Same grade, same price?

[kenny]

This is a question for vendors here...

We all know some SI1s are eye clean while others are not.
We've been told there can be a high G and a low G.

If all other things were exactly equal do vendors charge more for the more desirable diamonds with the same color or clarity grade?

I realize diamonds vary, no two are exactly alike, they are not a commodity, cut will vary, blah blah blah...

But again, this is, if all other things were exactly equal.
Assume these otherwise-identical diamonds are hypothetical if you must.

 

[Dancing Fire]

Date: 2/28/2010 11:59:11 PM
Author:kenny
This is a question for vendors here...

We all know some SI1s are eye clean while others are not.
We''ve been told there can be a high G and a low G.

If all other things were exactly equal do vendors charge more for the more desirable diamonds with the same color or clarity grade?

I realize diamonds vary, no two are exactly alike, they are not a commodity, cut will vary, blah blah blah...

But again, this is, if all other things were exactly equal.
Assume these otherwise-identical diamonds are hypothetical if you must.

yes!! i''ll bet my AS on it.

 

[Karl_K]

no it does not work like that.
The low G not eyeclean si1 may be more than a high G eyeclean stone.
Even if the cut was exactly the same.

 

[Dreamer_D]

Date: 3/1/2010 12:24:38 AM
Author: Karl_K
no it does not work like that.
The low G not eyeclean si1 may be more than a high G eyeclean stone.
Even if the cut was exactly the same.

Why? Between vendor variance? What about from the same vendor?

 

[kenny]

Bump for vendors.

I''m not talking about two vendors.
I''m talking about the same vendor deciding what to price their own stones.

Remember I said everything else equal.

If this is proprietary, just say so.

 

[denverappraiser]

Does everything include their cost and the terms of their purchase?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[kenny]

Date: 3/1/2010 11:27:28 AM
Author: denverappraiser
Does everything include their cost and the terms of their purchase?

Good point, Neil.
Suppliers charging vendors more for the eye-clean SI1s had not occurred to me, but makes sense.

I'm certainly not seeking to make vendors look bad, just curious about if every otherwise-identical SI1 gets priced the same.
I suspect not, which is absolutely fine.
After all this is supply and demand and if customers cherry-pick a vendor's SI1s for the eye-clean ones then those ARE more in demand.
It is not hard to argue that it makes sense to bring prices in line with demand.

I'm not making any judgement on what is right or wrong.
I am just curious about the facts concerning this aspect of pricing.

 

[MichelleCarmen]

There''s definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there''s no such thing. It was an AGS stone.

 

[Rockdiamond]

Great question Ken!

Yes, there may be a difference in price based on a stone''s position within a given grade.
This is particularly true in more important stones.
I don''t believe that such a situation is common in .50ct stones for example- but in 2.00, yes it does.

The evidence of this can be found on the drop shipper''s lists.
Why should two stones that are ostensibly equal, show large variances in price?
The answer is that at some point buyers are going to actually look at stones ( as opposed to lists) and if a stone has inherent weakness, it takes a hit on the price.
Si2''s are another great example of this.
In a recent thread, a consumer had a big problem with an SI2. Given that the stone is likely going back to the cutter, there is a good possibility that the stone will have it''s price lowered- not a guarantee, but it''s possible. For example, if a dealer sees the stone, and makes a low offer, it would likely be accepted.
It''s also possible that the stones populating the lists are more prone to be on the weaker side- as the stronger ones will sell to dealers who actually look at the stones. Or that better stones get sold, while weaker ones get returned and stay on the lists.

We also see this commonly in Fancy Colors- where the color grades are even wider, so there can be a very large difference between a "strong" fancy Intense ( almost made Vivid, the next darker grade) and a weak one ( IOW, it just slipped by- and was almost Fancy Yellow, the next lighter grade)
I''ve seen cases of Fancy Intense Yellow SI2''s that were priced higher than another Fancy Intense Yellow Internally Flawless of the same size- simply due to the color.

 

[Karl_K]

Date: 3/1/2010 12:36:14 AM
Author: dreamer_dachsie

Date: 3/1/2010 12:24:38 AM

Author: Karl_K

no it does not work like that.

The low G not eyeclean si1 may be more than a high G eyeclean stone.

Even if the cut was exactly the same.

Why? Between vendor variance? What about from the same vendor?

variation in the price they bought it for.
Some vendors do go back to rap and have their own formulas for pricing their goods but many are cost plus.
If they were purchased at different times they may have got a better deal on one because they bought more diamonds with it.
Maybe the supplier was grumpy one day and they didn''t get as good a deal because 3 dealers were asking about the diamond.
There are just a trillion variations that can change the price.
There is no one set price a given diamond will sell at anywhere in the chain and if you add together all the variations, unless the end vendor wants to equal it out and some do there never will be.

