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Local Jeweler Vs. Two Online Brokers


Charlie5
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Hello all. I've been referencing this forum in my diamond search for some time now. I'm searching for just the right 1.25-1.5 ct. round diamond, and have a question about my local jeweler's prices vs uniondiamond.com and brilliance.com.

 

I am looking for a 1.25-1.5 ct round, brilliant stone with the following:

 

- D,E,F color

- VS1-SI1 clarity

- class 1A cut dimensions

- EX polish and symmetry

- No flourescence

 

I am not as afraid of EGL grades as most people are, IF I can loupe it. In comes the problem with searching for the best prices, which seem to be had online.

 

I have the following on hold at my local jeweler right now.

1.25 D SI1

6.84 x 6.81 x 4.26

Depth - 63.4%

Table - 56%

Polish- EX

Sym - EX

Fl - None

 

I know this puts the cut at a 2A bc it's a little deep. This diamond is EGL graded and has a price is $9,900. I believe it to be a true SI1 as it has one light cloud on the table that is not visible without a loupe. I've actually louped VS2's that have looked worse. I've also sat it next to GIA graded D stones in direct and indirect light and agree on the D color. Now I'm no expert, but I'm no dummy either. I've looked at a lot of stones, both GIA and EGL.

 

Ive seen many stones on the two websites that I've mentioned with D,E color, SI1 or VS2 clarity, class 1A cuts, EX pol, EX sym, No fl for $2000-2500 less than my jeweler is asking.

 

My question is.... Is it worth the risk of buying these online stones, being EGL graded, since I cannot loupe them myself? Also, how reliable are the 30-day return policies of these sites?

 

Thanks,

Charlie

Edited by Charlie5
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My question is.... Is it worth the risk of buying these online stones, being EGL graded, since I cannot loupe them myself? Also, how reliable are the 30-day return policies of these sites?

 

Thanks,

Charlie

Hi Charlie,

 

Well, you’re basing the grading entirely on your own observations and those of the dealer, who may or may not have actually ever seen the stone, so I’m not sure where I can direct you. I’ve never seen any of the stones being considered either. We pretty much know that GIA won’t call it the same as what EGL did, otherwise it would already have a GIA pedigree, what’s missing is how much difference there is. It ranges anywhere from 1 to 6 grades depending on the stone and the lab involved. You're apparently confident in your own grading skills so ship it in and take a look.

 

How reliable are the return policies of the sites? That depends on the specific site. You’re not doing business with the Internet. You’re doing business with a particular jeweler who advertises on the Internet. The difference is important. They aren’t all the same and some are more reliable than others. FWIW, I would trust both of the ones you listed to honor their return policies but I again point out that you are 100% relying on the jeweler for the grading information. That's a big deal. I presume you’ve vetted them to decide if you are willing to consider working with them in the first place. If you haven’t, do that FIRST. The same thing applies to your local jeweler by the way. They are not all the same and they are not equally deserving of your business.

 

It’s entirely possible that the store you’re shopping with locally can get the very same stones that you’re seeing online. If you like one of those better and prefer to work with them, show them the ad and see if they can get it.

 

By the way, the ‘cut class’ that you’re using is seriously obsolete. If you’re interested in the cut grade (and you should be), use the GIA or AGS scales. They aren’t exactly the same as each other but they are wildly different from the one you’re using. The fact that a selling dealer is using this system is NOT a good sign.

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My local jeweler is NOT using the AGA cut grades that I've mentioned. Nor are teh online jewelers. However, I believe these cut grades to be a good gauge between actual percentages. I'm not getting caught up in anyone's "hearts and arrows" speech or "super ideal" cut grades here. I've been to those jewelers and walked away laughing.

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My local jeweler is NOT using the AGA cut grades that I've mentioned. Nor are teh online jewelers. However, I believe these cut grades to be a good gauge between actual percentages. I'm not getting caught up in anyone's "hearts and arrows" speech or "super ideal" cut grades here. I've been to those jewelers and walked away laughing.

