Posted on | April 9, 2016 | No Comments
The newest substitute for natural diamonds are now man made or lab grown diamonds. Unlike CZ’s and Synthetic Moissanite, these diamonds actually have the chemical composition of a natural diamond, and can be grown anywhere, like California or Washington DC. Perhaps the most well known startup, Diamond Foundry, is backed by Hollywood bigwigs like Leonardo DiCaprio, star of Blood Diamond. On their website, they sell based on the so called ethical issues of the natural diamond industry. From their website:
The diamond industry has long been linked to human-rights abuses, child labor, ecological destruction, untraceable origin, and cartel pricing. We felt it is time to create a better choice.
Seems like this would be a great selling point to millennials who are looking be to socially and ethically responsible. Sounds a little like selling on fear, which is never good. Remember these are the same customers of Target, Walmart, Gap, and other companies who all produce clothing overseas in not what we would call “socially responsible” conditions. Don’t forget that most natural diamonds are produced under legitimate conditions. Diamond Market maker and rabble rouser, Martin Rapaport, wrote a letter to DiCaprio, pleading for him to stop promoting these diamonds. It will go on deaf ears, but here it is:
Dear Mr. DiCaprio,
Your efforts to sell synthetic diamonds as an ethical substitute for natural diamonds threatens the lives and livelihood of millions of artisanal diggers in Africa. One and a half million diggers support an additional seven million people by digging for diamonds. These diggers are among the poorest people in the world, earning as little as one dollar per day. Their primary daily concern is getting food to feed their children. Things are so bad that in places like Sierra Leone, the child mortality rate is the fourth highest in the world; 12 percent of children die before the age of five.
Instead of using your fame and fortune to help these diamond diggers and their families, you and your company are falsely claiming that it is more ethical to buy your synthetic diamonds than their natural diamonds. You are literally taking bread out of the mouths of the poorest people on earth. And you are calling it ethical. That is super wrong.
Mr. DiCaprio — what will happen to the millions of poor diggers and their families if you succeed in convincing a new generation of Millennial diamond consumers that it is more ethical to buy your synthetic diamonds than their natural diamonds? Will you feed these people? Will you provide them with an alternate livelihood? Are you willing to take personal ethical responsibility for the suffering you will cause?
Dear Mr. DiCaprio, I plead with you to take two urgent actions. 1) Stop promoting your synthetic diamonds as a more ethical product than legitimate natural diamonds. 2) Use your fame and fortune to help us and others promote fair trade diamonds and jewelry that will ensure good living and environmental conditions while paying artisanal diggers fair prices that lift them out of poverty.
You can and should play an important role in promoting ethical consumerism and an ethical diamond trade. The real issue before us is not diamonds, it’s people like the diggers in Sierra Leone and how we can use diamonds to help them. I urge you to contact me and follow up with a discussion about how we and others can create a more ethical diamond and jewelry trade that will significantly improve the lives of millions of artisanal diggers.
Martin Rapaport Chairman, RAPAPORT
His point is that the man made diamond industry is taking jobs way from the poorest people on earth and calling it ethical. They will argue that Mr. Rapaport is old school, doesn’t embrace technology, and is only thinking about his own personal interests. I’m not here to debate the ins and outs of ethical mining, social responsibility, or these company’s right to exist. The real question is what affect will these diamonds have on the natural diamond market?
I am going to discuss this wearing two hats – the concerns of a retailer and the concerns of a second hand buyer.
These stones will be about 20% less than natural diamonds, so when you have customers on a budget and asking for these man made diamonds, the retailer will fear that they miss a sale if they don’t have them. If the made made diamond marketing machine succeeds, like DeBeers “A Diamond is Forever” campaign, then retailers may be forced to adapt or die. At this time, we have chosen not to carry these diamonds at Samuelson’s right now. It doesn’t have much to do with being “against” the companies who produce them, but more that we don’t want to participate in cycling these “diamonds” back into the market. This leads into my concern as a second hand buyer.
