ask Dave West: The Jewelry Expert

Rare Diamond Inclusions

“I inherited my father's diamond ring and am having it re-sized (in this case made smaller). In the examination of the diamond by the jeweler it was noted that there was an inclusion centered in the diamond. This is what appears to be a cloud inclusion with a very distinctive cube shape. My question is, do inclusions ever increase the value of a diamond based upon their rarity? This is about a 1 carat diamond.”

Keith

 

Great question Keith!

 

The size, shape, number, type and placement of inclusions or clarity characteristics (some times called “flaws”) are unique to every diamond and are often referred to as the stones “fingerprint”. While most diamonds will have one or more different types of inclusions the possibilities for nature are endless.

The distinctive clarity characteristics of diamonds are always fascinating to me and there are always collectors and scientists interested in such things – so the potential for an extremely rare inclusion(s) to increase the value of the diamond exists – but that in of itself would be rare.

 

A couple of years ago Sotheby’s had a 3.05Ct. heart shaped fancy yellow diamond with an cross shaped inclusion at it’s center. Apparently this diamond generated quite a bit of interest, especially among Christian groups, and was expected to sell for more than it’s asking price. Although I never did find out what the diamond actually sold for – it is a great example of an inclusion that is both rare and unique enough to be the determining factor in the value of the diamond.

 

Being both a Blake Edwards and Peter Sellers fan I cannot not resist bring up the

wholly fictitious pink diamond that has an inclusion that looks like a leaping panther.

This video clip doesn’t directly relate – but its’ my favorite form the series.  

 

 

 

David W. Nytch CGA  www.westandcompany.com       

On Line Diamond Sales

“What would you consider to be the key success factors of the online diamond industry.  Also, how important each one would be to the industry?”  - Matt

This recently received question is a subject that I have written about in the past, but is still is a relevant and hotly debated issue in the jewelry industry today.

I believe there are four basic reasons for the success of the online diamond sales:

1. Convenience and a feeling of being in control of the buying process.
2. The perception of a better price
3. The perception that diamonds are a commodity and the certificate contains all the information necessary to make an informed decision about beauty and value.
4. No sales tax

Taken individually there is nothing new about any of this – what is new is the combination of all four and the ease of access – virtually anywhere at any time.
The internet has been transforming the industry in ways that are still evolving.

And while I embrace much of this change it saddens me that there are those in the diamond business, as well as in the public, who believe or who want to believe, that the rare and very individual beauty of a diamond can be reduced too, determined and quantified by the numbers, angles, percentages and letters on a piece of paper. The whole of the online diamond industry rests, almost entirely, on a piece of paper.

David W. Nytch CGA www.westandcompany.com
     

   

The many colors of Diamonds

When many people think of diamonds they think of a “white” (colorless to near colorless) diamonds.
For a good reason too, the unequalled brilliance and beauty of a “white” diamond has been treasured for thousands of years. And while diamonds are rare things of beauty - every now and then nature takes it a step further and produces something so extraordinary I am at a loss to describe it – a diamond with color.    

Have you ever seen one of these wonders; a blue diamond, pink diamond, or rarest of the rare - a red diamond? How about a black diamond, or olive, or green, maybe an orange or purple diamond; what about a brilliant yellow diamond or a rich deep brown diamond, a bubbly champagne diamond, or the exotic warm color of cognac diamond. All of these amazing colors occur in varying degrees of purity and intensity – the combination individual color and brilliance is beyond description.

As Yvonne DiVita and I where discussing in a recent pod cast – awareness and demand for colored diamonds is on the increase. The marketing campaign by Rio Tinto’s Argyle Mine of Australia to raise awareness of the “Champagne” colored diamonds along with the increasing quality and availability of enhanced colored diamonds is expanding the way we look at diamonds.

Ask Dave West: Diamonds that Speak to You

Welcome to the second podcast in the continuing Ask Dave West series of talks on fine jewelry and gemstones.

Today, Dave West and Yvonne DiVita discuss the enduring tradition of the diamond engagement ring - and why that will likely never fad away. Dave talks about "diamonds that speak to you" and how he listens for that song, when he's getting ready to create a new piece of sparking jewelry, whether colored diamonds, other fine gems, or traditional white diamonds.