 

[kenny]

Date: 3/1/2010 1:39:57 PM
Author: Karl_K

Date: 3/1/2010 12:36:14 AM
Author: dreamer_dachsie

Date: 3/1/2010 12:24:38 AM
Author: Karl_K
no it does not work like that.
The low G not eyeclean si1 may be more than a high G eyeclean stone.
Even if the cut was exactly the same.

Why? Between vendor variance? What about from the same vendor?

variation in the price they bought it for.
Some vendors do go back to rap and have their own formulas for pricing their goods but many are cost plus.
If they were purchased at different times they may have got a better deal on one because they bought more diamonds with it.
Maybe the supplier was grumpy one day and they didn''t get as good a deal because 3 dealers were asking about the diamond.
There are just a trillion variations that can change the price.
There is no one set price a given diamond will sell at anywhere in the chain and if you add together all the variations, unless the end vendor wants to equal it out and some do there never will be.

... again ...

... which is why I said all other things being equal (even use hypothetical stones if needed).

 

[Rockdiamond]

I disagree with what some of Karl is saying.
Cutters can not afford to use a "cost plus" basis for pricing stones, as a rule.
If they get lucky, and a stone they figured for F comes back an E or D, they MUST charge the price of the stone the way it''s graded.
The reason is easy to see- if it''s the other direction ( they figure it an F but it comes back G or H) no one is going to pay them for an F.
Therefore cutters must base the price on current market conditions.
This also holds true for stones that were cut a while ago.
It makes no difference what the cost (or selling price) was back then.

Stones that have been graded "badly" are exceptions.
Generally a cutter can scream all day long that he thinks GIA was too tough- but again no one is paying the cutter F prices for a stone graded G by GIA.
But buyers may pay a price commensurate with a "high G" if the stone looks very good. That is to say, at the higher end for a G.
Conversely, if it looks like an H, buyers will offer lower prices.

 

[Dancing Fire]

Date: 3/1/2010 12:09:00 PM
Author: MC
There''s definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there''s no such thing. It was an AGS stone.

definetly! that''s why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

 

[Rockdiamond]

Date: 3/1/2010 2:09:26 PM
Author: Dancing Fire

Date: 3/1/2010 12:09:00 PM

Author: MC

There''s definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there''s no such thing. It was an AGS stone.

definetly! that''s why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

Yes, but this highlights the importance of knowing your vendor and feeling comfortable with their ability to assess the color and clarity

 

[kenny]

Date: 3/1/2010 2:13:49 PM
Author: Rockdiamond

Date: 3/1/2010 2:09:26 PM
Author: Dancing Fire

Date: 3/1/2010 12:09:00 PM
Author: MC
There's definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there's no such thing. It was an AGS stone.

definetly! that's why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

Yes, but this highlights the importance of knowing your vendor and feeling comfortable with their ability to assess the color and clarity

... and demonstrating ethics in everything they do and say.

 

[MichelleCarmen]

Date: 3/1/2010 2:15:13 PM
Author: kenny

Date: 3/1/2010 2:13:49 PM
Author: Rockdiamond

Date: 3/1/2010 2:09:26 PM
Author: Dancing Fire

Date: 3/1/2010 12:09:00 PM
Author: MC
There's definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there's no such thing. It was an AGS stone.

definetly! that's why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

Yes, but this highlights the importance of knowing your vendor and feeling comfortable with their ability to assess the color and clarity

... and demonstrating ethics in everything they do and say.

Interesting. . .the vendor is a well-known one here on PS that others have said told them that the diamond(s) in question were a high or low of the graded color. I wonder why I was told differently?

 

[Karl_K]

Date: 3/1/2010 1:59:07 PM
Author: Rockdiamond
I disagree with what some of Karl is saying.

Cutters can not afford to use a ''cost plus'' basis for pricing stones, as a rule.

It is not the cutters working on cost plus but many vendors are.

 

[Karl_K]

Date: 3/1/2010 2:09:26 PM
Author: Dancing Fire

Date: 3/1/2010 12:09:00 PM

Author: MC

There''s definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there''s no such thing. It was an AGS stone.

definetly! that''s why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

That is a very different question.
Is the diamond properly graded?
Most vendors can answer that, most will not answer where it is in the zone.
Most don''t even know and arent about to sit down with a master set and find out for every diamond.
It wont effect their asking price anyway because they bought it based on the lab report and have to sell it based on the lab report to make a profit or return the stone.

 

[Rockdiamond]

Karl- the vendors are in a slightly different position- but the same rules do still apply.
If we're talking about general merchandise, yes, more room is possible.,
But in today's diamond market, the margins are so slim that even vendors that actually stock diamonds are bound to be very sure they cover the up-side to account for the down side.
Failure to do this results in vendors going under.