Second Hand Buyer Concerns:
This part really scares me. We buy a lot of diamonds from the public. Like moissanite, these made made diamonds will test genuine on a diamond tester. What equipment will we have to properly detect these stones? Most will have a laser inscription, but who is to stop someone from buying a man made diamond, having it recut, and then resellng it? Perhaps like CZ and moissanite, in a few years it won’t be an issue to detect these stones. However, the technology has improved so much that I think it will be tough. It also will be interesting to see what these diamonds will bring second hand if they are bought as made made diamonds. In other words, what be dealers pay for “recycled man made diamonds”. It may be that they have ZERO real market value, like CZ’s and moissanite. Of course, natural diamonds have always had a real value and a robust trading market.
Time will tell how man made diamonds will affect the natural diamond market, but there is something special about natural diamonds that technology can’t ruin. They have been valuable for 1000′s of years, this one blip in history can’t take that all away. As long as they are making real diamonds in a lab, why not make real gold, silver and platinum? Is that the next step? What jewelers and diamond buyers will have to do is adapt and move forward – that’s always been our philosophy – change is inevitable, the winners will move with it…
Posted on | February 15, 2016 | No Comments
I would be lying if I were to say that 2015 was a banner year in the diamond market. Let’s be honest, it was rough out there. The FORMER monopoly of Debeers didn’t heed the call of the market and continued to raise prices at their sales. What ended up happening was that a majority of sightholders (companies that have the “privilege” of buying from Debeers direct) turned away boxes of diamonds in unprecedented numbers. In the second hand world, where I am fully in the trenches, cash was tight. Prices I realized in 2013/2014 did not bring the same in 2015. There were some key factors that contributed to overall diamond prices in 2015 like Far East demand and unsteadiness in the global economy, but there were a few things the I saw, as a diamond buyer, that affected diamond prices in 2015. The following factors are things that I noticed as an estate jewelry buyer that most diamond reporters will not see, as they are generally reporting on the rough and manufactured diamond markets; not the recycled diamond market, which is the BIGGEST diamond mine in the world.
EGL International Going Under
It was a big deal in November 2014 when Martin Rapaport, the market maker in diamonds and owner the Rapnet Diamond Trading Platform, delisted ALL EGL certified diamonds, because of massive overgrading. EGL International in particular were the culprits in this scheme and they went out of business immediately. Years ago EGL was average in their diamonds grades, but lately they have been so far off the mark, that it got out of hand. There were even some lawsuits/class action suits filed against companies for selling these certificates. I think this may have had a direct effect on the sale of commercial grade diamonds for us in 2015. We used to be able to move these items at decent prices, but in 2015 prices were off on these particular goods. Bread and butter goods, larger diamonds and nicer quality diamonds are always in demand.
Metal Price Slump
I also believe that the metal price slump has had an adverse effect on diamond market. At the height of the gold buying craze from 2008-2012, (remember the Cash4Gold Super Bowl ad with MC Hammer?) things were moving fast, gold was at an all time high, and diamonds were cruising. Once the craze was over, diamonds slowed down as well.
So what did Samuelson’s do as a company to combat the 2015 slump? We adapt and move forward. That’s all you can do. We also sold our dead goods and continued to buy aggressively and carefully. Like Warren Buffet says, “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”. There were some great deals out there (and still are).
So the next question is – what will 2016 look like? So far, it’s on a rebound. Debeers last sale was a record. They came back down to earth and the market reacted. I’m seeing prices improve and the overall state of the market moving up. I also predict a rally in gold, silver and platinum prices. This will propel the diamond market moving forward. These minor corrections are healthy for any market – they weed out the weak and reward the ones who are still standing…
Posted on | July 8, 2015 | No Comments
Well, I guess dreams really do come true. I started a blog post before I left that I never finished titled, “Is This Really Happening? The Grateful Dead With Trey?” Well it happened and this could have been the best musical experience of my life.