As always, join in by leaving your comments and questions at the end. Thanks!

From Yvonne DiVita and David West Nytch, CGA at West and Company

Ask Dave West: Champagne Diamonds and Colored Diamonds Create New Sparkle

Welcome to the first in an on-going series of podcasts with Dave West and Yvonne DiVita.

Today's podcast discusses champagne diamonds and colored diamonds - and how they are influencing the craftmanship of jewelery for the many occasions we buy gemstones, including engagements,wedding anniversaries, and other special events.

While champagne diamonds are not really new to the scene, the general public is not as informed about them as they are about the traditional brilliant diamond, or white diamond. As Dave will show you in this podcast, colored diamonds are also stirring interest with buyers and are being used to create some stunning jewelry pieces for almost any occasion.  Yvonne DiVita

On-Line Diamond Interview

I recently received an e-mail from a journalism student looking to do an article on jewelry sales online. Laura had some great questions that are well worth posting. So with Laura's permission, here is her original e-mail and my answers.

  Dear David,

I am a senior journalism student at California State University, Northridge, and I am currently working on an article (for grade not for print) about the boom of online sales of engagement rings. I was wondering if I would be able to ask you a few questions on the topic? I would like to include your views in my article.

Below are the questions I would like to ask you if you would like to help me out.

 
1. In my research I discovered that independent jewelry shops rely heavily on the sale of engagement rings as their main source of revenue. What has been the effect on independent jewelry shops since Blue Nile, and others, have opened online websites where people can purchase engagement rings that are less expensive but are the same cut, carat, color etc?

Independents have certainly lost sales to online diamond retailers, however online diamonds sales, while growing, still represent a relatively small part of the growing engagement ring market in the US. And while it may appear that online retailers are offering the same ring for less – they often are not. Diamonds are not the commodity that some would have people believe. By that I mean that two diamonds of similar cut, color, clarity and caret weight are not necessarily equally beautiful. I have looked at more engagement rings that where purchased online than I care to count and while as a general rule (there have been some frightening exceptions), when purchased from a reputable company customers are getting what they paid for - I have, however, yet to see a customer who got the best they could have for their money. The difference is always significant.   

2. Has the popular rise of online jewelry stores affected bigger chains like Tiffany, Zales etc?

I'm sure it has- but to what degree I cannot say. Most of the majors also have effective online stores to compliment their traditional operations – I would think it has been a benefit because their customers too have the best of both worlds at their disposal. This is also true of many independent operations as well.


3. What is the difference in mark up on an engagement ring that would sell in an independent store to one that would sell on Blue Nile?

Markups depend on many factors and are going to vary between different retailers. This is true both for online stores as well as independents. Since most online stores sell “al a carte” vs all inclusive - the way most independents do – the difference is can be insignificant to none at all when its all added up.


4. Buying an engagement ring is one of the most important purchases a man (or couple) will ever make. Apart from the price, why do you think some people are happy to buy, without seeing the actual ring they are purchasing, such an important (and expensive) item?

I have to say that this had perplexed me for quite a while. Having been in this business for 25 years I have to admit I never saw it coming. You have to understand that I have never, nor do I know any jeweler who has ever brought any diamond without first looking at it!
That said I think there are several reasons.
• Most important is that many people have brought into the premise that a diamond is a commodity and diamonds of similar grading are of equal beauty and value. There is also the perception that an independent laboratory report, or “cert”, especially from the GIA, is a guarantee of that beauty and value. This is a fundamental misunderstanding of both the grading systems purpose and the limitations of and the reason for an independent grading report. However misguided - these perceptions are what make online diamond sales possible.
• For years the industry has been plagued with jewelry retailers selling by using misleading tactics and false discounting, which has confused the customer and eroded the faith and confidence of the public in the value of diamonds. Throw in uneducated and bad behavior by sales associates, poor service, shoddy jewelry and the list goes on, it is no wonder that jewelers are no longer perceived, and in many cases for good reason, as professionals that can be trusted.
• Control – I think the internet gives the buyer a feeling of being in control of the situation, instead of having to rely on someone else. There is also a level of comfort in making your decision based on angles, percentages, numbers and letters. It takes the subjectivity out of the equation and makes it like purchasing a car – compare the stats, compare the price. It is the worst possible way to buy a diamond – but I can understand it.    

