Looking to buy a diamond engagement ring? This article explains how a diamond’s journey influences its price – and how you can save on your engagement ring when you understand the process.
WHY are diamonds so expensive? A big part of the answer, of course, is because they’re extremely rare, beautiful and durable.
However, most people don’t realise that a diamond’s price is also determined by the number of stops it makes along the way from the mine onto your finger.
How diamond production really works
Let’s have a quick look at the different stages of diamond production. Remember, these 6 stages happen before a diamond reaches a jewellery retail store:
- FORMATION: Your diamond formed over 3.2 million years beneath the earth’s crust, under extreme volcanic heat and pressure.
- PROSPECTING: A diamond prospector spent decades travelling and analysing terrains before finding the mining site.
- MINING: A mining company employed hundreds of thousands of hours of manpower, machinery and fuel on extraction and sifting.
- SORTING: From the mine, your diamond was sent to a sorting centre. It was inspected and placed in one of more than 12,000 categories.
- CUTTING: Next, your diamond was taken to a lapidary and cut into its final shape, and polished to a fine sparkle.
- SIGHTHOLDER: Your diamond finally travelled to a special diamond wholesaler, called a Sightholder. Sightholders also provide one of the vital checkpoints for the Kimberley Process to ensure your diamond is ethical.
Each of these above processes is a necessary must. Without them, we’d have no diamonds. You, as a consumer, cannot change the costs involved during the above 6 phases.
However, the next stage is where things get really interesting for consumers.
By being savvy about the wholesale-to-retail phase of a diamond’s journey, you can really save on your engagement ring.
Diamond retail in the UK
According to Statista.com, during the six-year period between 2008 and 2013, UK jewellery wholesalers showed an average annual turnover of about £1.5 billion.
Jewellery retailers, on the other hand, turned over an average of £6 billion per year. The difference is almost six-fold.
The overheads of running a high street jewellery store – premium shop premises, staff, display furniture, security – do count for some of the difference.
What these statistics don’t explain, however, is why two diamond rings that are apparently alike can cost £2,000 in one jewellery store and £12,000 in another.
To fully understand this, we need to look the additional processes diamonds undergo during the wholesale-to-retail phase.
How to save on diamond retail costs
There are several things that may happen to a diamond after wholesale – and before you wear it on your hand. But each time your diamond exchanges hands, more cost is added to your jewellery. To avoid these costs, you need to understand the following 5 points:
COST #1: Outsourced manufacture
We can all agree that good jewellery craftsmanship is worth investing in. You want your engagement ring to last the years. However, many jewellery shops outsource manufacture. This raises markup and transport – which you’ll ultimately pay for.
HOW TO SAVE: Cut out the middleman. Find a retailer that crafts their own jewellery. If they carry the manufacturing costs in-house, and pass some of those savings onto you, you’ll be saving a bundle.
COST #2: Diamond certification
Solitaire diamonds, typical in engagement rings, usually come with a diamond certificate. This means your jeweller has sent the diamond to be assessed at an independent gem laboratory. A diamond certificate doesn’t change the value of your diamond, it simply provides proof of its quality. It’s an intricate and expensive process. So it’s good to know there are alternatives if certification is not a big priority for you.
HOW TO SAVE: Instead of a certified solitaire, buy a diamond ring that’s made with lots of small, uncertified diamonds clustered together. Rest assured, as long as you purchase your ring from a trusted jeweller, you’ll get the diamond quality promised. No reputable jewellery store will risk its reputation by claiming a diamond is something that it isn’t. To shop with peace of mind, check the store belongs to the UK’s National Association of Jewellers.
COST #3: High street premises
Running a jewellery store isn’t cheap. The costs will be added onto your jewellery. The more luxurious the store, the more staff it employs, and the better their high street location – the more you’ll pay for your diamond ring.
HOW TO SAVE: Go on the web. Online jewellers don’t have storefront overheads.
COST #4. Glossy advertising
Large designer jewellery retailers spend millions on branding. That’s fine, if you’re happy to pay for the name. But if you’ve seen a designer or high street jewellery brand advertised on TV or in a magazine, remember that a considerable chunk of the money you pay for your engagement ring isn’t for the diamond – it’s for the company’s marketing budget.
HOW TO SAVE: Buy from a small, independent jeweller, instead of a large brand.
COST #5. When there’s more than one seller
For a jewellery store or manufacturer to be able to purchase large quantities of high quality diamonds at a reduced price, they must have what’s known as “buying power”. This isn’t just about having capital. It means having strong relationships within the diamond industry – and with wholesalers.
Not every jeweller has buying power. Therefore, many shops order their jewellery from brands. Some source diamonds through second- or third-tier sellers. When this happens, each time a diamond is sold by a seller, there’s an added markup on it.
Finally, many large jewellery brands have huge diamond buying power. But they don’t necessarily pass those savings onto you because of their marketing and shopfront costs.
HOW TO SAVE: Find a jeweller with buying power. Good indicators are: (1) a vast range of products (2) high diamond qualities on offer, from top commercial grades to the highest colour and clarity quality (3) they craft their jewellery in-house.
In conclusion: how to save on your engagement ring
You may be a traditionalist who wants to splash out two month’s salary (an average of £3,900 in the UK) on your engagement ring. Or you may prefer to spend £500.
Your budget is entirely up to you. How much you spend is not the crux of the matter. The real question is, how much value are you getting?
If you want to make a considerable saving on a high quality diamond ring, the smartest thing to do is find a private online jewellery retail store that buys diamond directly from wholesalers and then makes their own jewellery out of them.
In other words – the shorter your diamond’s journey from the mine onto your finger, the more you’ll get for your budget.