Here’s how the post before I left started:
“How many Phish shows have I craved a Grateful Dead cover? Never got one. So when the announcement came for the DEAD50 Anniversary shows at Soldier Field, I was all in. The “warm up” shows were promising, not perfect, but great. I will write a full review when I get back. So far, Trey hasn’t FULLY let loose, but he’s getting there. The major similarity between Trey and Jerry is the peaks and valleys that they take you through. I think the technical term is CRESCENDO:
Will report back after my trip – enjoy!”
Boy did they deliver. Trey was unbelievable – he really let loose and took us on those crescendos. Bobby was on his game, the vibe was just so perfect, I can’t even explain it. This was a dream come true for me. Great friends, great music, great city – I am still high from it. I can’t even write a full review of these shows because I can’t put into words how great they were, and I’m not willing to critique every note and every flaw. The professional videos are not out yet but here’s a great one that gives you the vibe of the crowd:
Posted on | April 25, 2015 | No Comments
After reading an article in New York Magazine titled “The Secret Slang of the Diamond Diamond District,” I thought that this would be a good opportunity to write a blog post about the most important term in the diamond business, MAZL,(or mazel or mazal) and what it means. Also, I wanted to explain that this rule doesn’t seem to apply to retail customers and it should.
From NY Magazine’s article:
The most significant phrase on the street, and perhaps in the global trade, is mazl un brokhe — “good luck and a blessing” — which is commonly abbreviated to “mazl.” It is hard to overstate the power of this oral handshake, which seals million-dollar deals without lawyers, witnesses or contracts. In “making mazl,” diamantaires stake their honor (and that of their family), and the term garners near-universal respect.
So, I went into the archives of Ramble On Ron and discovered a draft from August 2011. It says everything I want to express. This remains unchanged from 2011 – please read it below:
AUGUST 11, 2011
There are a lot of quirky, old school practices in the diamond business, but the one that I use on regular basis is commonly referred to as a “mazl”. Mazel Tov in Hebrew (or Yiddish) means “Good luck” or “Congratulations” that is often said on a happy occasion. However, that word, MAZL (pronounced MAZAL) and a handshake in the diamond business means that the deal is done.
Here’s an example. I make a sale on a diamond with another dealer/member of the trade. Let’s say he wants to buy a diamond from me for $5,000. I agree to the price and we make a mazl. That means that I can’t go back on my decision and neither can he. So even if I am still holding the stone and another dealer or retail customer offers more, I can’t sell it to someone else. And in the buyer’s case, if he changes his mind or decides that he doesn’t need it the next day – it’s too late. It’s a DONE DEAL.
Some customers definitely don’t understand this. It’s often referred to as “buyer’s remorse” but sometimes I see it the other way around – like “seller’s remorse”. I take a risk when I buy. What if gold or silver goes down? What if the diamond market collapses? Or if the diamond is chipped under a prong, or not the color or carat weight that I thought it was? In any of these cases, I took the risk!
Let’s take the flip side. If gold goes down, should I call all of my customers and ask them to write me a check for the money I lost from when it was bought? If a diamond comes back from the lab at a different grade than I thought, can I go back on the deal? The answer is no, I wouldn’t do that – and customers shouldn’t either. Whether you are in my business or not, when you make a deal and shake hands, it’s done. To go back on the deal, ask for a price increase or change the terms of the deal, takes a lot of a CHUTZPAH!
Posted on | December 22, 2014 | No Comments
Each year I give a Diamond Market Report where I explain what’s happening in the diamond world and where I think market trends and prices will be. As I read over my report for 2013 it seems that 2014 was a very similar year with all trends continuing on the same path. Colored and larger diamonds are strong, average diamonds are moving, and small diamonds (melee) are relatively weak. CLICK HERE TO READ MY 2013 DIAMOND MARKET REPORT.
So this year, I decided to give a report on the state of the JEWELRY industry. Not necessarily on fashion – like what’s hot and whats not, but more on what business decisions need to be made for jewelers and diamond dealers. This year was a pretty difficult year, and 2015 will be just as challenging for jewelers on the retail and wholesale level.
