Pricing
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Diamond price list aims to clue in consumers
By Michelle Graff
February 09, 2010
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| Consumers who want to make sure they are paying a fair price for diamonds can now find out at the new Web site DiamondSRP.com. |
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New York--When consumers want to know how much they should pay for that new Lexus coupe they've been eyeing, they know exactly where to find the information before they buy.
Some members of the diamond industry believe that consumers should have similar research tools for purchasing diamonds.
That is what prompted the International Diamond Exchange (IDEX) to recently launch a suggested retail price (SRP) list for diamonds, housed at DiamondSRP.com.
IDEX, along with the World Federation of Diamond Bourses (WFDB), introduced the concept at the WFDB's 2009 Presidents' Meeting, held in November in the diamond trading center of Antwerp, Belgium, and at a subsequent presentation at the diamond-trading bourse in Ramat Gan, Israel.
The key concept behind the site is to make diamond consumers feel more comfortable throughout the gem-buying process, says IDEX Group Chief Executive Officer Abraham Stern.
"The No. 1 goal of this whole thing is to increase confidence and reduce confusion and intimidation," he says.
While still in the development phase, the site currently allows consumers to enter a desired carat range, color and clarity for both rounds and fancy shapes. They can also download a detailed price chart that covers a range of sizes, colors and clarity grades for round- and fancy-shaped diamonds.
Stern says that prices are only available for natural, colorless diamonds with grading reports, and that consumers should consider the listed retail prices to be the maximum they should pay for those stones. For example, a consumer using the site to price a fancy-shaped diamond between 1.5 to 1.99 carats, F color, VS2 clarity, would learn that the maximum he or she should pay is $11,582 per carat, at least as of Feb. 1, 2010.
Also available on the site is a methodology page, which explains to consumers the formula IDEX uses to calculate prices.
Stern says there is no human intervention involved in the process, and IDEX has asked major accounting firms to review the system to ensure it is completely unbiased.
The service is free and open to anyone, he says.
Retailers need only pass the URL along to customers or pull it up on a store computer for consumers to see.
Industry analyst Ken Gassman, who helped IDEX and the WFDB develop the tool, says he has pitched the concept to a few retailers so far.
One of the biggest complaints is that because the site gives the highest possible price, it makes jewelers look like a bunch of discounters.
He points out, though, that in retailing, discounting is a way of life; everyone selling cars and houses openly gives buyers a deal. His advice to retailers is to pitch their price as a savings, not as some kind of midnight markdown madness.
"When retailers really understand this, they'll point consumers to Diamond SRP," Gassman says.
Eventually, the developers hope that the list becomes a household name as Edmunds.com or the Kelley Blue Book are for consumers searching for automobile pricing guidelines.
"We want to be the Edmunds of the diamond industry," Gassman says.
As for those who might say that the diamond industry already has plenty of diamond pricing information available to consumers-such as through online retailer Blue Nile, both Gassman and Stern say the Diamond SRP list gives the full picture.
Gassman says the idea is not to compete head-to-head with online diamond giant Blue Nile but to simply be another information source for consumers.
"We hope that if consumers are shopping in a store, that they'll look at this price list and Blue Nile and say 'the price ought to be between the two,'" he says.
Stern says that eventually the site could contain a "find a jeweler" type of feature that would allow consumers to enter their ZIP code and find nearby retailers who would have to pay to have their names pop up on the screen as local sources for a certain stone.
As for now, however, IDEX is working to get the word out about the Diamond SRP list, and is also asking IDEX members to give their thoughts on the list by filling out a feedback form on DiamondSRP.com.
This story first appeared in the January 2010 print edition of National Jeweler.
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Pricing
Imports and exports of both rough and polished diamonds increased for the fifth consecutive month in the diamond-trading center of Antwerp, Belgium, with per-carat prices for diamonds growing robustly, statistics released Wednesday show. Read More
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