No Nonsense Guide To Diamond Pricing
Buying a diamond can be a nerve-racking experience. If you want my expert advice on buying the best diamond just drop me a note and tell me what you are looking for and how much you want to spend and I will get back to you with my personal recommendations for a beautiful stone that fits in your budget. This is a FREE service, doesn’t cost you a dime extra, (in fact I am sure that it almost every case I can save you lots of money) and there is absolutely no commitment.
In my opinion, the most important aspect of selecting a diamond, understanding how diamonds are priced, is also the most misunderstood. After reading this page it is my hope that you will be much more informed consumer and in turn will allow you to rethink everything you have been told about the 4 Cs and how to buy a diamond.
Many of the emails I get from people asking my advice on selecting a diamond start off with something like “…… I know I want a 1.5 carat VVS1 and F color Ideal cut…” Almost always I will first ask if they are sure this is what they want and in most cases send some sample links to diamonds that don’t quite meet the specs requested. The reason for this is because I want to make sure that they understand how diamond pricing works and that they aren’t being misled into putting additional money into something that will never be noticed (other than on the diamond certificate).
As you are probably aware the price of a diamond is primarily made up of 4 components (see my page on the 4 Cs). What you may not be aware is that not all of the four have equal influence on the price and that even within one of the “Cs” there may be a huge difference between 2 almost indistinguishable points on the same scale.
Carat Weight and Diamond Pricing:
Diamond weights are broken down into groups of carat weight and the price per carat is dependent on the group that a particular diamond falls into. Take, for example, the following 4 carat weight groups:
Lets say hypothetically that the diamond you are looking at is a 0.90 carat E, VS1 stone and it is priced on a web site at $2000 . It is reasonable to assume that all other factors remaining the same if this diamond were to be 1.80 carat the diamond would cost $4000. This is NOT the case. You see, in this example you have not only doubled your size you have crossed over 2 weight groups and for this you pay a large premium. (in fact, you pay a premium for every weight group you cross). In the example I used you are more likely to pay $5861 in other words a 47% premium over the 0.90 diamond!
Lets take a more real word example and you will see how important this concept is to diamond pricing. Lets say you are looking for a 1-carat E, VS1 diamond, which is a very popular request. For sake of better understanding here is a link to a diamond on James Allen meeting this spec. As you can see this is priced at $8630. Now take a look at this diamond (also on James Allen), which has the identical color, clarity and cut but is a 0.90 diamond. As you can see this diamond is $6050. Why the huge price difference? Because you have crossed the magical diamond weight group and you are paying dearly for this.
Remember that this is a 1 carat diamond so the actual size difference of .10 between the 1.00 carat and the 0.90 will hardly be noticeable to you, your fiancé, or anyone else looking at it. Obviously if you were looking at a 1.5 carat diamond I would not recommend dropping down to a 0.90 in order to save the money. However for those borderline 1.0-1.1 carat cases (or 1.9 to 2.1 for that matter) I would definitely recommend rethinking your purchase strategy because of the way diamond pricing changes between 0.9 and 1.0.
Diamond Color and Diamond Pricing:
Now that you understand the concept of diamonds being priced in groups it will be easier to understand how this relates to diamond color (and clarity for that matter…). Diamond colors are divided into a scale using the letters D through M with D being the highest quality “colorless” and M having “Noticeable” color. Since most Jewelers such as James Allen and Blue Nile will only sell diamonds with a color scale of D through J, I will focus on those.
It is crucial to understand that all diamonds between D and J are colorless or near colorless – meaning that the actual color difference between any one letter on the scale and the next one is almost impossible to distinguish viewed face up with the naked eye. If you were to hold a G and H diamonds side by side face up, not even a skilled Jeweler will be able to tell which is which. If you were to take a D and a J on the other hand, you will be able to tell a difference, although the difference is much slighter than you’re probably thinking.
