While working seven years in the diamond and jewelry industry, Jacob Worth from I Want What It’s Worth has learned a lot about diamonds and their value. Equipped with a hidden camera, he visits the iconic diamond stores – Tiffany and Co., Cartier, Harry Winston, and Van Cleef – to find out the real value of diamonds and the profit margins that these shops make.
‘Diamonds are complicated. Overly, ridiculously complicated,’ writes Jacob in his post. He continues, ‘Millions of variations, thousands of prices. This over complication was all set up, intentionally, for a very good reason: Make it very difficult for the average customer to buy a diamond ring on their own.’
For those prepared to spend big buck for a luxury item, there isn’t much choice but to trust the perceived trustworthy few experts. As an alternative, they might spend days and weeks researching for quality stones and still fall victim of fraudsters. “At least with them I know I’m buying the best quality diamonds,” a belief that is deeply planted in our psyche by means of sublime visuals. Like the one Lady Gaga was hired for. The visually pleasing black and white Tiffany & Co. video starts with words spoken by the singer: “You are born knowing Tiffany is the best…
‘The ability to convince the customer they are trustworthy is what matters,’ writes Jacob. ‘In the case of well-known brands like Tiffany and Co., that trust is automatically perceived—which gives them carte blanche to charge whatever markups they’d like.’
‘With online diamond prices being so transparent, brand name jewelry stores are worried their diamond prices will be compared to online prices. Stores have become very defensive of their diamonds’ exact statistics. They ban all photography in stores and don’t list any tangible information on their websites.’
Undercover, Jacob requests to only see solitaire rings. Which is just a plain platinum band with a diamond. His investigation demonstrates how all visited stores claim to have ‘the best quality diamonds on the market, superior to those of other brands,’ which is not correct. The investigation reveals that luxury jewellery brands charge between 253% and 336% profit margin compared to the market price of the jewellery. The ‘investigation’ further reveals that exactly the same quality stones can be purchased in Costco for the fraction of the price.
And while Jacob is an interested party – I Want What It’s Worth sell restored pre-owned jewellery, – the findings he shares are indeed insightful.
Anyone willing to invest in luxury and, in particular in certain brand, because they feel strongly about it, should absolutely do so. The luxury brands, on another hand, should avoid making ungrounded claims of stones’ superiority and engage with buyers by sharing the vision and ethos of the brand. It’s perhaps something new Tiffany’s CEO will be pondering on quite a lot in coming months.