Remember if you do not understand what your getting you do not know what you are giving up! Education is the key to a satisfied diamond purchase.

One way to look at what is happening is to take it as “supply” price increases. Looking at it that simply really does not tell the story in any clear way. It assumes that all of the increase is due to one cause and there is one method to measure the increases. Demand has an equal or even stronger role in most commodities. The huge demand increase in China and India are driving prices up even as demand in the U.S. is falling.

Lets look deeper. First allow that there is no one price or cost for anyone. Each stone is an individual and sorting them into like kinds for cutting is only an approximate measure. Also since there is no longer one large distribution point (DeBeers),  individual mine costs are not bundled or averaged any more. The greatly more expensive to mine Canadian diamonds put the mines in bankruptcy in the 90′s. Today with large consortiums now owning most of the worlds mines (including the Canadian mines) little averaging is being done at the rough level .

Cutters also have changed to meet demand. The were no price increases on cut diamonds between 2007 and late 2010 but there were
numerous increases in the cost of rough material from the mines. In fact several cutters went out of business because of the already tight margins disappearing. One of the ways they deal with price resistance is to cut larger stones from the material. In the past to do this, they cut shapes that would allow for less waste such as pear-shapes and marquise but these shapes remained in disfavor and consumers wanted what looked like a deal. This time they are allowing more problem stones to be sold to unaware jewelers and the public. I had a cutter tell me he had to cut this one diamond to a fine cut but it had an exposed crystal (what in wood would be called a loose knot) near the culet (the bottom point of a cut diamond). He said two years ago this would have been cut to a ¾ct not a one carat. He said “I have to live with this. I think about the person who will wear it someday.” He said it used to be a person marked the diamonds now they are marked by computers which only care about the laboratory report and the money.  There has also been an explosion of new cuts but few of these are for adding beauty mostly they are for adding weight.

Brokers and retailers also have had to change to the fact of increased cost while feeling strong price resistance. Brokers can bundle sales when they know a jeweler needs a certain stone. “I can give you a better price if you buy a couple.” They can also hedge
by using a different laboratory report which has different standards. Price range offers from vendors can range up to 40% depending on the
laboratory which wrote the report. Jewelers also can use these tactics but also they could use lower quality side diamonds or promote smaller center stones. Several stores are selling total weight rings where the exact weight of the center diamond is undisclosed. Since price jumps are at certain weight points such as a half a carat at .50ct where an average grade stone will have a  difference in price between a .49ct and a .50ct of $300.00.  It is legal in many states to post what you call a half carat as well so your half could be from .46 to .55 if you display that information in the store. The odds of getting a .55 is not very good however.

To know and trust what you are buying today you really cannot buy by looking at a piece of paper or a computer screen. You have to find someone who knows what they are selling and have no reason not to trust that person. You should not feel like you are being sold. You have to understand the value of what you are receiving by that persons knowledge. It is not easy today to avoid problem stones where everyone wants a deal and most of the stones are going to markets who do not quibble about price. China and India have no history of what things cost even five years ago. What is ask is what is paid and happily. There are qualities and sizes I have to wait in line for. If a deal is easy maybe there is a reason. What do you think?

Remember if you do not know what you are buying you do not know what you are giving up!

Beaudet Jewelry  

http://www.stopblooddiamonds.org/russell-simmons.asp

I’d rather be working toward something positive than running away from something bad.
Charles Beaudet

Spring 2011

      This trip is going to be a bit different. There have already been several price increases in the past month and my friends in Antwerp are anticipating more. One carat diamonds are being listed for 10% over the same stone listed in September. On top of that there are much fewer stones available  so high demand grades are getting premiums above list. larger diamonds have gone up even more, as much as 20% in some cases.

   What I’m being told is that this is just the beginning. Prices have been suppressed too long while costs have continued to rise. The price of rough diamonds alone has continued to increase while the recession spurred strong competition for sales. Two of the seven cutters I see in Antwerp have gone out of business because of this.

