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James Allen, Blue Niles Are Just Middle Men?


cnn
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Hi all. First let me just say that this is a wonderful forum with heaps of information for anyone interested in diamonds.

 

Now on to my question. I had a look at a few online diamond dealers and found the main ones that I most probably would feel more confident and safe enough to order from then others, namely;

 

James Allen

Blue Niles

Mondera

 

To be really sure I was wondering if anyone have any idea if James Allen and the other two are merely middle men taking orders off the net or phone and dispatching them to third party manufacturers to do all the actual setting of the stones, resizing of rings, delivery and stuff like that or do they have their own people doing all that? What is the business model like?

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No one seems to know? I meant to post this in the rock FAQ section, not sure how it ended up here. Sorry for the mistake.

 

I moved it earlier this evening.

 

The most likely reason you haven't received any answers is because it was invisible, stuck in the moderation queue of the FAQ section all day after you posted it there. Hopefully, you will receive a few answers, perhaps even from James Allen themselves which do frequent this forum, though I will note that it is the weekend before Christmas so many of the jewelers will be very busy.

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No one seems to know? I meant to post this in the rock FAQ section, not sure how it ended up here. Sorry for the mistake.

 

I moved it earlier this evening.

 

The most likely reason you haven't received any answers is because it was invisible, stuck in the moderation queue of the FAQ section all day after you posted it there. Hopefully, you will receive a few answers, perhaps even from James Allen themselves which do frequent this forum, though I will note that it is the weekend before Christmas so many of the jewelers will be very busy.

 

 

Thanks for that hermann :blink:

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‘Middleman’ is a terribly disparaging term that completely overlooks the value being added by merchants. A typical diamond ring will involve a complex cocktail of sources including miners, cutters, shippers, importers, bankers, labs, photographers, appraisers, equipment manufactures, bench jewelers, tax collectors and many others. These things are NEVER all done by the same individual so, by definition, there are going to be some ‘middlemen’ involved. This is not necessarily a bad thing and ‘cutting out the middle man’ is not, in and of itself, a reasonable objective without considering what they will be replaced by.

 

Most of the stones and jewelry designs you see listed at the 3 sites you picked are supplied by some other company. The sellers are generally not in possession of the goods until you agree to buy, and maybe not even then. When you buy something, they contact the diamond supplier, order in the stone, order in the mounting and have the bench jeweler set and size it. This is likely to be 3 different companies an they are serving as something of a general contractor for the project. If you have several diamonds involved, there may be even more participants! For custom designs, the setting supplier and the bench jeweler are usually part of the same firm.

 

At least JA and BN both have ‘signature’ series stones and jewelry as well. I don't know much about Mondera. These are items that they have exclusive control over, either because they own them outright or because they have a contractual relationship with their suppliers. These may or may not be in inventory but they often are. Ring them up and ask if you have questions about a particular stone and they should be able to tell you if they have it in hand or not.

 

As far as I can tell, none of these companies is running a mining or cutting operation so I guess the short answer to your question is yes, they are middlemen. In most cases, the bench jeweler doing the setting sizing work is probably also a contractor, not an employee. This is the case at the majority of jewelry stores and mass merchandisers as well. Does it matter?

 

Neil

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Great points Neil!

As far as I can tell, none of these companies is running a mining or cutting operation so I guess the short answer to your question is yes, they are middlemen. In most cases, the bench jeweler doing the setting sizing work is probably also a contractor, not an employee. This is the case at the majority of jewelry stores and mass merchandisers as well. Does it matter?

In fact, we all must buy from some sort of "middle-man"

Unless you are a cutter who bought from the miner.

The largest "lists" come from people who buy from the cutters.

 

I think there' a distinction between a seller using a list, and one who actually has the diamonds in hand- I think this matters tremendously.

 

Look at it this way- when wholesale buyers look thru cutters' productions selecting diamonds, it's a crap shoot.

Instead of a list, they look thru parcel papers.

They are labeled with pretty much all the info you find on the lists.

Shape, color, Clarity, Weight, pol/sym/table/depth/fluorescence.

For me, it's not till I open the paper that any meaningful judgement could be made.

 

A round diamond probably offers the best odds - in my experience a diamond of 60% table, 60% depth, minimum of "good" on GIA's Pol and sym, will appeal to me in as much as 85% of the ones I've seen.

That's if one wants a beautiful round diamond.

If they want an "Ideal" round, the desires are more specific, and the odds drop down below 50%, in my opinion.

If we're talking about any fancy shape- the odds for me, with most cutters, is well below 50%.

Pear Shapes, Ovals, Asschers, Cushions, Princess Cut, Marquise, Radiant Cut, Emerald Cuts.....can't be boiled down to measurements.

 

 

 

Mass merchandisers offer the least attractive option, for someone concerned with quality.

When John's Jewelers buys carat sized diamonds, how many do they need to buy?

A very active store might sell 100 in a year.

They start with a nice inventory, and buy , selectively, throughout the year.

When "Gimbel's" ( lets say it was a 100 store chain) needs to buy carat stones, they need to buy 250- at one time.

There's no way they can be as selective.

 

cnn- I believe that Neil is correct -some of the sellers have some exclusive rights to diamonds- still they vast majority of the diamonds listed on the sites you're most comfotable with will be shipped from someone other than the seller.

 

Blue Nile sells more diamonds online than anyone else- by a huge margin. I can understand your comfort there.

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