As diamonds play a role in our everyday lives from romantic engagement rings, delicate jewellery, to even industrial tools, you may have asked yourself why diamonds can command astronomical prices. As one of the leading diamond buyers and experts, we are going to tackle this burning question and explain why diamonds are expensive.
Why Diamonds Are Expensive:
1. De Beers Ingenious Advertising
Founded in 1888, De Beers is one of the worlds leading diamond companies and has pursued diamond exploration and mining across the world. It is largely because of De Beers ingenious advertising that diamonds are the must have gemstone for any bride to be.
Diamond sales fell during the Great Depression into the 1930s as they were perceived as an extravagance for the wealthy to indulge in. De Beers wanted people from all walks of life to fall in love with diamonds, so the company hired the adverting agency N.W. Ayer to reignite public interest in diamonds. In 1947, De Beers debuted their beloved motto, A diamond is forever, which met with massive success and endures to this day. De Beers understood that creating an emotional connection with diamonds was essential to generate sales.
In addition to the creation of their timeless motto, they worked to influence public perception of diamonds and reinforce a tradition of gifting a diamond ring as a sign of betrothal. In the 1940s, De Beers implemented a program where they would visit high schools to teach young men and women about the value and romantic nature of diamond rings.
In the following years, De Beers would lend beautiful diamond jewellery to celebrities and other members of high society which enabled them to provide, stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance. This way, the everyday person could aspire to buying and wearing beautiful diamond jewellery like their favourite celebrities. De Beers aggressive marketing continued into the 1980s, where they launched a series of ads which stated, Isnt two months salary a small price to pay for something that lasts forever?. This ad further perpetuates the notion that diamonds are expensive and are a prerequisite for any marriage
2. Market Demand
Prior to the 1800s, diamonds were considered to be very rare and were mostly found in India and Brazil. However, in the second half of the 1800s, a large crater was discovered in Kimberley, South Africa with a trove of diamonds. With this massive discovery, diamonds could become more accessible to the market, thereby lowering the price of these gemstones. This influx of diamonds on the market would lower the rarity and therefore the value of diamonds. To thwart a decline in diamond prices, De Beers bought the diamond mines in Kimberley.
With ownership of these mines, De Beers was now able to tightly control the global diamond supply. De Beers would only release enough diamonds onto the market to meet annual demand, creating the appearance that diamonds were rarer than they actually were, enabling them to inflate diamond prices. Today, there are about 20 major diamond mines in operation that produce over 120 million carats of diamonds a year, most of which are now unrelated to DeBeers.
3. High Jewellery Store Mark-Ups
If you ever stepped into a jewellery store, youre no stranger to how expensive diamond jewellery can be. Another reason why diamonds are expensive is because jewellers place high mark-ups on their diamond jewellery, which according to Business Insider, is 100% to 200% (known in the trade as keystone for 100% or double keystone for 200%). With the need to carry inventory (some of it very slow moving) and cover operating costs, such mark-ups are a necessary evil.
Online jewellery stores, on the other hand, do not have to pay for a storefront, they can carry virtual inventory (they dont have physical possession of it and can simply order it if they sell it online), they maybe dont need as many employees and some of the other expenses that come with a physical store. This means that online jewellers are able to (but dont always!) offer better prices.
How To Afford Diamond Jewellery
Now that you know why diamonds are expensive, you may be wondering how you can afford diamond jewellery without breaking the bank? The good news is that myGemma is here to help. Sell or trade-in your current jewellery and watches that you no longer wear and put the money towards the diamond jewellery of your dreams.
At myGemma, we are expert diamond, fine jewellery and luxury watch buyers with an international presence. Our team of GIA trained gemmologists have an in-depth understanding of the second-hand luxury market, meaning that we can provide you with strong offers for your pieces.
Selling your loose diamonds, fine jewellery and luxury watches with myGemma is a completely free and painless process. Our secure and trusted service has earned us hundreds of positive customer reviews. Sell in as little as 48 hours, simply complete our online form to get started. When you use our upgrade program, you can even receive 10% more on your offer in the form of store credit with our diamond, watch and jewellery partners, to make buying diamond jewellery even more affordable. Just keep in mind that you will need to add VAT to the final price of the item that you are upgrading to, as US companies show prices without tax included and you will have to pay VAT on the import to the UK.
How To Sell Diamonds
- GET A PRICE QUOTE: Complete our online form with information about your diamonds, jewellery or watches. You will shortly receive an initial price quote from one of our experts.
- GET A FINAL PRICE: To receive your final offer, you can schedule an appointment at one of our comfortable and secure offices or use our mailing service. We can provide you with a free Special Royal Mail Pack which ensures that your diamond is protected, fully insured and trackable. When your pieces arrive, they will be opened on camera and shortly evaluated by our experts.
- GET PAID: We will then contact you with a firm offer and detailed explanation of how we came to that price. You can accept your offer by bank transfer. There is never any obligation to sell and you can have your items returned to you through a free Special Royal Mail Pack.
Click the button below to see how much you can get paid for your loose diamonds, jewellery and watches.
