PS search engine which is internet retail is a better judge of actual diamond prices than Rap list.

Thanks @Karl_K! Yes, many of us have heard the spiel of razor thin margins, yada, yada, yada. I guess getting a fair price just means how much you are willing to pay!

 

[Rockdiamond]

Looking at this from the other side….
Yes, using rap prices to justify a high retail price is bogus. But small potatoes compared to the bigger picture.
The “big boys”…. Think about this, the entire internet retail of diamonds is pretty much owned by Signet. BN and JA.
They are now offering diamonds, retail, at the prices we used to pay wholesale.
There’s virtually no wholesale diamond market left.
I remember fondly arguing with a cutter / dealer about a stone to get the best deal. At this point you’d have to be crazy to invest in natural stones. Sad for the business and the consumers too.

 

[MissGotRocks]

Looking at this from the other side….
Yes, using rap prices to justify a high retail price is bogus. But small potatoes compared to the bigger picture.
The “big boys”…. Think about this, the entire internet retail of diamonds is pretty much owned by Signet. BN and JA.
They are now offering diamonds, retail, at the prices we used to pay wholesale.
There’s virtually no wholesale diamond market left.
I remember fondly arguing with a cutter / dealer about a stone to get the best deal. At this point you’d have to be crazy to invest in natural stones. Sad for the business and the consumers too.

So businesses have no incentive to purchase and stock natural diamonds because there would be no profit to them? They could purchase them and add their own markup, right?

 

[Rockdiamond]

They could purchase them and add their own markup, right?

Absolutely- but the retail seller buying these diamonds would have to depend on clients who don't know about the internet....or are so opposed to buying online that they're willing to pay a premium to buy from a stone. Now when you consider how many sizes, grades and varieties of diamonds there are, what should the dealer buy?
2ct stones, Rounds, fancy shapes????
And in terms of the original question.....
Just doing a quick check on one of the "big boys" sites.
A 2ct G/SI1 is being offered at....ready for this...
55% BELOW the rap price.
Sure, it's the cheapest SI1, and cut like a doggie...
Oddly enough, the most costly one is about Rap+5%...also doggie style cut......when you look on the big virtual sites, it's really difficult to make valid pricing conclusions.....

But all of this discourages dealers from buying diamonds for stock

 

[MissGotRocks]

Absolutely- but the retail seller buying these diamonds would have to depend on clients who don't know about the internet....or are so opposed to buying online that they're willing to pay a premium to buy from a stone. Now when you consider how many sizes, grades and varieties of diamonds there are, what should the dealer buy?
2ct stones, Rounds, fancy shapes????
And in terms of the original question.....
Just doing a quick check on one of the "big boys" sites.
A 2ct G/SI1 is being offered at....ready for this...
55% BELOW the rap price.
Sure, it's the cheapest SI1, and cut like a doggie...
Oddly enough, the most costly one is about Rap+5%...also doggie style cut......when you look on the big virtual sites, it's really difficult to make valid pricing conclusions.....

But all of this discourages dealers from buying diamonds for stock

It sounds rather like a big guessing game these days. Don’t want to overstock what isn’t selling but hard to know what might sell. Maybe online vendors will eventually almost take orders rather than have huge inventory? All new circumstances require some out of the box thinking!

 

[Rockdiamond]

Maybe online vendors will eventually almost take orders rather than have huge inventory?

The large online retailers have never had extensive inventory- - the majority don't own a single stone.
15 years ago, the diamonds listed on these sites were spread out- a nice percentage in NYC and Ramat Gan Israel- less in LA and a few other places. Back then India had a nice share of the stones- maybe 50%....now it's over 80% for sure...maybe even 90%.
And the largest diamond companies in NYC are all owned by Indian firms at this point. Very few prominent online retailers actually carry inventory.
And there are still examples of successful walk in retail jewelry stores with actual inventory, and selling diamonds...but a fraction of how there were 20 years ago.

 

[Rockdiamond]

It sounds rather like a big guessing game these days.