What’s changed in the past 10 years? Why can’t the average jeweler compete these days?
Yes the net has taken the jewelry industry for a big spin. It took a little while, but retailers and now wholesalers are having a hell of a time figuring out how to add value. First, it was “you can’t buy a diamond online” – it worked a little. Now, it just doesn’t fly as well. Sure people want to touch and feel their jewelry, but a 25-30 year old guy who can get a good value in one click and return it if it’s not right? That’s a hard one to compete with in 2014. So what’s the key? RELATIONSHIPS. You can’t get that at Blue Nile. You’re just a number and then you go into a marketing funnel at that place. So jewelers have to provide some value beyond a good price, and it can be done. Samuelson’s Diamonds is coming out with a new website in the first quarter of 2015 that will really tap into what local buyers are looking for.
CASH FLOW AND INVENTORY LEVELS
This is an especially tough one for jewelers and maybe even more so for diamond wholesalers. What do you do with all of the goods you bought that are sitting? What does a wholesaler do with a large amount of diamonds that a bank won’t lend them money on? The problem is that banks don’t understand what jewelry is worth, so they can’t lend aggressively on goods. I believe this problem can be solved, but I will say that TURN is going to be a key to survival this year. Don’t stock items you can’t sell.
METALS AND COMMODITY PRICES
Gold and silver have taken a big hit in the past couple years. In April 2011 gold hit a high of $1923 per ounce. Silver hit almost $50 per ounce. Now they are at around $1180 and $15.60 respectively. That’s a huge loss. How did this affect jewelers? For that 2008-2012 run, there were a lot of jewelers who survived on gold buying. Remember CASH4GOLD and all of the other companies? How about gold parties? Well, they are all gone or very small now, and so are the sellers. So the easy money just isn’t there for a single jewelry store. Now, it’s back to the basics and the basics have really changed!
I think 2015 will be the year to BUY. Because of what I listed above, coupled with fear, the deals are there. For a consumer and for a diamond dealer (like me). It may even be a great time to buy metals.
I think Warren Buffet sums it up best:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”
It’s gonna be a good year to buy…
Posted on | August 30, 2014 | No Comments
Not a lot out of Ramble On Ron lately but a lot of exciting developments for Samuelson’s Buyers in the fall. For now, check out a smokin’ US Blues from Jerry and the boys (Bobby and his short shorts) at Rich Stadium 7/4/89.
Posted on | May 27, 2014 | No Comments
We had our Third Feinfest on April 5, 2014 at the 8×10 in Baltimore. This was our first fundraiser in years and it went extremely well. We raised over $10,000 for The Foundation and a great time was had by all. Check out Cris Jacobs playing an extra funky version of “Sneakin Sally Through The Alley”. Enjoy!
Posted on | April 1, 2014 | No Comments
The O’s had a great win again the world champion Red Sox yesterday and Samuelson’s Diamonds is giving away tickets! Check out this great promotion we’re doing and enter to win 4 tickets to the O’s game on June 28th! It’s our brO’s ticket giveaway!
Click below to enter:
Posted on | December 12, 2013 | No Comments
A recent article in National Jeweler magazine, “Blue Nile Now Displaying It’s Rings In A Store,” discusses how Blue Nile, the biggest and baddest online diamond seller, is now showcasing their rings at Nordstrom in Seattle, where both companies are headquartered. I’m sure Blue Nile wants to get their name out a little more and what better place than a luxury department store like Nordstrom? What’s even more interesting is that you can’t actually buy Blue Nile rings at Nordstrom, but you can look, ask questions and order online. So they are obviously looking to give their brand more of a human interaction. I’ve always thought that Blue Nile could open it’s own flagship store in Seattle or even on Madison Ave if they wanted. The real question is does this add to the customer experience, or completely turn it upside down? It’s one of those problems that even small businesses deal with – that you can’t be everything to everyone. If you’re an online seller, then stick to that. If you’re a brick and mortar retailer, then know that’s your game. We’ve seen very few traditional retailers discover a high volume e-tail model – not impossible, but very difficult. Why? Because it’s not what they do!
