Diamond Buying Guide

Before purchasing a diamond, it is important to get a general idea of the type of diamond that can be bought for the amount of money you wish to spend.  A slightly larger stone can be purchased for a given amount in exchange for a slight reduction in the color and/or clarity of the stone.  My general recommendation when buying a diamond, however, is to stay with better quality stones rather than greatly diminishing the quality for the sake of size.   But that does not mean that the stone cannot have some minor inclusions or that the stone cannot have some body color to moderate the price, as long as neither one of these qualities is carried to the lower extremes.  When balancing the characteristics of the stone you wish to purchase with the amount of money you are comfortable spending, never sacrifice the cut of the diamond.  A diamond with a poor cut, as we have learned, will never emit its maximum beauty no matter how good the other characteristics of the diamond may be.  There are many stones that may have a number of imperfections and yet, when mounted, still look beautiful.  The same applies to the color of a diamond.  By purchasing a stone with a slight tint (which might not even be noticeable when the diamond is mounted), the price of the diamond can be reduced while maintaining the size of the stone you wish to purchase.

Differences in cutting and other gemological factors can cause the price of two diamonds with the same weight, color, and clarity grades to vary in price by as much as 70%. (Even for round diamonds with the same GIA cut grade, prices can still vary by 30%!) It is very difficult to shop for diamonds since it is almost impossible to compare the quality of a diamond from one store to another.  Therefore, instead of shopping for a diamond, look for an experienced and qualified jeweler.   Shop as carefully for your jeweler as you would for your doctor or lawyer, since you will have to depend on him to help you with your decision.  When you talk to a jeweler, see how he approaches subjects such as diamond grading and the usage of the grading system.  Pay particular attention as to whether he places emphasis on the cutting and proportioning of his diamonds, since many jewelers find cut grading a difficult topic which even they, themselves, do not fully understand.  Unless the jeweler has gemological training and years of experience in the jewelry business, these are the areas that he is most likely to gloss over or totally disregard.  It is just as important to deal with a well-established company.  Remember, M. Martin and Company was established in 1939 and will continue to serve you for many years to come.

Tips on Buying Diamonds

CHECK THE CREDENTIALS OF THE JEWELER
FROM WHOM YOU ARE BUYING

While many jewelers may be well-intentioned, their lack of gemological training may hinder your purchase of a quality diamond.   Even certificates accompanying a diamond should be double-checked by a credentialed gemologist for accuracy.  Always ask the jeweler beforehand if he is a GIA Graduate Gemologist and ask to see his credentials. All sales people at M. Martin and Company hold credentials from the Gemological Institute of America. 

PURCHASE A DIAMOND FROM A
WELL-ESTABLISHED STORE

The best guarantee in the world is of little value if the store will not honor it, or if the store goes out of business.  M. Martin and Company was established in 1939 and is now one of the oldest jewelry stores in Chicago.  We stand behind our diamond grading with a written guarantee!

PURCHASE FROM AN EXPERIENCED, ACCREDITED GEMOLOGIST
WHO CAN VERIFY A CERTIFICATE'S ACCURACY

Larger, quality diamonds should be purchased with an accompanying certificate from an independent laboratory. However, the consumer must realize that the certificate should only be used as a guideline to the diamond’s individual characteristics and not as a final determinant of the diamond’s overall quality. Even if the diamond you are purchasing has a certificate, it is still important to purchase the diamond from an accredited and experienced gemologist who can verify the accuracy of the certificate. Some smaller diamonds, and diamonds already set in jewelry, will not necessarily have a laboratory certificate. In this situation, the consumer will have to trust the store’s determination of the diamond grades. Unfortunately, it is not uncommon for unethical stores to substantially inflate diamond grades. This is why it is important to purchase your diamond from a reputable, established jeweler.

TRY TO LOOK AT YOUR DIAMOND IN A NATURAL LIGHT

Most stores display their diamonds under strong halogen lighting that is made especially for jewelers.  You want your diamond to sparkle on its own and not because of an intense light source shining on it.

AVOID BEING MISLED BY SALE PRICES THAT GIVE
THE APPEARANCE OF A LARGE DISCOUNT

Stores can mark up jewelry as much as they want in order to give significant (though generally fictitious) "discounts."   Often, items of jewelry that are advertised in newspapers, catalogues, and on the internet as "on-sale" are what we call promotional items -- low quality jewelry which is advertised as a "leader" to lure you into their store (or cyber store).

USE YOUR OWN EYES TO JUDGE THE OVERALL
APPEARANCE OF A DIAMOND

Ask to inspect the stone under ten-power magnification.  When possible, ask to see other diamonds with which you can compare the diamond you are buying.  Try to use your own judgment as to the beauty that a stone projects rather than relying solely on the stone's ratings.  Because ratings cannot take into account all of the subjective and non-subjective factors needed to evaluate a diamond, they can only give you a general idea of the quality of a stone.  Remember that stones with the same color, clarity, and weight can vary in price by as much as 70%.

