Wednesday, December 21, 2011

All About Diamond Prices

Pricing most products is quite easy.  Determine how much it costs to make the  item, how much it costs to market that item,  and then mark it up by 15 – 30% or more.  Simple, right? Well, pricing diamonds isn’t  quite that simple. There are many factors  that are considered when diamonds are  priced.  Diamond prices are determined first by  adding the cost of the rough diamond, the  cost of cutting the diamond, and all other  costs necessary to turn the rough diamond  into a marketable diamond. Depending on  the importance of the diamond, an  independent company may be called in to  certify the grade of the diamond based on  color, cut, clarity, and weight.  At this point, the diamond becomes more  expensive each time it changes hands, until  it finally reaches a retailer, where the price is  raised a bit more. Before reaching the  retailer, however, the diamond must travel  from the mine, to the cutter and polisher, to  the independent grading company, and  then to the Primary market. Once it has  reached the primary market, it will be  purchased by diamond dealers and  wholesalers, and from there it will be sold  to retailers.  As you can see, the earlier you can purchase  a diamond in the process, the lower the cost  of the diamond will be – but not the value.  The value is based on what the diamond will  sell for in the market place – through a retailer.  If you own a diamond, and you have no idea  how much it is worth, you can have it  appraised, but the appraisal may not be  accurate. You will be better off obtaining a  certificate through GIA – Gemological Institute  of America. With the information on this  certificate, you can use a cutter’s guide to  accurately determine what your diamond is  worth.   There are also many diamond price  calculators available. These can be found  on the Internet, and many diamond dealers  use these as well. You must realize, however,  that before you can accurately price a  diamond, without a Diamond Grade Report,  you need to know quite a bit about diamonds,  such as different cuts, clarity, color, and weight  – and how each of those aspects adds to the  value of a diamond, or decreases the value of  the diamond as the case may be.   Again, you will be better off if you get a  Diamond Grading Report on the diamond,  and use that information to look up the price  in one of the guides that the diamond cutting  industry uses. This will give you the most  accurate value of the diamond in your  possession, or of the diamond you are  considering purchasing.

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