How to Buy a Diamond Online

Posted: 12/12/16 10:51pm
There is a huge amount of information online about diamonds, engagement rings, and how to purchase one online or at your local retail jeweler.  While there is no right or wrong way to purchase a diamond, one that has received tremendous attention is the online purchase.  For some, the potential savings of an online purchase from internet retailers like Bluenile for example is too great to ignore.  I’ve been involved in every aspect of the jewelry industry during my 28 year career and have seen every possible way to purchase a diamond. In this article I will give you my unbiased advice on how to purchase a diamond online and save.  Please read on and I will share everything I’ve learned while selling over $40,000,000 in diamonds and jewelry.

Why is there Such a Broad Range in Pricing for the Same Quality Diamond on Bluenile?

For the purpose of this article we’ll cite the example of Bluenile as our internet diamond supplier, the largest online jewelry retailer in the world.  We’ll be searching for a 1.00ct round diamond that’s GIA certified and has a quality grade of SI1 with an excellent cut rating. This is the most often purchased diamond shape, size, and quality and will serve as the best example.  I’ve gone to Bluenile and performed a search for this diamond and received a list of 77 diamonds that fit this description. The lowest price on the list was $4804.00 and the highest price was $7438, quite a huge spread I’m sure you’ll agree.  So why the difference in price?  One could safely assume that they should all be priced at exactly the same amount correct? After all, they’re all exactly the same diamond right?  No. This is where you begin the learning process, every diamond is uniquely different even if the quality grades are identical and the diamond is GIA certified.  Diamonds are graded by humans not machines, this means there is no such thing as a repeatable result.  I’ve sent the same diamond back to GIA to be certified on two different occasions and got entirely different grades.  Compounding this dilemma is the fact that no two diamonds are exactly like, just like snowflakes.  The imperfections in a diamond are never the same, their intensity, number, and location are always different.
 
So what conclusion can we draw from this?  We can concluded that there are poorly graded diamonds and accurately graded diamonds. There are weak SI1 clarity grades and there are weak H color grades.  Unfortunately you have no way of knowing if the diamond that you’re considering online is a weak grade or an accurate grade.  However, there are tricks and indicators that will help you eliminate what I like to call the runts-of-the-litter.


The Lowest Price Means the Crappiest Looking Diamond.

Diamonds are valued based on a many different characteristics and thinking that the color & clarity grade is the end all be all for the valuation is a huge mistake.  There’s something that you need to understand in order to make sense of all this information…..diamonds are valued based on beauty!  Diamonds that are beautiful, have a crisp appearance, and are more brilliant than other comparable diamonds are worth more that duller less shiny stones. This means it doesn’t matter if two diamonds have the exact same certifications from GIA or any other grading lab for that matter.  Ask yourself a question…..”Why are the exact same diamonds different prices on Bluenile?” It’s because some are much more brilliant, some are more accurate grades, and some simply look nicer. Bluenile owns almost none of the diamonds it lists on its website.  Bluenile is simply a broker, diamond wholesalers across the world list their diamonds on Bluenile for sale.  The wholesaler determines how much they want for the diamond and Bluenile applies a markup. In almost every case, Bluenile never sees the diamond or inspects it for quality assurance prior to you purchasing the diamond.  Take for example the 1.00ct round SI1 H listed for sale at $4804, the cheapest of all 77 for sale on Bluenile.  This diamond is the cheapest amongst all the diamonds listed for a reason, the diamond wholesaler may know it’s substandard and that there’s something wrong with diamond. He or she may be compelled to price it lower in order to get rid of it, hoping to attract someone’s interest because it’s cheap.  Some of the issues with this diamond could be that it’s foggy and lacks brilliance or that the color and clarity grades are poor or inaccurate.  Remember, these diamonds are graded by humans not machines….humans make mistakes!  When working with customers I always ask them if they want to own the nicest looking diamond they can buy or the cheapest diamond they can buy.  Using our example search, choosing the cheapest 1.00ct round SI1-H diamond on Bluenile may only guarantee you the crappiest looking diamond in its class.  If you’re still not a believer than ask yourself a question….”Why are the majority of the diamonds within this search priced at $5300?”

How to Narrow Your Results & Choose Wisely

So we’ve determined that the lowest price diamond is most likely a bad decision or at very least a risky purchase.  What about the diamonds that are priced the highest within the Bluenile search results?  I think it’s safe to assume that for whatever reason the 1.00ct SI1-H diamond listed at $7438 within our search results is an error of some sort.  Some data entry clerk could have entered the wrong amount or transposed numbers before uploading their diamond list to Bluenile. This can be the only explanation for why this particular diamond is priced at nearly 35% more than median priced diamond of $5300.  So my best advice to you is to do this……eliminate the lowest price diamonds in the search results because we know there has to be something wrong with them.  Then eliminate the highest price diamonds within your search results because we know there has to be some sort of error in the pricing.  That leaves us the middle of the pack, focus on the price range where there are the most number of diamonds within that range.  For example, if 75% of all the diamonds within our search results are nearly the same price ($5300 in our test search) it is safe to assume that this is the correct price.  These are diamonds that are mistake free, correctly graded, and probably the nicest looking diamonds within the search.  Remember, diamonds are valued based on grading accuracy and beauty!  If a diamond supplier thinks his diamond is crappy looking or knows that the color and clarity grade isn’t correct he may price the diamond significantly lower.  Why would you want to buy a problem child?  Why would you want to buy the crappiest diamond your money can buy? Isn’t this what you’re ensuring yourself when you choose the cheapest diamond within Bluenile search results?


Beware of Diamonds from GIA India.

Most people don’t know that diamonds accompanied by GIA certifications come from labs located in New York but also in India.  It’s is a widely accepted opinion amongst jewelry industry veterans that diamonds having GIA India certifications are suspect.  I’ve seen diamonds with GIA certifications from the lab in India that were very poorly graded and in most cases over-graded. This means the buyer of such a diamond may not receive what they’ve paid for and they could pay more than they should. Here’s another problem, at the moment there is no designation on GIA certifications to indicate whether the diamond came from GIA India or GIA USA.  If you’re shopping online you could easily purchase a diamond with a GIA India certification and never know it.  You can eliminate the risk of buying such a diamond if you follow this trick….check the delivery dates of the diamond!  I’m writing this article and performed my diamond search on 10-25-16, if you look at the delivery date of the lowest priced diamond in our search you will notice that it is 11-4-16.  That’s a 10 day delivery for this diamond, why so long?  If this diamond is in the US shouldn’t it be delivered to your door the next day?   It’s a 10 day delivery because it’s probably out of the country and if it’s out of the country there’s a good chance it’s in India. If it’s in India, then it’s very likely it has been certified by GIA India and in my opinion this should be avoided at all costs.  You may be very disappointed with the look of the diamond when you receive it.  Let’s assume my suspicions are correct and it has a GIA India grading report, wouldn’t that explain why the diamond is so cheap?


About the Author

Andy Moquin is a 28 year jewelry industry veteran, he purchased and sold over $40,000,000 in diamonds throughout his career.  He specializes in engagement ring design and is an expert at diamond grading and selection.  You can follow him or contact him for advice at:
www.andrewsjewelers.com
www.facebook.com/andrewsjewelers
https://twitter.com/andrewsjewelers  

for media inquiries or questions call him direct at 716-630-7091



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