The Informational Gap between Jewelers and Diamond manufacturers

Can you imagine a scenario where most carpenters who start off with rough wood material would manufacture the same 10 wooden chairs styles, and then market them to furniture manufacturers & stores around the world? This purposely simple analogy reflects how our industry handled itself for Centuries, mainly in the last Century. Surprisingly enough, even with present communication technologies available, our industry still for some reason prefer the old way of doing business.

The Rapaport Question that says it all

A few years ago I attended one of Martin Rapaport's usually amusing & informative lectures at the Israeli Diamond Exchange, I really don't remember the subject but one specific question got my attention which is still carved in my memory.

In a room full of industry professionals Rapaport asked a simple question really, "who in this room visited a jewelry store in the past year, pick up your hand". Out of my estimated crowd of approximately 300, only one handful was visible, I am so serious!! I would feel safe to assume if this question was asked of jewelers about visiting a Diamond exchange/manufacturing hub, their hand count would be very similar.

The Diamond market side

So basically this is how it's been working "forever" (we own this word industry wise), a Diamond manufacturer purchases a parcel of rough Diamonds, plans them to the highest available yield (in weight, shape and value) then surrenders them to cutters who produce the planned cuts.

When production is completed, these cuts are then marketed via numerous channels to jeweler's who design & produce their jewels and market their finished creations to consumers around the world. This is the "palette" of cuts jewelers have to work with.

I would dare estimate about 75% round brilliant variations and an additional 25% of what we have been calling "forever" fancy cuts which mainly include, a few square variations like the princess, radiant and cushion "modified cuts" and some curved cuts like pears, ovals, marquise, hearts and thank goodness for step cuts which allows us to add emerald & baguette cuts to this mix.

If I could just think of another cut we would match the analogy I began with in the first paragraph. This is basically the cut & shape options jewelers around the world have to work with in order to create. Still wondering why competition is becoming so fierce?

The majority of Gem & Diamond manufacturers are competing with rising price wars over rough materials, flying the world over to participate in tenders (auctions) just to find themselves paying the highest prices to then only cut them to overly abundant cuts that no one is really hungry for. Are we surprised the "added values" we are supposed to "add" translates to the lowest price wins??

The Jewelers side

On the other side of the coin, jewelers found ways to utilize this erred system, in past years this served as a comfort zone, an oversupply of the same old same translated into a memo business model which allowed jewelers a free hand at Gems & Diamonds without commitments.

This led and is still leading our industry to the situation we're at presently (and we could write books on this subject). At this age of doing business, commitment is a crucial part of the game.

The gap that needs bridging

Currently there is a huge informational gap (vacuum some might call it) between the upstream and downstream players of our industry. Information is education which is becoming vital in order to grow and move forward while adapting to the fast changes sweeping our industry. Diamond manufacturers must know where their productions are aimed by starting to understand & listen to jeweler’s needs, there must be a direct communication between the two. Once communications are ongoing jewelers will be able to discover new creative and innovative products they didn’t even know was possible.

You are welcome to visit GemConcepts's website

Photo by Kace Rodriguez on Unsplash