Use whatever scales you like and shop for whatever criteria suits your fancy. I agree that there's lots of nonsense that gets wrapped into sales pitches but don't throw out the concept that cutting matters, if only in setting the price. Precision cutting isn't a big deal for everyone and if you're not into it, by all means don't waste your time and money on it, but don't kid yourself into thinking that you'll sneak into getting a 'premium' stone by using a different scale to shop and luck into a dealer who doesn't know any better. EGL stones were sent to a particular EGL for a reason. It wasn't to save you money, it wasn't to save on lab fees, and it wasn't because the dealer was a fool. At the end, someone is sure to walk away from this deal laughing, but it may not be you.

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I'd be less worried about the return policies - you have deleted the names of the two dealers you are considering (why???), but assuming they are well known outlets you should not have any problem.

 

A bigger issue is that you seem to believe that you are getting "a deal" out of EGL graded stones. That is extremely unlikely, particularly on a grade that carries a substantial premium to the nearest one (e.g. D vs E).

 

If the stone were likely to get a "D" from GIA, it would be marketed with a GIA report: the price of 1.20-1.30 D/SI1 GIA-graded stones is ~$11,000. The average price for EGL-graded stones is ~$6500. Cost of a GIA report for that size stone: $100. Clearly there is something else that is "different" other than the report, otherwise I'd have a wonderful business buying diamonds at $6500, investing $100 and getting $4400 each back.

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davidelevi - I did not remove the names of the dealers/brokers that I am considering. They are in the first paragraph of my post.

 

denverappraiser - I don't think I'm fooling any jeweler here. And I AM interested in getting the best quality AND brilliance that I can for my money. Cut proportions are cut proportions, GIA or EGL. That's where the brilliance comes from, first and foremost. We all know that. That is why I am concerned with finding cuts in the AGA class 1A range. If there is a better scale out there, then by all means please tell me.

 

After cut, my next concern is obviously color and clarity. This is where the GIA vs EGL debate comes into play. I'm interested in return policies because I have GIA graded stones at my local jewler that he will allow me to compare to. Again, I'm no grading expert. But if two stones look VERY close to me under a loupe and nearly impossible to distinguish to my naked eye, then I'm going with the less expensive of the two... whether it be EGL over GIA or online broker over local dealer.

 

Lastly, I'm not buying a certification for purposes of trading in or trading up later at a higher yield. She will keep this ring/stone forever, because that's just how she is.

Edited by Charlie5
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The two cut grading scales I count as reliable are AGS and GIA, in that order. Both have their issues and they take a different approach from one another and both take a completely different approach than the AGA system. GIA has a simulator online at www.facetware.gia.edu that free and helpful in considering some non-GIA graded stones.

 

Downgrading clarity and/or color as a way of bringing down the price is an entirely reasonable approach and nearly every shopper does it. The problem, as you correctly identify, is that EGL does not use the same grading scales as GIA and AGS. Sometimes G means G, but sometimes it means H, I or even J. SI2 and SI3 almost always mean I1, etc. The stone is whatever it is, but the description is different, and the price is set based on that description. That's the shopping problem. It's common to compare stones with similar sounding grades and notice that one is being presented at a discount, but the discount is an illusion since it's discounted from an inflated grade.

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Apologies - I missed them. With neither dealer you are going to have quibbles when returning a stone, as long as you follow their process.

 

The point on cut proportions that Neil is making is that AGA class cut proportions are NOT the best way to assess brilliance (which incidentally is only one of the aspects that matter). GIA and AGS cut grades are more comprehensive and less prone to false positives. Other, more sophisticated methods including scans and reflector images are also available, but not to all dealers and in some cases not to the consumer at all (a Sarin analyser costs several tens of thousands).

 

You are not buying a report; you are buying a diamond - we are all agreed on that. Nor does a GIA report help you considerably in reselling a few years down the line, and you can always get one for a hundred bucks if you find you need it. The problem - which we don't seem to have communicated well - is that fair price depends on details that may not be visible to you, but are visible to a trade buyer.

 

Given that there is no difference in the cost (or $50, which on a $10,000 stone is nothing) between GIA and EGL, and the choice of either paper to market the stone is a very deliberate one by each dealer, ask yourself why they are choosing to market a stone with that particular report. There are very very few bargains, and "shopping" EGL vs. GIA is not a way to find one.

