Diamond Sales Process

How Do Diamonds End Up for Sale in Jewelry Stores

 

Anyone can buy any diamond, at any jewelry store if they can afford it.  Diamonds come in all prices, so most people can afford diamonds.  It is a matter of how fancy someone wants to get.  The fancier the diamond, the more the diamond retailer will ask for it.  All that sounds simple.  But how did the diamonds actually arrive to the jewelry store?  What is the chain of events that makes diamonds available?  That is what this article is all about.

There are four main participants in a diamond transaction.  Learn more.  These participants form part of the diamond sales value added chain.

• End User
• Jewelry Retailer
• Diamond Dealer
• Diamond Wholesale Dealer

 

Now that we have the players in the diamond business clearly defined, diamond transactions will be more easily understood.

For the sake of simplifying the explanation of the diamond sales process, we will use an example.  Lets assume that an end-user, that greatly enjoys diamonds, and can afford something really nice, wants to buy another nice diamond.  So this is not the person that would buy a diamond at Costco, chain mall store, or some such place.  We are going to call this end user “the customer”.

When a customer such as described above wants a diamond, their point of contact will be with most likely a jewelry retailer.  However, customer that are big on diamonds, often prefer to work with diamond dealers, because that is a more specialized service.   If they deal with a jewelry retailer, it will be a very well equipped one, ready for dealing with high-end diamonds.

Given how expensive diamonds are, retail jewelers and diamond dealers often only have a few diamonds on inventory.  Chances are that the customer will want a diamond that is not in inventory.  To fulfill this need, diamond dealers and jewelry retailers work with wholesale diamond dealers.

A wholesale diamond dealer has established business relationships with jewelry retailers and diamond dealers.  When dealers and retailers need a diamond, they reach out to the wholesale diamond dealer.  Chances are that, since diamonds are natural products, the wholesale diamond dealer has a diamond that closely match the requested need.  If this is the case, then the wholesale diamond dealer will ship the diamond, as per requested, to the jeweler or diamond dealer.  If all the homework has been done right, the customer buys the diamond, and the wholesale diamond dealer gets paid after the sale.  If not, the diamond is returned.

In essence, in many of this transactions, the retail jeweler, or diamond dealer, sells the diamond to a customer, prior to buying the diamond from the wholesale dealer.  So it is not brokerage.