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working with jewelers on price


Guest LauRNicu
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Guest LauRNicu

i have read through your descriptions of reading the certificate and then used the pricefinder. your recommendation would be to spend about 3,300 on the quality of diamond i am interested in. however, at most local jewelers and online companies i have found, the listed price would be closer to 4,000 or 4,500. how do i talk them into selling it for a lower, more appropriate price than what they have listed?

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Many of the prices you see listed online are for just that, online purchases.. In general, brick and mortar stores have more overhead, a large building, staff, and on and on and they may need to charge more simply to stay in business.. You are also paying for the convenience of being to hold and look at the diamond before you give out your credit card number..

 

That said, it is possible for a great many B&M stores to be very competitive with online pricing.. All you can do is go in and tell them that you saw a similar diamond online for $xxxx and want to know if they can get closer to that price.. The worst they can say is no..

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Although I've been looking at diamonds for only a few months, I've learned from various people that the markup on diamonds can be very high -- whether online or through brick and mortar stores. The best weapon in your arsenal is information. You can determine with a reasonable degree of certainty by playing with different variables (e.g. the 4 Cs, depth, table, etc...) Some are obviously more important than others, and prices seem to vary less if the primary variables are close or identical.

 

The bottom line is not to feel pressured into buying. Think about buying a diamond as if you were buying a car. Do your homework, visit stores only to look (no matter how good the "deal"), and then determine the price you're willing to pay. At that point, you can buy with confidence.

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Jay,

 

Dealer markup is a subject of a fair amount of misinformation on the internet. Naturally, each dealer can set their own prices based on their own situation and they aren't all the same, but the vast majority aren't making anything like the kind of money that’s generally assumed. Some of this perception is of their own making because of the tendency to list a 'regular' price so that they can then sell at a special sale price that’s considerably lower. Some of it is because people expect all stores to be the same and if they find one store that charges a lot, they assume that all others will do the same. The fact that the overpriced store doesn’t seem to be making many sales at that price doesn’t come into play.

 

They make it even worse by distributing ‘appraisals’ that report astronomical values on what they sell. If a store were able to actually realize these prices, they would have a truly enviable markup indeed. Many of the online and TV dealers will cheerfully underscore this by selling against supposedly comparable prices at some mythical jewelry store and many of them are just as bad or worse about distributing bogus appraisals to defend what a great value you got.

 

It’s widely believed that dealers are getting 100%-200% markup on diamond sales. For the most part, this is pure nonsense. I know stores that will sell on single digit margins and there are precious few that can get more than about 30% on diamond sales. It’s true that the average online store will be less expensive than the average store on the street for loose diamonds but all of this averaging can lead to trouble. Look at each deal for what it is.

 

Just out of curiosity, what would you consider to be a reasonable markup on a diamond where the dealer's cost is, say, $2,000?

 

Neil Beaty

GG(GIA) ISA NAJA

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It’s widely believed that dealers are getting 100%-200% markup on diamond sales. For the most part, this is pure nonsense. I know stores that will sell on single digit margins and there are precious few that can get more than about 30% on diamond sales. It’s true that the average online store will be less expensive than the average store on the street for loose diamonds but all of this averaging can lead to trouble. Look at each deal for what it is.

 

Just out of curiosity, what would you consider to be a reasonable markup on a diamond where the dealer's cost is, say, $2,000?

I'll back that up.. We would be thrilled to be able to get a 25% markup across the board.. But that just isn't going to happen these days in a competitive market.. Of course the scale slides a little based on how large the purchase is.. But, in general, the margin is higher on lower cost goods because the overhead involved stays about the same whether we are purchasing a $500 stone or a $500,000 stone.. 20% on a $500 stone is almost not worth the effort, while 20% on a $500,000 would send us all to Hawii for a month ;)

 

One of the most niportant things to remember when you see these 50% and 75% off sales.. No one will sell it to you at that price if they are going to loose money.. So, it they say it's $10,000 marked off 75% and only $2,500, you can probably bet that it's only worth $2,500 (or less) to begin with.. This is simply a function of marketing..

 

Many people have become conditioned to expect to get a 'deal' or to haggle over pricing.. To make sure that there is a profit the price is set to cover the haggle difference.. How many people here have sold a used car and put one price on it but expecting to sell it for a lower price??

 

All that said, it is your money and you are in power when it comes to purchasing anything.. Never think that the seller is in charge, all he has is something that he wants to sell.. He needs you more than you need him..

 

Steve

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