Rule of thumb for marking up diamonds

I was wondering what is the rule of thumb for marking up (wholesale)
on pieces with diamonds? I know that if it is a large stone, like for
an engagement ring or something, you shouldn’t really mark up the
cost of the stone when setting your price, only the metal and other
materials…correct? But what do you do in the case of pave’ or just
smaller stones in general. Is it the same rule of thumb as with a
large diamond, or should you mark up as you would the cost of your
other materials? Actually I am now also wondering whether or not it
is customary/acceptable to markup stones anyway (no matter what
type…diamonds or not). In the past I have marked up the cost of my
stones (not diamonds), but I have not done very many pieces with
gemstones…I am now wondering if I may have over priced my

I was wondering what is the rule of thumb for marking up
(wholesale) on pieces with diamonds? 

If your in business for love then dont mark them up. if however you
are in business for money then you should mark them up. To put it
simply if you are providng a product to your customer that you have
bought in and not created yourself you lower the margin. I add 25 to
30 % on most goods. Under $50 (au) and I double it. So a created
coloured that costs me $4 will get charged out at $8. The retailer
that I sold it too (I am a wholesaler) then sells it for $20. Every
one makes money that way. Oh and if the customer supplies the stone
they get charged more for setting. Typically $10 instead of $6 or
$8. All prices quoted are in Aussie bucks.

Merry X-mas everyone.

There is a cost to you simply for being accessible, then there is a
cost to you for getting a diamond to where you are (time, phone
calls, postage, knowing who to call, and hard won experience), and
then there is the risk that you expose yourself to. The diamond may
get stolen in the post or simply disappear. That will be your problem
to sort out. It may not be the correct specifications and will need
returning and replacing.

You must charge the customer for doing the above at least. If you
wish to remain in business and be available to the customer at a
future date then charge at least double the above. If you wish to
have some money in your pocket and live off what you are doing, then
double it again.

Small low-cost items are marked up a lot because the hassle per
dollar is greater. Small expensive items become competitive in the
pricing and the markup must be looked at more carefully.

You must charge the customer for doing the above at least. 

Well, I sell diamonds to make a profit…Simply put: I charge
$1200-$1800/ct. for melee and baguettes that cost me $500-$850/ct.
That seems like a lot, but for 20 points it comes to $100 profit or
something. I rule-of-thumb at around $1000-$1500/ct. markup on center
stones, maybe with a premium as they get bigger and finer. I had
$8,000 on a 3 ct. lately, and it was competitively priced, but it was
a $50,000 stone… On centers I go to Blue Nile and price it under
them, sometimes (not difficult), and make more than I would if I
didn’t look. If it should happen that you get into the mid to high
six figures, you’re going to top out at the mid-five figures in
profit, no matter what the cost - nobody’s going to pay you $100k to
sell a diamond, if they are informed buyers. The more any stone
costs, the lower the percentage you’re going to make, though the net
profit will rise dramatically. 10% of 10,000 is 1,000, 2% of a
million is 20,000 - like that.

Its something to start as a guideline, its 5 years old. With pricing
being so transparent today, markup may vary in location.


0    $300	3 times
300 - 800	2.75 times
800-1500	2.5
1500-3000	2.25
3000-5000	2.00
5000 & up	1.5-1.75

These are bottom lines Diamond Margins:

1/4's & 1/3rds				2.25
1/2					2.00
3/4					1.75
1ct					1.5-1.65
2ct & 3ct				1.33
4ct & up				1.50
Natural Colored Dias, no negotiations.	2.25

Loose color gems 3-4 times

David S. Geller

David wrote a book… In January I’ll be setting up a 5 carat
natural pink - I’m not selling it, just making something for it. The
margin is only 2.25 in somebody’s rather vivid imagination. Davids’
numbers are actually pretty good, for a start, but it’s only a
start. I would suggest using them for smalls, and for anything
serious look at your memo and then go to Blue Nile or others (your
customer is) and see what the competition is doing. I had three
2caraters at a price that just weren’t ringing their bell, and got a
fourth at a bargain price. I didn’t use a formula, I priced it at
the other stones, allowing for the specs - made $12,000 on that one.
Good luck selling a $6k cost 1 carat for $9.9k, as the above
suggests. I’ll undercut you day in and day out and brag about it,
and I won’t be the cheapest.

The point being that pricing diamond centers isn’t that easy, unless
you’re in major production and cost averaging. They are priced
individually from the factories, and you need to know what’s what. I
usually know which stone is the candy, and put a little more juice
on it - more often than not I’m right. As one of our more successful
retail partners said the other day, “The point is to sell