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Planning to buy a diamond for that special someone this holiday? Whether you're looking for an engagement ring, diamond earrings or another sparkler, this is a prime time for shopping. While jewelers expect to see a 10% drop in sales compared to last holiday season, 40% of consumers still plan to buy jewelry, according to a survey by National Jeweler. And about one in three of those said they plan to shop for diamonds.
In order to keep sales from lagging, many jewelers are offering incentives to buyers, says Ken Gassman, analyst for the Jewelry Industry Research Institute. "If you're inclined to buy jewelry, now is a great time to do so," he says.
Notwithstanding the prospect of attractive deals, purchasing a diamond can still be an overwhelming task. With a myriad of choices, a staggering range of prices and glitzy ad campaigns, how can you be sure to choose the right rock and get the best deal?
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Bypass the jewelry shop and get all the information and selection you need online -- you'll snag a better deal than you could at a traditional retailer. In an industry famous for high markups and perpetual closeout sales, diamond e-tailers have brought clarity and competition to pricing jewelry. Says Scott Devitt, a senior analyst at Legg Mason: "They expose diamonds for the commodities they are."
Lower costs
E-tailers' costs are lower than for local jewelers because they spend less on labor and leases, and they keep their inventories lean. Compare online jeweler Blue Nile with Zale Corp., which runs Zales stores, Bailey Banks & Biddle and other chains. For every dollar that Blue Nile pays suppliers for stones and settings, it sells finished baubles for $1.25. But for every dollar Zale hands suppliers, it sells items for $2. Zale also stocks its merchandise for months before it sees a dime from customers, while Blue Nile orders merchandise only after customers pay. As a result, it has to keep items in inventory for only a matter of days.
The minute you place your order at Blue Nile, for example, the company buys your rock from a New York cutter, who ships it overnight to Blue Nile's 27,000-square-foot warehouse in Seattle. There, a bench jeweler, peering through a magnifying visor and using files, pliers and hammers at a small desk packed with tool-laden drawers, marries the diamond to its setting. Other workers bathe the finished ring in a tiny hot tub, blast it with steam and pack it in a wooden box, inside a blue-and-silver box, inside a cardboard shipping box. It is then ferried on a rackety conveyor belt to FedEx for overnight delivery. The whole process typically takes just three days.
The procedure is similar at other e-tailers, which as a group rang up about $600 million in engagement-ring sales in 2007. Most of online sales are to men, who, in general, love the Web way of jewelry-shopping more than women do.
Skittish about buying baubles without seeing them in advance? That's an understandable hang-up. But recently many of the best grading reports -- a cross between spec sheets and report cards for diamonds -- added a fifth measure to the famous "four C's" guide to allow for easier comparisons among stones. Check out our buyer's guide at the end of this article to learn more about how to choose the right stone sight unseen.
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BLOOD DIAMONDS? | |||
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You may have heard about "blood" and "conflict" diamonds, which are gems that have been traded for money or guns to fight wars in areas of Africa. But don't worry about accidentally buying a conflict diamond, sales of which are illegal in the United States. The world's diamond suppliers have tightened up their supply chains to stamp out such problems. The major e-tailers, including Blue Nile and Whiteflash, pledge to exclusively sell diamonds untainted by violence. If you're curious how tightly diamond suppliers can track the sourcing of their diamonds, visit the trade Web site Diamondfacts.org. | |||
Best e-tailers
When selecting an e-tailer, you want one with access to a wide selection of diamonds, as well as responsive customer service, generous return policies and low prices. We used those criteria to size up seven of the leading sites: Amazon.com, BlueNile.com, Diamonds.com, Ice.com, JamesAllen.com, Overstock.com and Whiteflash.com, and we found two standouts.
The best online jeweler is Blue Nile, which recorded diamond jewelry sales of $320 million in 2007. It can tap a pool of 60,000 diamonds that it has exclusive rights to sell online. The store lets you return an item 30 days from the day it ships. Most calls are answered within ten seconds by an employee in Seattle. And its prices are among the lowest. For example, it was recently charging $6,550 for a 1-carat round stone of good but not flawless quality, which beat other sites' prices for similar stones. The site also has the easiest search features. You can search by the criteria most important to you and you can search for multiple diamond shapes simultaneously.
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