                                                                IT IS IMPORTANT TO REALIZE THAT ONLY ABOUT 5% OF ALL DIAMONDS
                                                                             ARE CUT TO PROPORTIONS NECESSARY WHICH GIVE
                                                                                     THEM MAXIMUM BRILLIANCE AND BEAUTY.

Ironically, rough (uncut) diamonds of high color and clarity are as likely to be cut into "off-make" stones as low grade rough.  The reason for this is that when a cutter is cutting a diamond from high-quality expensive rough, leaving excess weight on the stone may bring him a higher market price than if he reduces the weight by properly proportioning the diamond.  Be sure that you deal with a jeweler who is well versed in all aspects of cutting and proportioning, and who maintains high standards for cut quality. 

DIAMONDS THAT ARE CUT IN "OFF-MAKE" PROPORTIONS GIVE THE CONSUMER
THE ILLUSION THAT HE IS GETTING A BETTER VALUE

However, just the opposite is true.  Take the previously mentioned example of the .85 carat diamond that was cut with improper angles to bring the weight up to one carat.  When a jeweler buys such a stone, he buys it not at the one carat price, but at the .85 carat price (the price the diamond would have cost had it been cut properly).  However, the jeweler then sells the diamond to his customer at the one carat price because the diamond does indeed weigh one carat.

IDEALLY PROPORTIONED DIAMONDS WILL CONTINUE TO BE
A BETTER VALUE THAN "OFF-MAKE" STONES

If an "off-make" diamond is sold or traded, the value of the stone will be based on the reduced weight to which the diamond should have been cut had it been properly proportioned, and not based on its current weight.  This calculation is the "weight correction factor" of the diamond, and is a basic technique used by gemologists when evaluating a diamond.  Therefore, the resale or trade-in value of an "off-make" stone is considerably less than that of a well proportioned diamond.

LABORATORY GRADING REPORTS HAVE LIMITATIONS

Do not depend on the depth and table parameters stated on a certificate to guarantee that you have a diamond with a quality cut.  By using various techniques, the cutter can cut a poorly proportioned stone and still have its parameters fall within the numerical laboratory guidelines of a properly cut diamond.   Therefore, the parameters established by the various laboratories can only be used to eliminate improperly cut diamonds; they cannot be used to ensure that the diamond is properly cut. GIA's new cut grading system for round diamonds can help the consumer eliminate improperly cut diamonds.  However, the system is just one of laboratory measurements, and even stones in its top cut grade of "excellent" can vary dramatically in beauty, brilliance, and, of course, price.  Another example relates to the quality of the diamond material.  Some diamond material may be "grainy" under a microscope, but the very best shows as "crystal."   Since the laboratories have no way yet of measuring this characteristic, what may be a serious deficiency is not noted on the certificate.  

EACH DIAMOND GRADE COMBINATION IS NOT JUST ONE SINGLE PRICE

For any given weight, color, and clarity combination there will not be just one single price, but  rather a range of prices defined by the quality of the stones' cuts and other gemological factors. When researching a particular weight and grade, you will typically find many diamonds clustered into a specific price range. However, with a more thorough investigation, you may occasionally find a diamond of the same grade at a somewhat higher price. If we assume for sake of argument that the higher priced  diamond is indeed a quality stone, then we can be assured that the majority of the diamonds clustered in the lower price range are of less than optimal quality.  In other words, do not expect a diamond that falls in the lower to moderate price range of that specific grade combination to be a quality stone.

Important Information About Today's Diamond Market

Due to the control of the diamond market by De Beers, diamonds have steadily increased in price throughout the years.  This trend is expected to continue since De Beers regulates the flow of both the rough and polished diamonds to the world markets.

Cutting continues to be an area of major concern for the consumer.  Once the color and clarity grades of a diamond have been established by the certificate and verified by the gemologist, cutting is the last major characteristic that can be varied.  Diamond cutters know how to shift facet angles in such a way that the diamond will appear to have the proper proportions on the certificate, yet not be an optimally cut stone.  The result of this cutting technique is often extinction areas in the stone which result in diminished brilliance.  The consumer must realize that each grade does not establish just a single price, but a wide range of prices (controlled by De Beers) which is dependent on the quality of cutting and the resulting beauty of the diamond.  As long as jewelers find it more profitable to sell "off-make" stones whose prices will be in the lower end of the established price range, cutters will continue to produce them.  The certificate should only be used as a general guide detailing some of the characteristics of the diamond.  The consumer should be most concerned that the jeweler they are buying from is an experienced and credentialed gemologist well versed in all aspects of cutting and diamond valuation.   Although we hope that the quality of cutting will improve in the future, we see no signs of this happening at this time. 

The following are a few of our most frequently asked questions:

From what sources do you get your diamonds?

Although we deal with over a hundred diamond cutters, our finest stones come from just a handful of our top cutters. The rest of the cutters we do business with are used to provide lower quality diamonds that we sell to other stores, dealers, or to internet companies.  Every diamond cutter we deal with has a Kimberly Process Certificate to assure you that no diamond we sell comes from any "conflict" area of the world.

How many diamonds do you look through before you buy one?

