Wholesale Diamonds

Consumers looking for value often turn to sellers who advertise themselves as "wholesalers", implying that the consumer is purchasing from the same source a retailer would, thereby eliminating the middleman. However, in diamonds as in most products, the truth is somewhat more complicated.

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Traditional Wholesale

Wholesale is the (often) tax free purchase of large quantities of goods for eventual resale. Therefore, by definition, the sale of a single item directly to an end user fails on each count. The meaning of the term "wholesale" has been blurred in recent years by use in retail businesses such as wholesale clubs; in many states it is now illegal to use the term "wholesale" in advertising taxable products to consumers.

In short, unless you have a personal connection with a manufacturer (cutter) of diamonds, who allows you to purchase direct and tax free, you are not buying wholesale.

Traditional Retail

Retail sales are (generally) taxable transactions made to end users of a product or service. While a traditional retail sale carries a higher price than wholesale, it is often accompanied by value added services such as:

• Personal, professional service
• Generous return and exchange policies
• Flexible payment terms (the use of credit cards, deposits, layaways, etc.)
• Product warranties and guarantees of service

Lumera: The Best Of Both Worlds

Lumera is not primarily a wholesaler. The majority of our sales are to end consumers. When a retailer does purchase from Lumera, the pricing and terms are the same as they are for an individual consumer. Where Lumera is most similar to a true wholesaler is in pricing. The average markup on a GIA certified Lumera diamond is less than 9%, which means the end consumer is paying very close to a true wholesale price (the price charged by diamond cutters around the world). This compares favorably to a traditional jeweler, which might mark a diamond up 100% or more. See the comparison below for more information.

While Lumera pricing follows a wholesale philosophy, we also offer valuable services and benefits more often associated with a better retailer. These include: 30-day returns or exchanges, free shipping, quality guarantee, lifetime trade-in, and refer-a-friend. Lumera is able to offer this compelling blend of wholesale and retail attributes by taking a unique approach to diamond sales.

Lumera vs. Traditional Jewelers

Often, customers will assume the reason Lumera has lower prices is driven by quality or service compromises. In reality, the difference is primarily due to the lower cost structure for Lumera vs. traditional retailers, especially in the areas of occupancy, selling, and inventory costs.

The table below illustrates the difference between the Lumera and the traditional approach. The traditional retailer estimates are based on information provided from four large public jewelers. For a typical diamond (1.50 ct. GIA Round, H color, VS2 clarity, EX cut):

Traditional Lumera 1 Retail (Purchase) Price of Diamond $18,000 $10,860 2 Actual Cost (to Retailer) of Diamond $10,000 $10,000 3 Expenses (Selling, General, Admin, etc) for Retailer $7,000 $450 4 Operating Income (line 1 minus lines 2 & 3) $1,000 $410

Explanatory notes for above table:

1. The same diamond will retail for a substantially higher price in a traditional retailer to cover increased costs of doing business (line 3).
2. In each case, the actual cost (to Lumera or the traditional retailer) of the diamond is the same ($10,000 in this illustration).
3. The costs of selling a diamond are substantially higher for a traditional retailer. Examples include:
   • Occupancy: Traditional Jewelers are often located in the highest rent areas of malls (the intersection of two or more corridors) or shopping centers (free standing store near the road).
   • Selling: Often you will find more salesmen than customers in a traditional jeweler. This is necessary to cover unpredictable fluctuations in traffic throughout the day. Because each customer is so profitable, it makes sense to be fully staffed at all times.
   • Inventory: If a retailer owns their diamonds, the inventory is high dollar and slow turning, incurring substantial carrying costs for the retailer.
4. The operating income tends to be higher for a traditional jeweler because the costs and risks of doing business are higher, necessitating a greater return.

Learn more about how Lumera operates, and what to watch out for when purchasing a diamond, including some common diamond buying mistakes.

A Note On Diamond Trade-Ins

Lumera offers a lifetime trade-in guarantee on every GIA diamond we sell. Often, customers will ask about taking a diamond purchased elsewhere in trade. A customer expecting to receive something close to the full price paid for a trade in diamond will be disappointed; and the comparison above illustrates the reason. Since the original diamond was purchased at an inflated markup, Lumera cannot afford to give the full retail price allowance. A traditional retailer can often come much closer, since the customer will also be paying an inflated mark up on the new diamond purchased.

While a customer may then be tempted to stay with the traditional retailer, a quick analysis of the costs involved highlight the potential benefits of buying from Lumera even when you have a trade-in agreement with a traditional retailer.