 

ETA: cross-posted with Neil

Edited by davidelevi
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I knew that GIA took more into account than EGL when determining cut grade (i.e. not just table, depth, and girdle). However I was unaware that the two reports are so close in cost. I though GIA reports were much more expensive to obtain. Thank you for educating me!!!

Edited by Charlie5
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From the horse's mouth...

 

http://www.gia.edu/lab-reports-services/fees_payment/lab_fees/index.html

 

EGL will be about half the price, though they don't publish fees as GIA do.

 

Another factor is waiting time - which for GIA is now over a month, vs. less than 2 weeks at EGL. But still piffles when you are talking thousands and thousands of difference in price.

Edited by davidelevi
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Thanks again guys.

 

All that being said...

How can I get the best price for a particular diamond from my local jeweler?

 

Yesterday I did this (in a very respectful and courteous manner):

- Took prices and specs on 15-20 diamonds to my local jeweler and showed him what I could get at brilliance.com and uniondiamond.com

- Asked him to come within 5% of these prices on extremely comparable diamonds (I know... I'm fishing here)... and I'll buy from him

- Offered to pay him 10% over these advertised prices if I bought these diamonds myself and he'd allow me to compare them to his diamonds (GIA and EGL) so that I could return and re-select within the 30 days if I was not happy with what I received

 

He seemed insulted at first, but then agreed when I elaborated on my business proposition and also offered to buy the setting upfront, which we had already settled on a couple days ago.

 

Here is my reasoning:

His prices on extremely comparable diamonds (according to reports and inclusion diagrams) are about 20% higher.

If I buy from him at 5% over what these diamonds are listed for on these websites and pay the 6% sales tax, I'm still saving about 9% over his best offers so far.

If I buy from the websites myself and pay him 10% to allow me to compare to his diamonds, then I'm saving about 10% over his best offers so far.

 

DISCLAIMER: I know I'm not buying a car here and comparing reports isn't the best way to buy a diamond (especially EGL)... but it's where I have to start if I'm considerign online diamonds that I do not have in front of me.

Edited by Charlie5
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That should work just fine.

 

FWIW, most of the 'generic' sorts of stones you find online are coming from 3rd party sellers who are offering a virtual consignment system to the dealer. It's true the at the online guys are pretty price competitive folks but they're not charities either. They're making a profit too. The jeweler can quite possibly sell the exact same stone and make 5-10% PLUS whatever commission the online guys are getting. Sales tax, of course, is out of his control. It is whatever it is in your community, and theres another caviat there since you brought it up. If you buy online, you still owe the tax even though the seller isn't obligated or even permitted to collect it. You're supposed to submit it yourself. Rules on how this works will be on the website of your home state revenuers and they vary quite a bit from state to state. They're not likely to nab you for it directly if you don't pay but if you ever get audited for some other reason, this is one of the things they specifically look for and they pop you for penalties and interest as well as the taxes. This has become a serious source of income for the states and, in case you haven't been reading the papers, the states are hurting for money. :o

 

Also bear in mind that there are costs associated with bringing in and returning diamonds for you to look at in the form of shipping, insurance and the like. Be prepared to pay some costs for stones that you don't choose if you're going to look at a bunch and compare.

Edited by denverappraiser
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It's a fair negotiating tactic. And it's a win-win - although if I were the jeweller I'd be more inclined to let you compare and get a good commission than selling you something at a discount level that may be very marginally profitable. At the end of the day, running a high street store IS more expensive than a pure drop-ship operation.

 

Another option for you to consider is instead of looking (only) at "super discounters" like Union or Brilliance (or Blue Nile, or Salomon, or...), also look at some of the online dealers that offer greater service in terms of selecting diamonds and providing information (photos, videos, Sarin scans, etc.). For example, BrianGavinDiamonds, DBOF, Excel Diamonds, GoodOldGold, HighPerformanceDiamonds and a few others. This will carry a premium compared to "baseline" (and even then, not necessarily on all stones), but it will significantly decrease the burden on you to make judgement calls that may be risky.

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