5. Do you think that buying an engagement ring online takes a bit of the romance out of the whole process?

Absolutely! Just like every woman is an individual – every diamond is an individual. Believe it or not diamonds will “talk to you”. I can look at hundreds of wonderfully beautiful diamonds and a few will stand out to me and talk. This is nothing you can quantify or put on a chart – it is all about individual beauty.
For someone to take time, to look at and compare diamonds, searching for that perfect one – that to me, is the ultimate expression of love.   

6. Do sales associates at retailers, in particular, Tiffany, earn any commission on engagement ring sales? The men I have interviewed say that they opted to buy an engagement ring online after having a negative experience with a sales associate - the name Tiffany popped up numerous times.

It depends on the retailer – some associates are on commission and some are not. I do not know about Tiffany’s – but it is not the first time I have heard the complaint.
As I said earlier – bad behavior on the part of sales associates is a problem; I‘m not sure that being on commission is the only cause.
When shopping for an engagement ring you are really shopping for a jeweler as much as a ring. If you are faced with a negative experience I always recommend you keep shopping – there are many excellent jewelers out there who will make the buying experience exceptional. It may take some work - but the right jeweler will transform the process into what it should be – a wonderful enjoyable experience with results that will exceed your expectations. You can’t get that online.   

7. Is the increase of online sales of engagement rings only in America or is this trend occurring around the world?

I would guess it is, but I am only familiar with the US market.

8. What do you forecast for the future of the online engagement ring market?

I think it will continue to grow for a few more years at least – but I am already seeing some signs of a backlash as more and more people realize that while the internet (like everything) has its advantages - it also has some serious disadvantages when it comes to the purchase of fine jewelry – I deal with the fallout every day.
An engagement ring is not only a very major purchase – unlike any other- it also symbolizes a couples love and commitment, the best results always come with the help and guidance of a trained professional.   

Thank you so much for taking the time out to answer my questions. I am very excited to write this article and will happily email you a copy when it is complete.
 
Thanks again,

Laura

David West Nytch CGA  www.westandcompany.com

Diamond Pricing and Negotiating

My friend Michael Willingham the “Diamond Coach” has a great post on diamond pricing and negotiating. It is worth paying close attention to what he is saying. Mike has many years of experience in the diamond and jewelry industry; in his current capacity as a adviser to those who seek help with their diamond purchases and not as someone who is actively selling diamonds Mikes opinions are especially valuable.

So until next time – that is how I see the world of jewelry from Rochester, NY

David West Nytch CGA  www.westandcompany.com

Buying paper – with a diamond to go with it – continued

So who do you listen to? Me? The guy who wrote a book telling how to supposedly “beat the system”? Some diamond blog or web site? To me the answer is simple – you listen to everybody while keeping an open mind. Then take a hard look at what you are really trying to accomplish. By that I mean are you really interested in getting the very BEST for your money or will you be satisfied by getting your moneys WORTH. To some that may sound like it is the same thing, but it is not.

There is nothing wrong about wanting to get your moneys worth. Companies like Blunenile and Cosco, along with others, have become very successful by giving their customers their moneys worth. But can they deliver the very BEST for your money? That is a different question entirely. 

I recently had a customer come in with a ring from Bluenile. What he showed me was a decent looking 5/8Ct. diamond in a four prong platinum solitaire. He had asked for the diamond to be set very low because his fiancée was a nurse and he was worried about the diamond catching on things, which is a very valid concern. This was one of the most awkward looking rings I’d seen in a long time. Worse prongs are prongs and are going to sometimes catch on things no matter what. The thing is he could have had, for the same money or slightly more, a ring that was made to have the diamond set low and in a way that it would not only look great and show off the diamond, but also would not catch on things. Did he get his moneys WORTH? Absolutely – Bluenile delivered, at a reasonable cost, exactly what he had asked for. Did he get the BEST for his money? Not by a long shot. In the end, however, he was satisfied with his purchase and choose to keep it. So for him, buying paper – with a diamond to go with it, was OK. He seemed content with getting his moneys worth.