Another company that is giving retail a shot is custom online jeweler Gemvara. They have raised over $50 million in funding since they started in 2006. Their online jewelry building technology is very slick and they seem to have their act together from customer service to fulfillment. They opened a pop-up store in a trendy Boston neighborhood with the tag line “Do You Dream in Color?” Then you can look at gemstones and create your ring on iPads and computers just like you would online. This idea may be better than Blue Nile’s for two reasons. One is that it’s their own spot – not a space housed in a department store. Two is that the idea of a retail store integrated with technology and fun is the way of the future.
Just like with Samuelson’s, it’s all about trial and error. It’s also about planning and a thought process. I’m sure these larger companies have put a lot of time and resources into these decisions. I think the only fail here may be a confused customer. It will be very interesting to see where this goes…
Posted on | November 28, 2013 | 1 Comment
Every year I give a report on the diamond market, what people in the industry are thinking, and even worldwide sentiment about the diamond industry. This year, it was very difficult to get a really accurate gauge into the market, being that it was so unpredictable. Here are some trends in 2013 that I am seeing.
Are you kidding me? Is this train ever going to stop? This category is by far the strongest in the diamond trade. Several colored diamonds set new records at auction including the 59.60 carat “Pink Star” which went for a whopping $83 million, and the 14.82 carat Fancy Vivid Orange diamond that realized a price of $36 million, or $2.4 million per carat, another world record. These are just two extreme examples, but even the market on small pinks and blues is out of sight.
Is bigger always better? In this market, the answer is YES! Most diamond dealers go after larger diamonds (3 carats and over) more aggressively than the run of the mill diamonds. I think that most people like having these diamonds in their inventory because they are harder to find, and (of course) they are really fun to look at! Actually, the truth is that smaller very high quality diamonds are much harder to sell which brings me to my next category.
High Clarity Diamonds:
These diamonds continue to be weak. IF and VVS stones, unless they are very large/rare, are trading a large discounts. Traditionally, the Asian market would eat these up, but the US market does not want these diamonds. The simple way to put it is that when you have a VVS diamond, it makes the price higher. Most consumers would rather sacrifice a little on quality to get a bigger diamond. And let’s be honest, who really needs a diamond with perfect clarity? A VS or an SI (or a really nice I1) clarity diamond can still look fantastic to the eye.
Average Size/Quality Diamonds:
These diamonds are very common and therefore, they bring average prices. Good quality SI salable diamonds are always around, so no one is getting very excited about them. However, there are always customers for them, and in our world they are flowing pretty nicely. We are making some nice rings, studs, and jewelry from diamonds like these so we are always buying. In fact, we have seen a very nice influx of 2 carat diamonds, and they always do well.
Very small diamonds, often referred to as melee, are diamonds that go from .01 carats (tiny tiny) to about .20 (one fifth) carats. We sell a lot of these goods that are removed from the scrap gold that we buy. Recently, the prices have been weak compared to 2012, partly because of the weakness of the Indian rupee. The Indian buyers used to love these diamonds, but are not consuming them like they used to. In my world of second hand (or recycled) diamonds, it seems like the more we can separate these diamonds, they higher price per carat we can achieve. In other words, if we sort diamonds by size, quality and shape into matched parcels, we will get more. However, this process is very time consuming and tedious, so we sort them up to a certain point. Then our buyer takes it a step further and it goes down the line this way.
Diamonds are steady, definitely steadier than metals! Gold and silver have taken a pretty bad beating over the last 2 years and diamonds have been very reliable. So we are heavy into diamonds and will continue to move forward towards our diamond buying and selling goals. Our philosophy is to buy diamonds strong, develop our customer base, and, more importantly, nurture our current relationships and make new ones so we are poised for growth.
Happy Thanksgiving – we are thankful for our friends, family, health and…DIAMONDS!
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