Decoding Diamond Pricing

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The diamond price tags that are littered with zeros make us double check. But have you thought about how these prices come about? What determines the cost of the beautiful diamond ring that you fancied looking through the showcase glass? We will help you decode that.

Diamond pricing is set in place by suppliers and diamond cutters. Not just that, but the market and the supply-demand also go a long way in determining the final price. The price of the diamond starts from the mines from which it is extracted. Diamonds are obtained from mines all over the world, in its rough form. These are then sold off at auction houses which are called sights.

The diamond manufacturers that buy them off at auctions are called sight holders. At times during the year, these sight holders attend rough diamond buying auctions and purchase them. This is the first time that a diamond has a value attached to it. All in all, the process of manufacturing diamonds is a costly affair. The diamond manufacturers have to employ skilled labor and technology to ensure that the diamond comes to its final resting form with most of its beauty intact. Now, you would be in the notion that these manufacturers set the price- that is false.

To help in regulating the prices of diamonds, and to standardize diamond valuation, an organization called as Rapaport comes into the picture. This organization meets with all of the rough suppliers, manufacturers and retailers, and finally determines the supply-demand in the market. Based on the findings, the organization releases a weekly report called the Rapaport Pricelist. The list has the wholesale diamond prices for all the combinations of clarity, color and carat.

From this point on, the manufacturers provide the pricing for the diamonds that they circulate in the market. This price is either a discount or a mark-up of the wholesale price set forth by the Rapaport Pricelist. The prices of the diamonds will vary depending on the Cut, Clarity, Polish, Length-Width ratio, Fluorescence and symmetry among others.

However, the scene has changed with the standardization set by GIA (Gemological Institute of America) with the market becoming very competitive. There are several other factors that determine the final cost of diamonds, as diamonds are unique and you will never find two diamonds that have the exact same structure nor inclusions in them.

It is all of this that ensures that you have the best diamond ring for the right price tag sticking to it.

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