(For a more in depth discussion of diamond colors see my diamond color page)
As you may have guessed already, as with carat weight, you pay a premium when jumping the scale between diamond colors. So our 1.0 carat E VS1 will be more expensive then the same diamond in a F or G color. This is reasonable since in theory you are getting a “more” premium diamond and the diamond pricing should reflect this. Where things start to break down is when you go form a G to an H color. Once you drop form a G to an H you will see that you save a lot of money for an almost impossible to notice difference in color. There is no logical reason why diamond pricing works this way, its just the way it is.
Lets go to real word examples again to see how this works. Here is a link to a 1.31 carat F VS1 that sells for $12,320 and a 1.31 G VS1 that sells for $11,420. You are paying 8% more for the jump from F to G. Now lets look at this 1.32 carat G VS1 diamond that sells for $11,380 and this 1.32 carat H VS1 diamond which you would think sells for $10,470 – a savings of 8% but instead costs $9300 –a savings of over 18%! Why? Because you have crossed from a G to an H, which is the single largest price jump between any two colors in the diamond color scale.
Now remember what I said at the beginning of this piece on diamond color – there is no noticeable difference between any 2 adjacent points on the diamond color scale. In other words, in the example given you are paying an 18% premium for something that nobody will ever see. Whenever possible choose a diamond color that is H.
(Disclaimer- remember that no 2 diamonds are exactly alike and therefore none are priced exactly alike. In some cases there may be other factors besides diamond color (or for that matter clarity) that effect the price. In the example of the H VS1 I gave above you may notice a small imperfection slightly to the right of the center – while this may be pushing the price a little lower the general principle remains true and if you look around James Allen web site you will see other diamonds of the same size and clarity priced similarly)
Diamond Clarity and Diamond Pricing:
As you may have guessed diamond clarity is also graded on a scale. In this case it goes from IF (Internally Flawless) to I3 (Included). In most cases you won’t find anything lower than an I1 on sites like James Allen and Blue Nile.
(For a more in depth discussion of diamond clarity see my diamond clarity page)
Unlike diamond color and weight there is no single point where there is a major jump in pricing between clarity grades. That said, the key to understanding diamond clarity is that all the letters in the grading scale refer to the imperfections as seen under a 10X magnification. Take, for example, a VVS1 diamond. What this means in English is that under a jeweler’s loupe, which enlarges the diamond 10x, you actually will not be able to see anything. A VVS1 is only visible with a microscope.. In other words, unless you have a bionic eye, you won’t see any inclusions under normal circumstances when the diamond is set in a ring! A VS1 or VS2 (which stands for very slightly included) likewise can only barely be seen under 10x magnification and will not be visible (other than in extreme cases) to your naked eye.
Now keeping this in mind lets go real world! If you were to look at a this VVS diamond that costs $12,080, a diamond with the same color and size but this VS1 will cost $8,630. Once again you are paying a pretty big premium in price for something that you will never see the benefit of! (taking the same grading down to a SI1 brings the cost down even further to $6,040)
Unlike color and weight, clarity is a little more complex- the location and color of the imperfections can be of major importance. For example, if you have a small black spot but it is close to the edge of the diamond even if its visible to the naked eye (say an SI1) it can easily be covered with the prong of the setting. I wouldn’t have a problem recommending this diamond. On the other hand if that same spot were dead center on the table of the diamond it may very well effect how the diamond looks even to the naked eye and I wouldn’t recommend it. I would go so far as to say that the location of the inclusion is as important as its severity. In many cases you will have a VS1 diamond that has an imperfection dead center and SI1 with the inclusion on the side – even though strictly speaking the VS1 is “higher quality” which diamond would you want?
This is one of the reasons why buying from a Jeweler such as James Allen (where you can see the actual diamond magnified online) is so important.
In summary – my motto is pay for what you can see – not for what’s on the diamond certificate.
– Spending your money on a great cut that will really reflect the light properly and give you that wow factor that you are looking for.
– Scale back if you can on color and\or clarity and put the savings into carat weight which can (but not always) be seen.
I hope this was helpful in your quest for selecting a diamond and understanding diamond pricing. Of course if you have any questions or need help picking out that perfect diamonds contact me and I will be happy to assist.