How Diamond Prices Are Determined

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How Diamond Prices Are Determined

You see all those lovely diamonds and their mind blowing price tags in the showrooms and you wonder how these diamond prices are determined. How come they are so every expensive and out of reach to common people?

What Goes Into The Diamond Prices Determination Process?
Pricing most products is quite easy. Find 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 several factors that are considered when diamonds are priced.

Diamond costs are decided first by adding the price of the rough diamond, the cost of cutting the diamond, and all other Prices required to turn the rough diamond into a saleable diamond. Depending on the grandness of the diamond, an independent company possibly called in to certify the range of the diamond based on color, cut, clarity, and weight.

At this point, the diamond becomes costlier each time it changes hands, until it ultimately reaches a retail merchant, where the cost is
raised a little more. Before reaching the Retail merchant, however, the diamond must travel from the mine, to the cutter and polisher, to the independent ranking company, and then to the Primary market. Once it’s reached the primary market, it will be Bought by diamond dealers and wholesalers, and from there it will be sold to retailers.

As you may see, the earlier you may buy a diamond in the process, the lower the price 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 retail merchant.

If you own a diamond, and you’ve no idea how much it’s worth, you may have it appraised, but the appraisal may not be accurate. You’ll be better off obtaining a certificate through GIA – Gemological Institute of America. With the information on this certificate, you may 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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June 30 2009 09:00 am | Diamonds

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