the big benefit of buying in the islands is that its 'duty free'.
People seem to respond well to that gimmick because they are
'beating the man'.
THE most important lesson to know in the diamond business is that
all diamonds are the same price. Yes, you heard that correctly - all
diamonds are the same price, all over the world, every nook and
cranny. That is obviously not literally true, but it is essentially
true and here’s why:
DeBeers (actually the CSO) doesn’t have quite the stranglehold it
once had, but it has plenty. Just about everybody it doesn’t control
outright has contractual agreements with it.
As a matter of policy, the CSO sells all goods to it’s sightholders
at the same price. Which is to say that it won’t play favorites, and
F/SI rough goes at the same price to everybody in every parcel. From
there, a good half of the sight might be sold right off to the
secondary market. All those sales are going to be at roughly the
same markup because it’s a competitive marketplace. Those that
aren’t dumped get cut, all at the same price, again because it’s a
That is to say that all the New York cutting is at New York prices,
all the Belgian is Belgian, etc. Obviously.
Then the finished goods are sold, all at the same markup, because
it’s a competitive marketplace. And we have finished diamonds, all
at the same price, all over the world.
Clearly, that is not to say that each and every stone is precisely
the same price - that’s ignorant. It IS to say that if I buy a one
carat, F/VS diamond for $5,500, and I buy it above a certain echelon
in the pecking order of dealers (some “wholesalers” are actually
virtually retail), that nobody is going to get the same stone for
$3,000. Those people in the Virgin Islands are paying $5,500, just
as I am. Yes, maybe it’s $5,250 on a given stone. But it’s not, and
it CAN’T be, $3,000.
And what THAT means is that if you are presented with two stones of
the same numbers - F/VS - or a shopper who tells you of a
competitive stone that’s 30% cheaper, then there’s a reason. The
grading is misguided or fraudulent or more often than not it’s an
off make. Somebody showed me a (30% cheaper) stone from Blue Nile
and was a recut - the stone was chipped and had been re-bruted and
the girdle (which was about 1 1/2mm thick) had been repolished.
Looked like an OEC… As always, volume buying gives an edge, and
the estate/used market is a significant difference, often. Buyer
beware, as always - if it sounds to good to be true, etc…
Ain’t no free lunch in the diamond business…