Sometimes, we see people buying a diamond from the US, rather than locally. Whilst some may say you can save money by buying from the US, which is the biggest diamond market in the world, some say it’s just plain absurd.
So, who’s right? The answer is that is depends on the situation – sometimes it’s better to buy locally, sometimes it’s better to buy from the US.
Diamonds As A Commodity
A common perception is that diamonds are more expensive in countries such as Australia, New Zealand and the UK than they are in the US. Moreover, some people think that the high US dollar will work in their favour. However, diamonds have more or less become a commodity – that is an Australian diamond merchant can buy the same stone as an American diamond merchant for the same price. Unlike other industries, there are no notable “bulk discounts” in the diamond industry, except for smaller diamonds (under 25pts). There may be a few percent here and there, but on a wholesale level, prices are more or less fixed. In addition to this, diamonds are always traded in US dollars, no matter where they come from. For example, when we buy diamonds from Israel, we pay the Israeli supplier in US dollars.
Diamond Pricing In General
One of the main factors in pricing a diamond is the merchant’s stock turnover rate. For example, if I buy a $1000 diamond and expect a return of 20% per annum, I would have to charge $1200 plus overheads if I expected the diamond to sell in a year, but if I expected the diamond to sell in three months, I would only have to charge $1050 + overheads, even less if I bought another diamond to sell and the profits were compounded.
With this is mind, the cheapest diamond will come from whoever is able to minimise their overheads and turn over the most stock. Given that the cost of running a business is pretty much the same throughout the western world, it all comes down to stock turnover. It therefore doesn’t take a rocket scientist to figure out the most cost effective way of buying a diamond is through a brokerage service, like our International Selection.
Benefits of Buying From The US
The main benefit of buying from the US is that you have a better selection. From patented diamond cuts, to the endless amount of designer jewellery. Moreover, since retailers are physically closer to a wider range of wholesalers, you may be able to get more information such as photos and Ideal-Scope images very easily, but bear in mind, only a few offer this service.
When buying from the US, it is important to take into account fees such as:
- Foreign Exchange
- Wire Transfer Fees
- Customs Entry Fee
Benefits of Australia
The benefits of buying in Australia are:
- You can pay by credit card.
- You’re protected by local laws.
- A lot easier returns if something isn’t quite right.
- View before you buy.
- GST rebate if you’re exporting the diamond.
- Quite possibly cheaper than buying from the US.
All This Is Thanks To Technology
In the end, if you are buying online, it doesn’t really matter where in the world you are purchasing from. Communication technology such email, the web and telephones make it easy to communicate. Diamond technology such as Sarin machines, cameras and a host of other tools make buying online just as good as, or better as buying in a brick and mortar store. Modern couriers mean a diamond can be shipped anywhere in the world in under a week. Taxation reform has meant that importing is now easier than ever.