The True Cost of Jewelry

How the industry works

Diamond Producers - there are a limited number of diamond producers, such as DeBeers, who own diamond mines, harvest diamonds and then sell the raw diamonds on the open market. This supply of diamonds is carefully monitored and has a direct relationship to the price of raw diamonds. The oil industry is similar in nature, where the availability of crude oil from the OPEC cartel directly affects the price of oil related to products like gasoline. In a similar way, the supply of diamonds causes the price of the product to fluctuate accordingly. No one other than the diamond producers has much control. Finally, these diamond producers only sell their product to a limited number of diamond suppliers.

Diamond Suppliers - rough diamonds from the diamond producers are then sold to diamond suppliers, who then take the rough product, cut it, clean it and polish it. The product is then sold as “loose” diamonds. Many of these diamond suppliers are in countries like India or Israel and have been family businesses for decades. It is from these diamond suppliers that the supply of loose diamonds is bought by jewelry manufacturers.

Jewelry Manufacturers - jewelry manufacturers take the ”loose” diamonds and create ”finished” jewelry. The cost formula of creating finished jewelry is pretty simple:

For jewelry manufacturers, labor and gold are commodities that are simply bought for the fair market value. Look in any newspaper or on the internet and you can quickly determine the current gold prices. Labor prices will vary, depending upon geographic location, but can be relatively simple to determine. The cost of diamonds is the largest variance. Jewelry manufacturers who have good relationships with diamond suppliers are obviously more successful. Time tested experience and knowledge is necessary to be able to identify good deals when they present themselves.

Jewelry manufacturers then sell “finished products” to jewelry wholesalers and jewelry retailers.

Jewelry Wholesalers - in the past, jewelry wholesalers have been distributors of finished jewelry to many retailers in the marketplace. They typically would sell the product with a mark-up in price, to cover their sales, marketing and distribution costs and to generate profit.

Jewelry Retailers - there are a wide variety of different types of jewelry retailers. independent jewelers are typically single store locations, family owned and located in almost every city or town in the United States. Large retail chains are often regional and located in major malls. Large retailers such as Walmart or Penney’s have self-standing stores featuring dedicated jewelry departments.

In many of these instances, there is a tremendous cost of retailing jewelry. Commissions, brick and mortar stores in prime locations, advertising and marketing costs and the huge expense of stocking the inventory.

The REAL cost of jewelry

As you can see, by the time a finished piece of jewelry reaches the consumer, it has incurred many layers of cost. Let’s review these costs:

On top of all of these costs, each of these groups expect to make a profit from their efforts, with jewelry retailers often making the highest $ profits.

The buyDazzle.com model

You can begin to see how the cost of jewelry grows exponentially as it is ultimately sold to the consumer. At buyDazzle.com, our goal is to eliminate much of the middleman costs. By making a purchase from buyDazzle.com., you are buying directly from the jewelry manufacturer. You are not paying the additional costs incurred from the wholesaler or retailer. Because we can sell and market via the Internet, you are not paying sales commissions, brick & mortar stores and warehouses, advertising and marketing, and inventory holding costs.

In fact, you are buying from a very cost-effective jewelry manufacturer. We have developed strong relationships with diamond suppliers throughout the world. Much of our merchandise is bought, manufactured and sold within 60 days, allowing us to minimize inventory holding costs and continually adjust our product offerings to the demands of our customers. We keep our costs down by running a cost- effective jewelry manufacturing business. This allows us to pass along great savings directly to you.
No middlemen, just great savings!!