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- May 3, 2001
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OoohShiny|1403889489|3702184 said:Cool, I can't wait!
I guess that this process is different to just getting an existing diamond re-cut?
From what was posted in another thread, re-cutting an existing stone is, what, $350 + $350/kt, so it would be, in theory, $1050 plus any shipping costs to re-cut a 2kt stone (to a MRB in the $350 case).
Are the costs higher if cutting a rough, due to additional assessment and other processes that need to take place?
e.g. If DF had sent in a rough to a cutter that he had bought from A.N.Other person, would the total costs just be what it would cost to actually scan, measure, work out the best cut and then the cutting process itself? Or would it be more, and depend on the end specification of the stone, as has been alluded to earlier in this thread?
Following on from that line of thought, if one is buying a rough from a vendor and getting them to cut it, how does the charging structure work? If the example of the re-cutting process was followed, the cost would seemingly be Price of Rough (and associated searching for it) + costs of evaluation + costs of cutting.
That would surely equal less than the Retail Cost of the end result because the profit margin on the stone (which would ordinarily pay for the cutting costs etc that had been carried out at the vendors own risk, and then the costs of running the shop to sell the stone and the profit required/desired on top of the actual costs) would not be necessary - the profit would come from the money received for carrying out the searching and assessment and cutting services, without the need for profit margin to cover 'shop space' and so on.
So, in effect, buying from a vendor as normal would mean:
purchase price of the completed stone = price of rough + price of assessment + price of cutting + price of grading + costs of running a shop to sell it + profit margin on top.
Profit margin would be determined by the end specifications of the completed stone determining its price and therefore how much profit there is between price of sale minus price of processing.
But... buying a rough and commissioning its cutting would mean:
purchase price of the completed stone = price of rough + price of assessment + price of cutting + price of grading + costs of staff to carry out communications during the process, all without profit margin on top, because the commissioner would be paying all costs for the processing.
Therefore... the end specifications of the stone cut from the rough, and the price it would sell for on the open market, would be irrelevant and would not increase the price to the commissioner over and above the costs of the cutting process because the vendor has just provided the cutting service and had all their costs covered by the commissioner (as in the case of the re-cutting service) so they are not out of pocket.
Granted, some small profit margin would probably be built in to each stage of the process, but it would not be as much as would be realised were the stone to end up, say, a large and high-spec stone and sold through the 'as normal' process above.
It does seem as though the end spec of the stone does impact on the price of the completed stone, though, going from the thread? I presume this is to cover previously incurred development costs, additional hassles created by the different approach to normal, the fact that people have to make a living...
Anyway, does the above make any sense to anyone but me in my head?
I understand these are sensitive discussions and vendors are completely at liberty to answer or ignore our questions as they see fit, and are also at liberty to charge appropriately so they can operate with a level of profit margin that can ensure they provide the service we know and love and appreciate but I thought I'd ask the questions anyway, just so I can get them out of my head... lol
Mods - please delete if you see fit!
Sorry my friend, but you are wide of the mark. In theory your reasoning sounds okay, but there are realities that jump in to bite you.
Because of the value of rough and the extremely narrow margins that cutters can make on their bulk purchases, any rough that you as a consumer are able to purchase will be priced too high for you to have it cut and reach that holy grail of a "cheaper than normal wholesale" diamond.
Add in now the complex regulations and controls for the Kimberly Accords and you may well find it impossible to find any competent cutter who will accept your diamond rough, as you will not have the requisite paper work to prove that you came by it legitimately. (Did you know that in many countries you can be imprisoned just for having rough diamonds on your person without a hard to get license?)
If you do have the paper work, you paid too much for the diamond. (Catch 22 here, in full force. Why would you as a one time purchaser be able to buy a diamond for less than someone who buys millions of dollars worth per year as a site holder?)
I have talked with dozens of people over the past thirty years, all of them long before the Kimberley accords, and not one of them has ever brought me a piece of diamond rough that was, in my opinion, worth the money to cut, no matter what the original cost of the rough. (I would not let you even bring me a piece to look at today, the sanctions are too horrific if it turned out to be a conflict diamond.)
There is an article here someplace that Paul Slegers of Crafted by Infinity Diamonds wrote several years ago about how he lost his shirt on a parcel of rough. This is a man who handles and buys LOTS of diamonds and rough every year, and will all of his knowledge and experience he lost thousands of dollars on that parcel. Fortunately, he does not do that often!
I strongly suggest that you consider how transparent the market for diamonds is, and how small the margins are today and do not even waste time thinking about how to get around paying those margins for the purchase of your diamond. It will only end up costing you MUCH more than if you had just bought the diamond in the polished form.
Just my thoughts of course...
Wink