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Online Diamond Retailer Questions


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Hello all,

 

I'm about to launch an exciting online diamond website based in Australia www.engagediamonds.com which will feature great "russian cut" diamonds at fantastic prices, I'll be stocking mainly ideal cuts.

 

Prior to launching I'd like to ask the following questions of diamond savy consumers;

 

1. Is price the main factor for selecting a diamond online?

 

2. Are you mainly concerned with grade (4c's) including the cut grade or is "flash for cash" what online consumers are after; that is to say the biggest, cheapest diamond.

 

3. What other factors would you consider important in your diamond selection?

 

4. Are there any drawbacks to the currently popular online diamond retailers?

 

 

www.engagediamonds.com

Edited by Engage Jewellery
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Hello Paul, and welcome. I'm not a consumer, or at least not posting here as one (though I consume my fair share). As a frequent poster here (and mostly "answerer of other people's questions"), I can offer some quick observations.

 

1. Depends. For some it is, for most of those coming to forums like this one, price is more of a constraint - they don't want to be ripped off, but are happy to pay more for better quality.

 

2. Again, it varies. For the majority of those posting questions, cut (which BTW is one of the 4 Cs) is a big factor, particularly on fancy cuts. However, those posting here are definitely a small minority of the diamond buyers universe - which is why Blue Nile is so big (and we do well but are several orders of magnitude smaller).

 

3. Personal answer: Dealer's honesty, credibility/expertise and character. Level of service offered (from "this is it - don't even ask for anything else" to "what can we do for you today?").

 

4. Yes, but you cannot bundle together all online retailers. They have very distinct strategies and each carries advantages and drawbacks.

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Thanks Davide for your excellent reply.

 

I should expand the second question (which I've reworded);

 

-I've noticed that many of the online retailers use what I would consider certificates from inferior grading laboratories inflating diamond grades. I will try to only use the industry leading grading labs (GIA, AGS, HRD for instance).

 

In your opinion, Is the quality of the make the primary motivating factor for most consumers? Are consumers informed about the differences between labs grading systems or is a certificate from any lab enough? Are consumers interested solely in the "biggest, cheapest" diamond or is make still an important consideration too?

Edited by Engage Jewellery
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I'm not a consumer either but I interact with a LOT of people who shop online for diamonds so I feel reasonably qualified to inject a few thoughts. Not everyone has the same criteria but there are some common things that drive people to the Internet.

 

Transparency. Diamonds are a blind item, they're crazy expensive, and people fear getting ripped off. the Internet is chock full of things that fuel this fear but the storefront retailers are even worse. They visit a local store, google up a few comps to see if the deal is ok, and walk away shaking their heads. They want a straight deal from people who provide the truth, the whole truth and nothing but the truth. It's amazing how rare that is.

 

Selection. Jewelers are, by their nature, very limited in how many stones you can look at. The online guys have this problem too, in fact it's worse, but it FEELS like they've got a zillion stones on display because you're already involved in the interface.

 

Ease. If you live in a rural community or you're a bit of a shut in, it's a significant hassle to go shopping. The Internet is easier, it's often faster, and it usually costs less.

 

Price. Internet based jewelers usually have lower prices, even when you factor out all of the bs with bogus labs, shipping fees and the like. Sometimes it's by a lot. Even more importantly, peoples perception of Internet shopping is that everything there is a deal because of their experience with ebay, amazon.com and other successful online ventures. This is a double edged sword. People tend to think of jewelers and especially Internet jewelers as interchangable. They'll use their computer to shop your prices far more aggressively than they ever would at your store and if you aren't price competitive, it just takes one click and you're dead without ever knowing what happened.

 

In my opinion, Internet shoppers are far more inclined than storefront shoppers to go for the high end makes. Why? They can't see the stone and they want assurance that it's not a dog. If they see it in the store they're much less concerned that some lab liked it, they can see for themselves that THEY like it.

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Thanks so much Neil for your quick reply.

 

I think you bring up some prudent observations especially in your opinion that online shoppers are more concerned with high end make than "storefront" consumers.

 

In terms of "selection" do you think that having a vast inventory is a good thing or do you think it means people find it harder to make a decision? That is to say, if I have 20 diamonds in a persons grade critea that might differ by a few percent in terms of table diametre ,do you think this makes a consumers decision harder than if there were only 1 or 2 diamonds?

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It depends on the style of your store. People seem to love to use the diamond finder here and similar places to look for a fairly narrow set of specs, say 1.00-1.05/F/SI1/round and see 1,000 stones to choose from. How they get from that to the one that finally gets a sale is a tough question and I'm sure think tanks all over New York would love to have an answer. On the other extreme there are 'concierge' type dealers who NEVER present a stone without going through an interview with the client first and then they go out and shop for the perfect stone for you. As Davide pointed out a few posts ago, there is a large variety of Internet shops and they do not all have the same strategy. I would NOT recommend a simple knockoff of Blue Nile's business model although Australia does seem a bit light on that sort of thing.

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How would you improve upon Blue Nile's business model? They've recently expanded to Australia.

 

My retail business, Engage Jewellery, is a "concierge" style store so I guess I'm looking to retain as much integrity in my online diamond site, Engage Diamonds, as possible. I'd like to focus on fewer, better quality diamonds. Would this be your strategy?

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Probably. Especially if you've got an existing business that you're expanding on.

You need a business plan.

I would not strive to improve on BN’s model or even to necessarily capitalize on their weaknesses. They are a large and well known outfit, they are easy to buy from and it’s a very comfortable shopping experience. They have good products, good presentation and nearly everyone who shops there goes away happy. They have worked very hard to build their position and have invested tens of millions of dollars developing their brand and their business processes. They are tough competition. With EVERY business it’s important to understand what your own ‘value add’ is and then to capitalize on it. What’s yours? They are far from the only one out there. Do a Google search for ‘discount certified diamonds’ and you get something like 300,000 results. A fair number of these are flat out clones of BN with tens of thousands of ‘virtual’ diamonds listed for sale and a selection of mountings from some supplier they’ve hooked up with. Why would someone buy from YOU? Why do they buy from you now?

Have you shopped the competition? Name 10 that are successful and see if you can figure out why they are succeeding. Here are just a few examples that come to mind:

Exceldiamonds.com

Diamondsbylauren.com

Whiteflash.com

Jamesallen.com

JBEG.com

Langsantiques.com

NADB.com

Uniondiamonds.com

USAcerteddiamonds.com

Abazias.com

Truthaboutdiamonds.com

Diamondconcierge.com

Niceice.com

These are very different sorts of operations. All are selling diamonds online in a fairly big way and NONE are what you would call a clone of BN.

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