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Why Jewelry Stores Dislike Knowledgeable Customers

For decades, jewelers have had enjoyed the position of being the “keepers” of the knowledge about diamonds and gemstones. They stood behind jewelry counters and shared little tidbits of information about jewels to shoppers. The jeweler seemed to be talking down to the shopper, making them feel as if they should be grateful to even be in the store or touch the precious gems in the display case.

This monopoly of knowledge went hand in hand with the monopoly of supply. The only way you could purchase a diamond or precious gemstone was to buy in a jewelry store. The prices were artificially high with markups of 100% to 300% of wholesale costs. The factors that differentiated stores included the ornate decorations, the fancy display cases, and elaborate storefronts. Life was simple and very profitable for the jeweler. The shopper came in, the jeweler said this is what you should buy, and the shopper paid the price because they had no other options. Can you recall any poor jewelers before the millennium change in the year 2000?

It was about this time that the most feared word in the jeweler’s vocabulary began to change the industry forever. That word was Internet. Suddenly there were competitors springing up who could supply diamonds and jewelry delivered to your door, often at prices lower than could support the high overhead of the jewelry store. However, the greatest fear was that the hidden knowledge of diamonds and precious gemstones was available to any shopper who wanted to spend a little time researching online.

The jeweler of the past said here is what I have and which one do you want to buy? Then came the knowledgeable shopper armed with printouts of online diamond advice. Instead of simply asking for a one-carat diamond, the shopper now has a detailed list of requirements that all but guarantees that nothing in the store will meet their requirements, regardless of the price.

It is common for a diamond shopper today to say, “Here is what I want and I expect the lowest price in the country.” Then they present their list of requirements for their round diamond:
1) Carat weight exactly 1.27 because our first date was January 27th
2) At least G color
3) VS2 clarity but I do not want to be able to see anything under the microscope
4) Must have a GIA grading report dated in 2006 with Excellent cut grade
5) No fluorescence
6) At least Very Good for polish and symmetry
7) Girdle has to be Medium (nothing more or less will do) and faceted
8) Laser inscribed with the GIA number
9) Must be able to take to an independent appraiser who agrees with all grading
10) I need it in two days

Their parting remark is that they are shopping these same requirements with twenty other retailers and are going to buy from the one with the lowest price.

This is the jeweler’s nightmare because this is not how their business works. Their jewelry store caters to the impulse buyer who will come in, see something beautiful and buy with only a few encouraging words from the sales clerk. Spending hours of work to find the specific diamond the shopper wants and then paying the shipping and insurance to get it shipped next day is just more work than they want to do for a sale. Instead, they complain and wish for the return of the good old days, when Ma Bell controlled the telephones, gas was 59 cents a gallon and the secrets of the diamond industry were safely behind the jewelry counter.

Fortunately, for diamond and gemstone shoppers there are a new breed of diamond retailers available who not only encourage diamond education; they enjoy working with shoppers who know exactly what they want. These diamond brokers have access to the diamonds on the wholesale market and know how to find diamonds that meet the shopper’s requirement. Best of all, the diamond brokers have much lower overhead than a jewelry store so can find the exceptional diamonds at very low prices.

The competitive marketplace always seems to produce sources for services and goods that consumers demand. The online diamond broker is well suited to serve today’s well-knowledgeable and demanding diamond shopper.


About the Author: Denny Reinke is the Vice-President of Diamond Source of Virginia, an online diamond retailer specializing in loose diamonds, diamond rings and diamond jewelry located in Richmond, Virginia and on the web at www.DiamondSourceVA.com You can also visit Denny’s blog at www.diamonds.blogs.com




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