How the Melee Diamond Industry Changed in 2016

We are able to dispel one popular myth - that diamonds are formed from coal (sorry, it’s a romantic ideal, but not a geological reality). We may even be able to dispel a seemingly irrefutable fact: that diamonds take millions of years to form. Really, though, no one knows. Smithsonian diamond expert Jeffery Post says that it’s hard to put a “growth period on them; things don't always occur continuously in the Earth.”

Wholesale Melee Diamonds | K. Rosengart

What are we left with? The simple knowledge that diamonds are a mystery! They’re alluring. They’re magical. Their appeal transcends even myths. A GIA certified diamond supplier can also help you transcend your goals and targets; meeting customer expectations is easier with the right partners. Understanding the melee diamond market is a great first step.

The Real Thing… Or Not?

Diamonds “in the rough” can be unpredictable,” as Dr. Post reminds us. Their development does not follow our timeline; instead, they grow to perfection at their own pace. Some consumers believe they have found a shortcut: lab-grown diamonds.

Not to be confused with diamond look-alikes, like cubic zirconia, lab-cultivated diamonds are grown from carbon atoms arranged in the classic diamond crystal structure. In the infancy of this science, labs created small, colored stones. Today, techniques have advanced, enabling labs to produce large, colorless diamonds in mere days.

To the naked eye, lab-grown diamonds appear virtually indistinguishable from mined diamonds. Now, the question is whether or not the cultivated diamonds will be a significant disruption to the $14 billion rough diamond market.

Yes and no.

According to Morgan Stanley forecasters and analysts, “The most likely scenario is that the lab-grown diamond market finds its own niche, increasing the diamond jewelry market and taking limited market share from miners.”

At the same time, though, there is a risk of devaluing mined diamonds. Analysts say that it’s possible (whether or not probable) that consumers may prioritize price and appearance over provenance, taking share from traditional mined diamond markets.

But when it comes to price, there’s more than meets the eye. Labs claim their stones cost 30 - 40% less than mined diamonds. But there are two major considerations to keep in mind:

  • No apples-to-apples comparison data. GIA, or the Gemological Institute of America, is the global authority on diamond grading. A grading report attests to a stone’s authenticity and quality. GIA does not issue reports for lab-grown diamonds. Some labs self-grade their diamonds, but that is not an independent, third-party assessment. So, in terms of quality, you cannot be sure - objectively - what you’re getting. The 30-40% lower purchase price may reveal itself to be a poor deal indeed.

  • No resale value. They say a diamond is forever. They’re not kidding. Mined diamonds have immense resale value, and with new settings, “old” stones can achieve vibrant new life. Lab-grown diamonds have virtually no resale value; you may recoup pennies on the dollar for your investment.

Where jewelery store managers, buyers, designers, etc. have to be cautious is in Apollo_cultured_diamonds.jpgpurchasing loose diamonds. Some suppliers may slip in a few lab-grown stones with the mined diamond mix. This erodes the value of your investment.

To combat this, and to ensure buyers know what they’re getting, GIA has developed a tool to identify synthetic diamonds. This machine will be available in late  2017 and priced at a point that is “accessible to the trade.” When you purchase wholesale melee diamonds and other loose stones, you can guard against stones that are lab-grown, treated, and synthetic.

While lab-grown diamonds may have a place in your business, you certainly want to ensure that you are getting exactly what you’re paying for - a reassurance that you can then pass on to your customers. Working with a GIA certified diamond supplier builds that confidence into your purchases.


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