Myths and Facts About WholeSale Diamonds

Question about the Facts of Wholesale Diamonds:

I’ve heard some internet diamond vendors and some B&M claim to be wholesalers. But if they’re selling diamonds to everyone, aren’t they pretty much a retailer? Are there really wholesalers that sell to non-professionals? Is it a marketing trick?

Answer:

Exact definitions of “wholesaler” and “retailer” differ only by who is being sold to. A wholesale transaction is always with a party that intends to resell the item and not use it themselves. A retail transaction is to an “end-user”, a consumer, the folks who will own and/or wear the diamond or the ring. The Internet has allowed a tremendous shortening of the supply chain where we now have true wholesalers also selling to end-users at prices very close to inter-deal pricing. Many true retailers can’t buy diamonds for their stores at prices low enough to adequately cover their higher overhead even if they are willing to compete with Internet vendors. Many refuse to compete. Many choose to make an effort to compete. I think we will see many success stories of B&M stores that have made it work and many other stories about B&M stores that could not compete in this new marketplace.

Obviously, not everyone is happy about this huge change, but Pandora’s box has been opened and it will not be shut.

I have a distrust of anyone claiming to sell wholesale diamonds to the public. It is illegal to make that claim although it is commonly done. All one need be concerned with is THE PRICE being paid. If you have shopped properly you can pay pretty much the same amount as anyone else looking to buy many diamonds. It is becoming much more like real estate where there really is no wholesale or retail situation. Any and all buyers can come and buy at the market price.

Certainly, quantity buying allows lower costs. Retailers and wholesalers who buy diamonds in large volumes do not pay the same as buyers of one diamond at a time. So, there is some variation for consumers who generally only buy diamonds in small amounts.

Look for the right price from a vendor with a personality and service which pleases you. Don’t be mislead by these basically now obsolete terms of wholesale and retail when it comes to a solitaire diamond ring or a pair of stud earrings. The business environment is quickly changing.

David S. Atlas
GG(GIA), ASG, Sr. Mbr. NAJA
Accredited Gem Appraisers

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