Discussion of Brand Value

In the history of diamonds the demand for certification is a relatively new phenomenon. When GIA-GTL first offered this service in the 1953’s the majority of their work was with rare larger diamonds of high color and clarity. Today even diamonds J and lower colors and I2 clarity are often sold with comparatively costly reports; consumers should have no need for a report to judge the acceptability of such diamonds. We may therefore conclude that a diamond grading report itself provides some additional value above and beyond the confidence that the diamond is natural and untreated.

Diamonds are difficult to brand, but considering that a diamond with a GIA report can cost around 10% more than the same diamond with an EGL USA report, this could be a quantification of GIA’s brand value. Here are some possible reasons why GIA adds value:

1. GIA developed the diamond grading standards.
2. GIA first established independent reporting for diamonds and gems.
3. The GIA has trained more gemologists and sales people than all other institutes combined.
4. GIA offers training and education in many foreign countries.
5. GIA offers effective distance learning programs worldwide.
6. GIA graduates often prefer to buy and sell diamonds with GIA-GTL reports.
7. Diamonds graded by GIA-GTL have the excellent re-sale liquidity.
8. A GIA-GTL graded diamond appears to have the GIA’s stamp of approval.

There are, however, some disadvantages associated with GIA-GTL reports.

1. Additional cost.
2. No crown and pavilion data for cut quality analysis.
3. Hence poorly proportioned diamonds are likely to be graded by GIA-GTL.
4. GIA-GTL reports generally cost more than most other labs.
5. GIA-GTL takes much longer to grade a diamond than other labs.

Diamonds with AGSL reports command the same or slightly higher prices as GIA-GTL graded diamonds. The market perceives a high level of trust in AGSL color and clarity grading; however their reputation has more to do with AGS being the “ideal cut” brand. Rarely are there diamonds listed for sale that are not AGS 0 or AGS 1. The terms ‘ideal-cut’ and AGS 0 have become synonymous.

 
EGL USA works very hard at building its brand through advertising and promotion. To this end EGL USA has attempted, through legal channels, to stop the entry into USA and Canada of diamonds accompanied by EGL reports from outside the Americas. If EGL USA does grade more strictly than EGL in other countries, then diamonds with imported certificates would damage their brand. Differentiating their certificates on B2B listings would seem to be a priority for EGL USA to improve its brand standing. However, further tightening of EGL USA’s grading strictness is a double edged sword; that might result in a reduction in the number of diamonds being submitted.

 

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