Wednesday, March 5, 2008
Diamond Pricing - Are Diamonds A Good Value In Today's Market?
If your diamond was purchased in 1970, and it was a D color, and flawless, and weighed 1.00 carat, you probably paid around $3500.00 for it. If you purchased that same diamond in 1980, you would have paid $63,000.00 for it. The same diamond, if purchased today (2007) would be around $23,000.00. These prices are based on the purchase being made in a retail jewelry store and not from the internet.
Looking at the above prices, you can see that there has been a steady increase in prices since 1970 with the exception of 1980. From $3500.00 to $23,000.00 is about a 650% increase. This is about the same increase as gas prices for the same period in the US.
If we look at 1970 to 1980 we see a jump of around 1800%. What happened? From 1979 to 1981 diamonds were being sold as investments. Consumers were being told that top quality diamonds were in short supply and would continue to rise in price. This was not true. However, consumers continued to purchase them at a record pace and a record price. In 1981 the bottom fell out and the market collapsed. Over the next few years there was an up and down cycle and finally the market settled back to where it would have been had there been no so called investment craze.
Millions of dollars were lost during this crash and many were left holding diamonds that they would never recover their money from. I still do appraisals today on diamonds from that period, and many hope they can recover their $63,000.00 on a stone that is now worth around $23,000.00. And some of them still want to shoot the messenger. (Appraiser)
During this period most of the diamonds were sold with Diamond Grading Reports, or what became known as Certs. The Gemological Institute of America (GIA) issued most of these. However, other laboratories started to spring up around the world. The top labs issuing grading reports today are GIA, AGS, EGL, and IGI. In my opinion the two that set the world standard today are the Gemological Institute of America (GIA) and the American Gem Society (AGS).
When you purchase a diamond in todays market, whether it is from a retail jeweler, or an internet seller, it should have one of these Grading Reports. Buying on the internet has its advantages. Lets take the $23,000.00 diamond that we discussed above. This diamond can be found on the internet for around $18,000.00. Thats quite a savings. All you need to do is find the stone that you want, place your order, and in about 2 to 3 days it will be delivered to your front door. If you dont like it, or it is not what you wanted, most companies have a 30 day return policy.
When buying from a retail jeweler you usually have several choices of stores in your local area which allow you to visit them, and talk to a salesperson face to face. The salesperson should be able to show you several diamonds that meet your criteria and thoroughly explain them to you.
I asked at the beginning if diamonds were a good value in todays market. My answer is yes as long as youre buying the stone for all the right reasons. The right reasons will be different things to different people. It might be for you to wear yourself, or give as a gift, or the most special of all to give to that special person as an engagement ring. Just keep in mind that a diamond is bought as an investment in beauty and not as a financial investment.
James Greene is a Graduate Gemologist and Master Gemologist Appraiser currently doing appraisals in Southeastern Pennsylvania. He has over 25 years in the jewelry and appraisal business. http://www.diamondmarketwatch.com
Are You Selling The Right Product?
While starting up a retail business of your own, one of the first decisions you need to make is what type of products you will be trading in. And this is no easy decision. Any market can become an insurmountable challenge for an experienced retailer if there is a lack of demand for the products being sold.
Market mavens say that your ability to pick up the right product is the very first step to success. So dont be in a rush to make up your mind, and take a few moments to read what weve got to say.
Like what you do: Doing some consumer research can give you an idea of the right product to take up for your retail venture. But remember, in todays world, with huge competition around, thats not enough! You certainly need to have an interest and adequate skill in that particular domain of business. Thats the only way youre going to last the long haul.
Carry personal conviction: Take up something that you will feel excited about selling. Before you can convince others, you need to develop a strong personal belief in the value of your products.
Take the case of Anita Roddick, the person behind The Body Shop. Anita was deeply committed to the usage of only natural ingredients in her cosmetics, besides being totally against animal testing. Her company was the first green company in England. It was her passion, apart from the quality of her products that won peoples hearts.
Establish a difference: Many entrepreneurs have tried to ride the boom in the retail industry. As a consequence, there is a mind boggling array of products to be bought. How do you differentiate your products from those sold by Joe next door? By making your offering a bit unique!
Innovation is the key to tapping a competitive market. And sometimes you have to think way out of the box to establish a competitive advantage. Christian Dior scored a hit in one of the shows with a dress they made out of newspaper. In that case, it was sheer novelty value that caught the buyers attention. The company later created a version of the dress in newsprint-look fabric which was a roaring commercial success.
Low price equals Great sales, right? Wrong!
While this theory may work in many markets, its not a universal rule. So, consider the market sensibilities before you launch an all out price war. Sometimes, you might devalue a product with a good image by discounting it aggressively and lose all your customers in the bargain!
Dont believe us?
Swedish home furniture giant Ikea stumbled badly in Japan when it entered the quality-conscious market many years ago. The Japanese are known to prefer high quality merchandise over low price. Ikeas lower-priced products were harshly rejected by them.
The worlds largest retailer Wal-Mart met with a similar fate when its everyday low prices boomeranged badly.
Customize your product: Are you sure that your product is correctly adapted to the target market? Take some time to understand the subtler aspects of market demand and customize your product accordingly.
Let us go back to the Ikea example. Ikea is famous all over the world for its furniture which is affordable as well as contemporary in design. When the company entered the US market, it was confident of succeeding. However, the bedroom-line Manager at Ikea visited peoples houses to peep into their wardrobes and learnt that Americans prefer to store most of their clothes folded. The result was a wardrobe that had deeper drawers. Many other well-established brands customized their products while making a move to a new market, even after registering a high demand.
So, remember that a lot more goes into your product decision that the actual product itself. Cover all your bases, to make your way to success!
My name is Kanakdeep
I work at http://www.aykya.com which is a new portal to help Entrepreneurs succeed in their Business. http://www.aykya.com is an Entrepreneur's portal which provides high quality ideas & tips to help you start & grow your business successfully.
