In 1978, Martin Rapaport released the first “Rapaport Diamond Report”, a wholesale diamond price list for traders. While much maligned at the time, it has slowly become accepted –price lists are released monthly– and is now a staple of transparency in a once-secretive industry.
While the Rapaport Diamond Report is the baseline, the diamond market does not strictly adhere to the price list. So what are the quirks?
For instance, diamond traders will prefer not to choose exact diamond weights, such as “2.00 carats”, because if the stone were to chip for whatever reason and go for a re-cut, the stone would dip below 2 carats and lose a lot of value. Also, since higher colors and clarities are listed for much higher prices on the report, consumers usually make up the difference by choosing better deals. Thus, wholesalers and traders will give less of a discount on certain stones, as the demand remains strong.
For instance, a diamond weighing 1.99 carats will cost less than a 2.01 carat stone. However, the discount from the price list for the 2.01 carat might be -20%, whereas the discount on the 1.99 may be -10%. That's because the 2.00+ carat stones are on another part of the price list and thus command a much higher market price. The 2.01 is worth more – however, exactly how much more is still up to the market, rather than the list.
While much has been made of retail markups at jewelry stores, the digital age has made information more accessible than ever and given diamond buyers the transparency they've needed for decades. While large retail shops or jewelry brands still maintain larger markups than local jewelers and online vendors, customers have a vast array of choices and can choose what they value – be it brand value, design, or price consciousness.
While the diamond industry awaits the release of the Rapaport price list every month, it is important to remember that it is the market that sets the list price – not the other way around.
