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Blue Nile


Mr.Question
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A friend of a friend relayed the following story to me: He said that he visited several spots in the NYC diamond district, looked at multiple diamonds and when he finally chose one he took the number incribed on the diamond, called Blue Nile, and got a price that was $1,000 better (in this case $16k as opposed to $17k).

 

Does this actually happen? Can you view diamonds in person and then get the EXACT same diamond online? It struck me as something of an urban legand but if it's true I feel sorry for the brick and mortar folks.

 

Best,

 

Harrison

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Thank you very much; this is very interesting. I was under the impression that the diamond industry functioned as a collection of several small, exclusive inventories held by different sellers and not one large inventory to which each seller has access. I understand this is a simplification but it's still somewhat surprising to me. Again, thank you for the help.

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Mr Question.

 

It is neither.

 

Many wholesalers offer their inventory lists to re-sellers, retailers, e-commerce retailers etc.

Many retailers own their own inventories and supplement with wholesale lists.

Many do not.

Many wholesalers try to straddle both sides of the fence and do both "wholesale" and retail....but that's a whole other story.

 

Regards,

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Yeah, it happens and yeah, the jewelers get pissed over it but it’s often not what you think.

 

Many of the diamonds you see in the marketplace are owned by someone else entirely and will be offered for sale to dozens or even hundreds of dealers. The big Internet houses will take this offer, mark up the price a little bit and post it for sale as if they owned it. If someone buys it, they order in the stone and make the deal. If no one is interested than nothing happens and no one ever knows or cares where it actually is.

 

To some extent the local jewelers are doing the same thing. Most don’t carry much inventory when you get into that price point and will order in a stone in on consignment from one of their suppliers when a customer comes in and requests it. This allows them to get exactly what is needed without investing millions in inventory. If you buy the stone they take their commission and if you don’t they return the stone to the seller where it waits for another request, either from that store or from somewhere else.

 

Sometimes these two systems overlap when the owner has offered a stone for sale to BN and others. When they shipped it to the jeweler they didn’t ‘undo’ the offer to the other folks and it takes a while for these databases to update in any case so their ads just stay up. One thing is for sure – if your jeweler has the stone and someone buys it online, they aren’t going to get it unless your jeweler cooperates. The owner can strongarm them into giving it back and then quick ship it to you but this behavior is unlikely to result in any further business from that jeweler. More often what happens is that someone will see the ad online and try to buy it, the online jeweler will figure out they can’t get it and will offer something else as an alternative. Alternatively, people will print out a copy of the online advert and show it to the jeweler in order to beat him up on price before actually buying it. Often this works, especially if it really is the exact same stone but this too does not bode well for future business for that wholesaler from that jeweler.

 

Neil

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Yeah, it happens and yeah, the jewelers get pissed over it but it’s often not what you think.

 

Many of the diamonds you see in the marketplace are owned by someone else entirely and will be offered for sale to dozens or even hundreds of dealers. The big Internet houses will take this offer, mark up the price a little bit and post it for sale as if they owned it. If someone buys it, they order in the stone and make the deal. If no one is interested than nothing happens and no one ever knows or cares where it actually is.

 

To some extent the local jewelers are doing the same thing. Most don’t carry much inventory when you get into that price point and will order in a stone in on consignment from one of their suppliers when a customer comes in and requests it. This allows them to get exactly what is needed without investing millions in inventory. If you buy the stone they take their commission and if you don’t they return the stone to the seller where it waits for another request, either from that store or from somewhere else.

 

Sometimes these two systems overlap when the owner has offered a stone for sale to BN and others. When they shipped it to the jeweler they didn’t ‘undo’ the offer to the other folks and it takes a while for these databases to update in any case so their ads just stay up. One thing is for sure – if your jeweler has the stone and someone buys it online, they aren’t going to get it unless your jeweler cooperates. The owner can strongarm them into giving it back and then quick ship it to you but this behavior is unlikely to result in any further business from that jeweler. More often what happens is that someone will see the ad online and try to buy it, the online jeweler will figure out they can’t get it and will offer something else as an alternative. Alternatively, people will print out a copy of the online advert and show it to the jeweler in order to beat him up on price before actually buying it. Often this works, especially if it really is the exact same stone but this too does not bode well for future business for that wholesaler from that jeweler.

 

Neil

 

Thank you, Neil. I find your posts extremely helpful.

 

In a completely seperate matter, I'm in the market for 1.5 - 2.0 cwt asscher cut diamond for an engagement ring. I don't need the stone to be a perfect but I'm not looking to "just get by" either. I've looked at some online sellers to get an idea as to price and plan to meet with some B&M folks as well, but am interested in your professional opinion as to what the ballpark should be.

 

Again, thank you (and all of you) very much. I've found all of your posts very edifying.

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If you’ve read my posts for a while, you surely will notice that I never give ‘ballpark’ answers even though I get asked this regularly. Each stone and each deal needs to stand on it’s own merits. There’s a highly competitive marketplace attached to this forum behind the ‘find online jeweler’ button near the top of the page where you can enter in a few specs and get back some offers. It’s tricky, especially with fancies to know if you’re comparing apples to apples but this can give you a good idea of what ranges to expect and also you can play with it to get a feel for what happens when you adjust one attribute like color, size or lab. The tough one is cutting and for that you just have to look at a bunch of stones and learn to see the difference. My favorite Asschers have a ‘hall of mirrors’ sort of look to them that doesn’t show up on the list of lab specs. Not surprisingly, the best looking stones tend not to be the cheapest ones on the list and, personally, I think good cutting is worth paying a premium for.

 

For this sort of stone the stocking dealers have a huge advantage because they can look at the stones and give you a real opinion of the cutting and the storefront dealers have a double advantage because YOU can look at them too. Online, as I’m sure you know, tends to be a bit less expensive and it’s up to you to decide if the potential savings are worth the logistical headache of paying to ship things around, hiring an appraiser, waiting while FedEx does their thing and quite possibly doing this more than once. For big stones like this the savings can be quite a lot and many would answer that it’s definitely worth the trouble but it will depend on your local jeweler. Some are a lot better than others. Choose your dealer carefully. Even if the prices are good and the return program reasonable, shipping, inspecting and returning a series of stones is a frustrating experience. It's way better if you can communicate well with the dealer about what your objectives are and they get it right the first time.

 

Neil

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