    What I’m anticipating is a singular chance to buy at “old” prices. I’ve talked a couple of dealers into it already and I suspect the cutters will be in a more jovial mood while still able to “one up” the competition. On top of that, the severe lack of  high demand grades will make them willing to negotiate further on highly desirable but less in demand stones. I believe the future will see an expansion of what grades are in demand and again I’ll be ahead of the curve. One of the things I learn in Antwerp is what type of rough is becoming available so I can anticipate what to look for to avoid problem stones but also which grades are likely to be  more available next time. Coming twice a year gives me several advantages and this is just one.

   What all this means is that I’m preparing to buy a larger amount than I normally do. I’m also preparing to be more flexible as to what I buy.

    Let me know if you would like me look for a diamond for you on this trip.  email info@beaudetjewelry.com  or call 541-484-6548

Charles Beaudet

Eugene Weekly’s questions about ethical diamonds is an area I’ve covered here before but in the article  the options have been broadened. The article is by Camilla Mortensen.

http://www.eugeneweekly.com/2011/02/10/coverstory4.html

To be first to see a selection of sapphire or ruby is a heady experience and even after years of being in that select group it make me a little giddy. Many of the stones revealed to me will in the following days be shown to me again by dealers in other venues and at much higher prices. Being first gives me more than a price advantage though, it gives me an understanding of how much of any gemstone will be coming to market and which way the prices are likly to head during the next few months.
For Sapphire Blue is the standard color and oval the standard shape. The other colors and shapes vary by market. The vibrant bluish green of a Columbian emerald is the standard color and you can probably guess the shape. The point is with a few clues a lot can be determined about which way things are going.

Buying better and getting smarter isn’t something I only do in Antwerp I do it in Tucson as well. If there is any Gemstone your interested in and would like me to locate one or more for you. Now is the time. I’m leaving January 29th.
Charles Beaudet

     The quality of the rough changes. I would not have known that! The demands on the cutters changes. I would not have known that! The actual people doing the cutting are not robots they have to achieve what the owner of the rough wants. So if the owner of the rough wants the impossible the cutter struggles to get there.
   The problem is the needs of the owner today are to get something better than what they could expect. (The price of rough material has increased without an increase of wholesale prices) So now computers tell the cutter what to do to get the best grade on a laboratory report. Grading does not deal with durability. It’s only been very recent that it even dealt with beauty. Untill 1995 how well a diamond is cut has been treated as only about one-third of its value. This kept it under wraps (so to speak) . Today it’s 55% of its value and even now the highest grades are too broad because of pressure from the cutters.
   Light only bends to one angle when it enters the stone so there really are not a lot of angles that can work to produce the best results. I grew up believing there were different tastes in diamonds. The American taste for FIRE, The European taste for ICE, and the Indian taste for WATER (the reflections off). Today we all want the same. FIRE. Why? It’s not because we won but only because its the best a diamond can do given it’s properties.
   In Antwerp I spend most my time avoiding problem stones. It takes the longest amount of time because it’s so subtle. I have to look at the reflection off of every facet of every diamond that makes it that far. On a diamond report from a good laboratory they call them comments and then you have to hunt them down. Graining, Surface graining not shown, Twinning, Twinning wisps, Clouds not shown, Needles and crystals not shown. Sometimes a bearded girdle is just a listing and not shown. All of this means something and it does not matter if it’s on a report or that I’m finding it in Antwerp. The choice is either avoid it or ask the customer if the effect of this issue is important to them. If not I can negotiate a price because of it.
I could not do this if I did not know. I would not know if I didn’t go to Antwerp. Honestly, I want to do the best for my customers so I go to Antwerp to learn, to buy and to be sure!  Watch a video—-

http://www.youtube.com/watch?v=93UVYVrLMmI

   If you have any important dates that you would want a superlative diamond to memorialize, call or come in the store soon. Charles Beaudet

reach me at charles@beaudetjewelry.com  call the store 541-484-6548 or while I’m in europe email gemsbjd@gmail.com I’m leaving Oct 10th and will be buying until the 21st.

2849 Oak St. Eugene Oregon 541-484-6548