Ken- we're in total agreement- consumers should make sure they are comfortable with their vendor.
Public forums like this are a great way to see how a vendor's clients speak of them-= and also for vendors themselves to show how they behave "under fire", as it were.

 

[ChunkyCushionLover]

Date: 3/1/2010 1:02:10 PM
Author: Rockdiamond
Great question Ken!

Yes, there may be a difference in price based on a stone's position within a given grade.
This is particularly true in more important stones.
I don't believe that such a situation is common in .50ct stones for example- but in 2.00, yes it does.

The evidence of this can be found on the drop shipper's lists.
Why should two stones that are ostensibly equal, show large variances in price?
The answer is that at some point buyers are going to actually look at stones ( as opposed to lists) and if a stone has inherent weakness, it takes a hit on the price.
Si2's are another great example of this.
In a recent thread, a consumer had a big problem with an SI2. Given that the stone is likely going back to the cutter, there is a good possibility that the stone will have it's price lowered- not a guarantee, but it's possible. For example, if a dealer sees the stone, and makes a low offer, it would likely be accepted.
It's also possible that the stones populating the lists are more prone to be on the weaker side- as the stronger ones will sell to dealers who actually look at the stones. Or that better stones get sold, while weaker ones get returned and stay on the lists.

We also see this commonly in Fancy Colors- where the color grades are even wider, so there can be a very large difference between a 'strong' fancy Intense ( almost made Vivid, the next darker grade) and a weak one ( IOW, it just slipped by- and was almost Fancy Yellow, the next lighter grade)
I've seen cases of Fancy Intense Yellow SI2's that were priced higher than another Fancy Intense Yellow Internally Flawless of the same size- simply due to the color.

You see this in SI1s in colorless rounds where the inclusion is right smack in the middle of the table, and these are discounted whether its eye clean or not.
However I couldn't guess if its discounted at the vendor, wholesaler or retailer level though, who usually lowers the relative price?

 

[Rockdiamond]

Good question ccl!

It''s the market that will determine the price by influencing the way the dealer prices their goods.
The cutters will generally start out at a "regular" market price.
If a stone does not sell for a while, the cutter may lower the price.
In the case of dealers that actually stock stones , purchased from cutters, the market again will help determine if a stone is discounted.
Let it sit in the seller''s inventory for a few years because buyers have seen the spot- or maybe it''s been sold and returned a few times- that might cause the dealer to lower the price.

 

[Dancing Fire]

let me say this...
when i was doing coin shows in the 80's my nicer looking SI1 coins (talking in diamond term

) will always sell first and bring more $$$, were the so,so SI1's will sit longer in my show case. if i had 10 indentical coins of the same grade in my show case the nicer looking ones will always sell first.

 

[MichelleCarmen]

Date: 3/1/2010 2:40:57 PM
Author: Karl_K

Date: 3/1/2010 2:09:26 PM
Author: Dancing Fire

Date: 3/1/2010 12:09:00 PM

Author: MC

There''s definetly such a thing as low vs. hight color diamond? A few months back, I had my eye on an H stone and asked the vendor about it and the sales person said there''s no such thing. It was an AGS stone.

definetly! that''s why i always ask the vendor...is this stone a true H color or did the cutter received a lucky grade from the lab? i would ask the same Q on the clarity.

That is a very different question.
Is the diamond properly graded?
Most vendors can answer that, most will not answer where it is in the zone.
Most don''t even know and arent about to sit down with a master set and find out for every diamond.
It wont effect their asking price anyway because they bought it based on the lab report and have to sell it based on the lab report to make a profit or return the stone.

Thanks, Karl. When I called and was told that my question couldn''t be answered, based on what I''ve read on PS, I was a bit confused. Guess I''ll just stick with the certificate info for now on and cross my fingers that info is right!

 

[kenny]

This is weird.
Labs work so hard to describe a diamond but have overlooked an enormously important quality to many if not most buyers.
Is the diamond eye-clean or not? If so, by whom's definition? mine? yours?
Isn't this problem exactly what gem labs are for - describe a grade and tell us if gems meet it?

What if made GIA/AGS SI1 eye-clean and SI2 not eye-clean?

The term eye clean has been written 7,765,433,94367,957 times here on PS.
It is clearly a magic threshold to customers seeking diamonds in those grades.

It would not be impossible to establish an agree-to definition.
Sure you'd have stones near the border, but that's always the case.

Eye-cleanness seems to be extremely important to customers seeking these SI1 and SI2 stones.

 

[Rockdiamond]

It''s totally impossible to standardize what "eye clean" is.
For one thing, people have different ability to see- eyesight varies.

Then you have the element of how settings affect imperfections.
Sometimes a setting can hide an imperfection, other times it highlights it.

Bottom line is that clarity grades MUST be seen to be appreciated.
I1''s can be totally eye clean, VS1''s can have a spot that''s visible ( rare, but it happens)