Diamond Trade In Example

Purchase of First Diamond Traditional 1 Purchase Price of Diamond $7,200 2 Actual Cost (to Retailer) of Diamond $4,000 3 Profit for Retailer $3,200

In this example, the customer paid $7,200 for a diamond that cost the retailer $4,000 (before other expenses). With the purchase, the customer receives the customary trade-in agreement.

Trade In Option 1: Customer trades in for a larger diamond, using the same retailer.

Purchase of Second Diamond (With Trade) Traditional 1 Purchase Price of Second Diamond $18,000 2 Less Trade In Allowance from First Diamond $7,200 3 Net Purchase Price (line 1 minus line 2) $10,800 4 Actual Cost (to Retailer) of Second Diamond $10,000 5 Cash Profit for Retailer $800

In this option, the customer purchases an $18,000 diamond, but only pays an additional $10,800 (since he received $7,200 for the trade-in diamond). The retailer's immediate profit is only $800 in cash, but this excludes the $4,000 (actual cost value) trade-in diamond the retailer also received. The final result for the customer is $18,000 in total dollars spent, and one diamond worth $10,000 at cost.

Trade In Option 2: Customer chooses to purchase the second diamond from Lumera without a trade in.

Purchase of Second Diamond (Without Trade) Lumera 1 Purchase Price of Second Diamond $10,860 2 Less Trade In Allowance $0 3 Net Purchase Price (line 1 minus line 2) $10,860 4 Actual Cost (to Retailer) of Second Diamond $10,000 5 Cash Profit for Retailer $860

In this option, the customer spends a near identical amount for the second diamond ($10,860 vs. the $10,800 in option 1), but in addition to receiving the second diamond, the customer is able to keep the first diamond as well.

If you have questions about your options for a trade-in, or any of the information on this page, please contact a diamond consultant for answers. Call 1-888-658- or contact us at [ protected]. You can also chat online; a representative will usually respond immediately during store hours.

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To understand the difference between the wholesale diamonds and retail diamonds, you need to know what is a wholesaler and a retailer.

Wholesaler &#; A wholesaler is a person or a business that sells goods in large quantities directly from manufacturers or distributors and resells them to other businesses. Due to high volume purchase orders those in wholesale are typically able to buy products at a lower price and add lower margins.

Retailer &#; A retailer is a person or a business that sells goods to the public in relatively small quantities for use or consumption rather than for resale and therefore when they need to sell the margin will be high.

One of the main considerations when buying a loose diamond is the cost, as we always focus on buying a good quality diamond at reasonable price as possible. One of the advantages in buying diamond from a Wholesaler Company is the cost which is way cheaper than buying diamond from jewelry store/retailer stores.

In diamond industry, wholesale doesn&#;t refers to buying in bulk, it simply means buying at a relatively lesser price than one would otherwise for a retail because no one buys 100 diamonds at once. All loose diamond wholesalers have access to Rapaport diamond average pricing report. It is an industry standard pricing guiding set up in a matrix and includes the prices for different shapes, color, clarity, carat and Certificate. Good wholesalers can sell loose diamonds based on the price listed on Rapaport Price Sheet. In negotiating, the wholesaler might even offer discount on Rap Price.

It is important to know if you want a certified or uncertified diamond. Because this can affect the price of the diamond. Usually a certified stone is more expensive than uncertified stone. Uncertified diamonds have been cut and polished but for some reasons the seller prefers not to have the diamond quality graded by a diamond laboratory.

When you buy directly from a wholesaler company, you can purchase a beautiful, high quality diamond at a very competitive price. Also, they usually have a wide selection of diamonds that they can offer to you. The price of buying good quality loose diamond from a wholesaler company allows you to save more money in your diamond purchase as there is no middleman and other costs that a store may add on top of the price of the diamond. This is why some people purchase loose diamonds from a wholesaler company for a very cheap price and later decide to upgrade to or trade in for a bigger diamond. Even though buying loose diamond from a wholesaler company is more practical, it is important to pay attention to the actual price you are charged if it was priced as wholesale.

Most of the retailers in order to cover their cost involved in running their store and to make big profits, they tend to increase the price of the loose diamonds considerably. People should understand that retailers are considered as the middleman. They are buying diamonds from wholesalers and add up to 10-30 percent of the real cost then sell to customers for double the price plus the sales tax. They include the profit margin in the cost of the loose diamond which makes it more expensive when they sell the diamond.

After all, who doesn&#;t like to buy something that is better quality at a lesser price? Nowadays, we always keep an open eye for offers and deals but end up paying more than what we should.

You may think that you purchase a diamond at a good deal only to find out that the diamond carries some major flaws like it is chipped, hazy, filled with black inclusions, etc. It is not only about price, you have to consider the quality of a diamond and make sure that you are getting a GIA certified diamond. 

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