Around the same time I sold a 1.00Ct. Ideal Cut, F SI2 diamond to a gentleman who, when he came in, said he would not accept a clarity lower than a VS1! When I asked, as I always do, why VS1 the answer was simply I wanted to make sure it was a nice diamond so I wanted to stay to the “better half of the chart”. This is exactly where buying paper can get people into trouble. No matter how good the cut, color and clarity look on a grading report it is not a guarantee that it is a good looking diamond. Diamonds need to be looked at and compared as individuals along with all the other aspects of the sale like the mounting and the budget that has to be worked with. When I showed him a drop dead gorgeous diamond that just happened to be a SI2, when he realized that an SI2 is not necessarily an awful clarity grade and he had more cash to put in the mounting he wanted – it was a done deal. The result is a ring that his wife is being constantly asked to show to total strangers and whose coworkers are jealous of. Now in my opinion that is getting the BEST your money.

Until next time that is how I see the world of jewelry form Rochester, NY

David West Nytch CGA  www.westandcompany.com

Buying paper – with a diamond to go with it.

In the jewelry industry it is called “buying paper”. Buying paper refers to anyone whose diamond purchasing decision is based on a lab report and price. It is not a complementary phrase.

I have touched on this subject in my Top Ten Jewelry Buying Tips and on my post about Certificates, but I felt the need to expand the subject a bit.

For starters a bit of background on certificates, lab reports or grading reports as they are called. A diamond certificate is a grading report on a diamond; it gives information on the Cut, Color, Clarity and Carat weight (the 4Cs) of a diamond. There are two general kinds – a store report, which is issued by the seller themselves or a grading report from an independent gemological laboratory.

Now the benefit to both the buyer as well as the seller of a, fully independent, non biased evaluation of a diamond is obvious. When viewed in their proper context diamond certificates are a very important part of the buying process – it is when they are misused as the definitive statement of quality and beauty that has led many astray.

When ever I sit down with a diamond customer I always keep in mind how hard and confusing it must be. A diamond is a very major purchase; there is a lot to familiarize yourself with, few brand names to compare, all sorts of contradicting information, it is no wonder that increasing numbers of customers find security in a independent, objective, reporting of quality and thus the reasoning goes beauty, that the certificate seemingly offers.

The GIA grading system, developed in the 1930’s, for Cut, Color Clarity and Carat Weight, which has become the worlds standard, was necessary because there had to be some kind of objective standard for everyone to group diamonds of similar characteristics. It has been a wildly successful system. I can talk to anyone in the world about a diamond and have a pretty good idea of its relative quality and if the price being asked is reasonable. BUT and this is a huge BUT, I don’t really know until I actually LOOK at it. In the end beauty cannot be wholly quantified by letters, numbers, percentages and proportions.

There are plenty out there who argue that what I say is complete and total BS, I’m just trying to sell at a premium. When you look at skyrocketing growth in internet diamond sales in the last few years (there is talk that Bluenile will soon reach a billion in sales) it is obvious that savvy marketers have tapped into the public’s perception of and frustration with the diamond buying process.

The general publics willingness to embrace a diamond certificate’s grading report as the definitive statement on quality, beauty and value was a gift from heaven for internet diamond retailers. Without peoples willingness to accept the premise that diamond buying was as simple as comparing paper and price internet diamond sales would not exist.

So who to believe? More on that later – till then, that is how I see the world of jewelry form Rochester, NY

David West Nytch CGA  www.westandcompany.com

Canadian Diamonds

We have recently started carrying a new line of Canadian Diamonds called Caprice. This is very exciting for me because the Caprice diamonds are among the very finest Canadian diamonds I have seen; which is saying a lot. There is something about Canadian diamonds that I have always loved, it is hard to put my finger on it, but they just radiate a clear crisp brilliance that you don’t often find even in the best of diamonds from other sources.

Caprices parent company is Backes & Strauss which was founded in 1789, is the worlds oldest, and one of the most prestigious, diamond companies in the industry today. Backes and Strauss have a long history of attention to detail and excellence in cutting, which is being applied to the Canadian Caprice diamonds with amazing results.

I love anything that stands out from the crowd and Canadian Caprice Diamonds do just that in a big way. Now all I have to do is get busy making some great jewelry to set these wonderful diamonds in!

And until next time, that is how I see the world of jewelry from Rochester, NY

David West Nytch CGA  www.westandcompany.com