It always was.....
Back in the day ( in the '90's) I made my living selling diamonds to jewelry stores in the Caribbean. St Thomas and St Maarten specifically.
Strange coincidence...all of those dealers were from India- but of a different caste from the families owning the diamond companies today in Surat India.
Anyway, the best of these jewelers were shrewd business people. I used to sell tons of J-K-L, well cut stones.
Before GIA had so much sway, people ( usually already tipsy from the cruise ships) would snatch up these "silver cape" diamonds with no lab reports.
I think that back then, a nice 2ct ...G/VS1 was probably $12k wholesale. The faint yellow stones I was selling were probably $4k wholesale.
Anyway, the point is that these jewelers were so successful because they knew just what to buy. A lot of my stateside customers back then , sold a fraction of the diamonds the Island guys did.
St Maarten in particular...was like paradise back then.... don't get me started....

 

[MissGotRocks]

It always was.....
Back in the day ( in the '90's) I made my living selling diamonds to jewelry stores in the Caribbean. St Thomas and St Maarten specifically.
Strange coincidence...all of those dealers were from India- but of a different caste from the families owning the diamond companies today in Surat India.
Anyway, the best of these jewelers were shrewd business people. I used to sell tons of J-K-L, well cut stones.
Before GIA had so much sway, people ( usually already tipsy from the cruise ships) would snatch up these "silver cape" diamonds with no lab reports.
I think that back then, a nice 2ct ...G/VS1 was probably $12k wholesale. The faint yellow stones I was selling were probably $4k wholesale.
Anyway, the point is that these jewelers were so successful because they knew just what to buy. A lot of my stateside customers back then , sold a fraction of the diamonds the Island guys did.
St Maarten in particular...was like paradise back then.... don't get me started....

Yes, but vacationing people imbibing are not always the shrewdest customers! I know several people that have brought back their ‘bargains’! Yikes! However, those suppliers filled a niche of customers and both sides were probably happy.
Wonder what they are selling today? Same stuff, different day?

 

[AllAboardTheBlingTrain]

This thread is actually fascinating for someone who doesn’t live in the US because the Indian diamond market operates so differently (or at least my experience and perception of it does). I have bought all my stones from my jeweller who only has a retail presence in a store in India, but the way he works is like a concierge service almost. I wouldn’t expect him to have stones to the spec I want at hand, I would expect him to source it. Which is almost like how the online retailers behave, except they do no filtering and recommendation work, they just show you a repository of available stones.

So I wonder why retailers in the US can’t do this, like why not source stones for their customers? Is it that the average customer is an impulse buyer and doesn’t want to wait for a few days, they just want to see it in their hands and buy it immediately?

 

[MissGotRocks]

This thread is actually fascinating for someone who doesn’t live in the US because the Indian diamond market operates so differently (or at least my experience and perception of it does). I have bought all my stones from my jeweller who only has a retail presence in a store in India, but the way he works is like a concierge service almost. I wouldn’t expect him to have stones to the spec I want at hand, I would expect him to source it. Which is almost like how the online retailers behave, except they do no filtering and recommendation work, they just show you a repository of available stones.

So I wonder why retailers in the US can’t do this, like why not source stones for their customers? Is it that the average customer is an impulse buyer and doesn’t want to wait for a few days, they just want to see it in their hands and buy it immediately?

My guess is that online retailers would be more apt to do this than brick and mortar stores. I think it is a great idea though - the customer gets what they want and the vendor doesn't have costly inventory sitting around that isn't moving!

 

[AllAboardTheBlingTrain]

My guess is that online retailers would be more apt to do this than brick and mortar stores. I think it is a great idea though - the customer gets what they want and the vendor doesn't have costly inventory sitting around that isn't moving!

I'd say there's always some inventory he has on hand, but not too many stones. I have seen sometimes though, when someone comes in with no clue of what they want, he does have a small selection of stones that people can choose from.

I don't think all jewellers in India work like this - he's not the cheapest option by any means, and I think he makes most of his money with the actual jewellery and not the stones, but I think the way he does business is great for me, haha.

 

[Rockdiamond]

So I wonder why retailers in the US can’t do this, like why not source stones for their customers? Is it that the average customer is an impulse buyer and doesn’t want to wait for a few days, they just want to see it in their hands and buy it immediately

I think what happened is that the jewelry retailers in the US were taken completely by surprise. They were totally unprepared.
When I started selling diamonds online- waaaaaay back in 1999…. People in the trade thought I was nuts. “Right, people are going to buy diamonds online… no way!!”
But I realized that this shift would inevitably cause harm to walk in retail jewelers. And it has.
Now, the internet is so saturated getting a foothold is close to impossible.
And here we are.