Use the 4Cs to Find Bargains
Good-deal diamonds have been overlooked in the frenzy to find the
The most popular diamond category, the 1-ct. G VS1, could be compared
with the most desirable dates for the high school prom. Everyone wants them.
And once you've found them, you've got to pony up serious bucks.
Shortages in this category have resulted in prices inching up 2% to 5%
since January. De Beers' tight control on supply for over a year indicates
the trend will continue in the near future.
Diamond prices in most other categories have reflected a "buyer's
market," but many believe a reality check is in the offing; shortages
have already been seen in a series of midrange categories. Still, bargains
exist for every category in each of the 4Cs: color, clarity, carat and cut.
Let's take a look at each category to find the hidden bargains.
At Jewelers of America's Diamond Day during the JA International Jewelry
Show in January, dealer Jeff Fischer of Fischer Diamonds, New York City,
said price lists have made whiter goods more well-known and more popular.
Supply and demand dictates they're also more expensive. "Retailers
should try to cultivate lower colors among consumers," he says. But
the cut must be good in order to persuade consumers to take a lower color
"There is more merchandise in the J-K-L range versus a scarcity
of F-G-H-I colors, which are so desirable," says Richard Drucker of
The Guide,a pricing publication based in Northbrook, IL. "If
consumers are willing to sacrifice one or two color grades and accept more
color, there could be some savings. The very top stones, such as D-E colors
combined with VVS clarities, are negotiable, so there is some bargain-hunting
in the high-end categories as well, he says.
A recent Rapaport Diamond Reportreflected a 60% price differential
between a 1-1.49-ct. round G VVS2 at $7,000 per carat wholesale and a 1-1.49-ct.
round K VVS2 at $4,400 per carat.
This category is a little more dicey. However, Sheldon Kwiat, Kwiat, New
York City, says the biggest shortages are in the SI through VS categories.
Therefore, opportunities are available in the VVS range on the high end
and the I category on the lower end. Drucker agrees: "Right now the
SI category, especially combined with good color, is the easiest to sell
and the hardest to get." On occasion, if he is checking lists of diamonds
available for sale, Drucker notices the difference in price between an SI1
and a VVS1 is often negligible. "There are some bargains for better
stones, just because the market demand for a slightly lower quality is so
high," he says.
Larger diamonds sell briskly in the United States because of the healthy
economy, dealers say. The demand has created shortages, with diamonds in
the 1.5-1.75-ct. range the most difficult to find, which then causes the
prices to rise.
For dealers, owning a large stock of good-quality diamonds is a positive
move right now. "Larger and better stones in any shape are a good buy
because they sell those are stones I can turn quickly," says
Eli Haas, president of the Diamond Dealers Club of New York City and of
his own business, ENH, New York City. Haas sees shortages starting because
the market is firming up substantially. "It's an ironic force of nature
that buying irresistibly gravitates toward those items that cannot be found
easily," he says.
What's truly available on the retail side of the market? Remain open
to diamonds under a carat and away from quarter-size markers, such as diamonds
in the 0.85-0.9-ct. range. A few points of weight lower than a standard
such as 1 carat can mean a 70% difference in price per carat.
"It really is a situation of demand and supply," says Brian Gavin,
president of Alpha Diamonds, Houston, TX. "Right now, H VVS goods are
plentiful in average and reasonably good makes." However, Gavin, whose
company sells Ideal cuts or what he calls "super Ideals," with
Hearts and Arrows symmetry, says the advantage lies in being able to sell
a branded item of excellent cut quality. Still, for jewelers seeking bargains
to pass on to customers, unbranded near-Ideals are definitely the cheaper
by Robert Weldon, G.G.
Copyright © 1999 by Bond Communications.