How Diamond Prices Are Determined

Pricing most products is quite easy. 
Determine how much it costs to make the 
item, how much it costs to market that item, 
and then mark it up by 15 – 30% or more. 
Simple, right? Well, pricing diamonds isn’t 
quite that simple. There are many factors 
that are considered when diamonds are 
priced.


Diamond prices are determined first by 
adding the cost of the rough diamond, the 
cost of cutting the diamond, and all other 
costs necessary to turn the rough diamond 
into a marketable diamond. Depending on 
the importance of the diamond, an 
independent company may be called in to 
certify the grade of the diamond based on 
color, cut, clarity, and weight.


At this point, the diamond becomes more 
expensive each time it changes hands, until 
it finally reaches a retailer, where the price is 
raised a bit more. Before reaching the 
retailer, however, the diamond must travel 
from the mine, to the cutter and polisher, to 
the independent grading company, and 
then to the Primary market. Once it has 
reached the primary market, it will be 
purchased by diamond dealers and 
wholesalers, and from there it will be sold 
to retailers.


As you can see, the earlier you can purchase 
a diamond in the process, the lower the cost 
of the diamond will be – but not the value. 
The value is based on what the diamond will 
sell for in the market place – through a retailer.


If you own a diamond, and you have no idea 
how much it is worth, you can have it 
appraised, but the appraisal may not be 
accurate. You will be better off obtaining a 
certificate through GIA – Gemological Institute 
of America. With the information on this 
certificate, you can use a cutter’s guide to 
accurately determine what your diamond is 
worth. 


There are also many diamond price 
calculators available. These can be found 
on the Internet, and many diamond dealers 
use these as well. You must realize, however, 
that before you can accurately price a 
diamond, without a Diamond Grade Report, 
you need to know quite a bit about diamonds, 
such as different cuts, clarity, color, and weight 
– and how each of those aspects adds to the 
value of a diamond, or decreases the value of 
the diamond as the case may be. 


Again, you will be better off if you get a 
Diamond Grading Report on the diamond, 
and use that information to look up the price 
in one of the guides that the diamond cutting 
industry uses. This will give you the most 
accurate value of the diamond in your 
possession, or of the diamond you are 
considering purchasing.

How to Care for Your Diamond

Caring for a diamond takes more than 
occasional cleanings. Diamonds are forever, 
but they can be damaged if you are not 
careful. By learning how to properly care for 
your diamond, you will ensure that your 
diamond is indeed forever.


First, you should take your diamond jewelry 
to a jeweler once a year. Have him check the 
mountings and prongs that hold your 
diamond in place. Have him make any 
needed repairs. This will prevent your 
diamond from falling out of its setting and 
becoming lost.


Diamond jewelry that is not being worn, or 
diamonds that are loose should be stored in 
a fabric lined jewel case, or in a jewelry box 
where it can be kept separate from other 
jewelry. Each piece should have its own 
compartment. This will keep diamonds from 
becoming scratched, and it will also keep 
your diamond from scratching other jewelry 
as well.


Remove your diamond jewelry when doing 
physical work. Diamonds can be chipped 
and scratched easily. Also avoid allowing 
your diamond to come into contact with 
bleach or other household cleansers – this 
can damage or change the color of the 
settings and mountings, and it may even 
irreversibly change the color of the 
diamond!

How to Spot A Fake Diamond

In this world of advanced technology it is 
almost impossible to simply look at a 
diamond and determine whether it is real or 
not – especially if you don’t know much 
about diamonds. There are some steps that 
you can take to avoid buying a fake diamond,
however.


First, only deal with reputable jewelers, and 
when you find a reputable jeweler, stick with 
them. Avoid buying diamonds or other 
jewelry from jewelers that you have never 
dealt with before in the past. Ask to see the 
certificate for the stone. If no certificate exists, 
walk away. 


Look at the setting that the stone is in. Fake 
diamonds, such as zirconias, are usually set 
in low quality metals. Take a close look at the 
stone. Fake diamonds are not durable – 
natural diamonds, on the other hand, are the 
most durable stone on the planet. Look for 
scratches or nicks. 


After purchasing a diamond, take it to 
another jeweler for appraisal. In fact, take it 
to two or three other jewelers for an appraisal 
to make sure that the appraisals are all fairly 
close. If you find that you have purchased a 
fake diamond, you may be accused of 
making a switch when you return to the store 
of your purchase; therefore, it is important to 
have a certificate for the diamond. No two 
stones are alike.