It depends on the cutter. Our finest cutters are, of course, the ones from whom we will have the best chance of finding beautiful stones we wish to purchase. Having developed relationships with these cutters over the years, they know that we have very high standards, and that only their best will meet our specifications. With other cutters, we may look through a hundred stones before finding just one. Sometimes we look through hundreds of stones and find none that we wish to purchase.

What kind of documentation do you provide?

Diamonds (and important colored gems) will have a certificate from GIA or in some cases from Professional Gem Sciences, both fine independent laboratories. We double check each certificate for accuracy, and reject many stones because we do not think the grade is correct or that the certificate is accurate. We also furnish an appraisal on the completion of each piece of jewelry. This appraisal will be accepted by any insurance company. We offer a written guarantee with a full trade-in policy on our solitaire diamonds.

I was shopping around and diamonds graded by the EGL (European Gemological Laboratory) were all priced lower than GIA graded stones and seemed to be better deals.  Why is this?

They aren't.  The EGL Laboratory, which formerly adhered to GIA's grading standards, no longer does so.  It will typically grade stones three to five grades higher than GIA.  Whle this increases the profits for the cutter and the jeweler, the consumer, of course, is the one getting short-changed.

Do you do insurance replacements?

We do replacements for all the major insurance companies.  We analyze the specifications of the jewelry item to be replaced to ascertain that the customer is being adequately compensated for any loss he or she has incurred.  If necessary, we will negotiate a proper settlement on behalf of the customer.

What do you think is the biggest problem today facing the consumer purchasing a diamond?

We think that cutting is the hardest area for the consumer to understand. Even the two major gemological research laboratories in the United States are not in complete agreement as to what necessarily constitutes the best proportions for cut. Also, we are now seeing many diamonds cut so that the depth and table specifications may look correct on the certificate, but the stones themselves lack beauty and brilliance. Typically, these stones will show a lot of dark areas, or extinction areas, when the stone is subjected to light. While GIA's new cut grading system for round diamonds is helpful to the consumer buying a round diamond, it is a system based on measurements alone and not on the diamond's beauty. Remember, there is a difference as to how a diamond measures and how it performs! 

What do you think is the industry's biggest problem?

Although the diamond grading system measures many of the characteristics of the diamond, the beauty of the diamond has been eliminated from the appraisal process. We see many stones that are not beautiful, but, because they rate high on the color and clarity scale (and in the case of round diamonds, may even have a high cut grade), command a high price in the marketplace. This causes a lot of confusion to the diamond buyer.  For this reason, the following is printed on every GIA certificate:   "Since the color, clarity and cut grades of a diamond often represent ranges of appearance...individuals should view the diamond rather than relying solely on the report information before making purchasing decisions."

Do you feel you are competing with internet companies selling diamonds?

No. First, we too, sell to internet companies.  The consumer does not realize that internet companies do not stock diamonds, but instead just order them from a small number of commonly used diamond databases.  The diamonds we have been most successful with selling through internet companies are those that are "paper pretty" stones.   In other words, these stones look good on the certificate (and on the computer screen), but have serious gemological shortcomings that allow us to post them at seemingly "bargain" prices. (At first, we tried selling quality stones, but we quickly found that did not work).  Since these diamonds are sold through other companies, their lack of quality doesn't reflect on our reputation for fine diamonds.

Second, people are under the misconception that internet companies can sell at low markups because they have lower overhead.  The fallacy in this is that not only do internet companies have to maintain offices (bricks and mortar), pay insurance, and pay employees and executives of the company (Blue Nile, for example, has 170 employees to pay), but they also have to employ a full information technology staff to design and maintain their web site.   Their overhead is actually considerable, though it might be less than that of a full retail store.  Retail stores on the street or in shopping malls have extremely high rents and, of course, their insurance is often nothing short of astronomical.   As an example, the markup at Tiffany's is 138%, Zale's is 100%, and Blue Nile's is still quite high at 29% (source: annual reports of the respective companies).

M. Martin and Company can bring you the best of both worlds.   We keep our overhead low (our upstairs location in the Jewelers Center keeps our rent and insurance minimal).  So, not only are our margins CONSIDERABLY LESS than that of even internet companies, we can bring you the quality that you will find only at the best stores at prices that even internet companies cannot match.

M. Martin & Co.

M. Martin and Co. Wholesale Jewelers, Inc., is a wholesale jewelry and diamond import company that is located at 5 S. Wabash, Suite 611, Chicago, IL 60603.  It is a family owned and operated business that was established in 1939.  M. Martin and Co. imports diamonds and other gemstones from overseas and maintains an interest in a diamond cutting firm in New York City.  The company does its own jewelry designing and manufacturing and specializes in finely cut diamonds.   For diamond consultations or for more information about purchasing a diamond, please call (312) 263 - 4957.

Written by Steven R. Martin, Graduate Gemologist (GIA), BSEE, MBA, President of M. Martin and Company.
Edited by Randye P. Martin and Meredith A. Savill.
Copyright 1984, 1988, 1994, 1998, 2003, 2006 by M. Martin and Company.All rights reserved.  Reproduction in any form without prior written permission of M. Martin and Company is expressly prohibited.
The online version may be downloaded for your personal use.

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