In today’s high tech business environment, contacts and experience are rapidly being replaced by keyword searches and review websites. Not so in New York’s 47th Street Diamond District. Hidden within this one block stretch of understated NYC property sits a $100b a year industry – America’s wholesale diamond trade. Diamonds stores in NYC and around the country source their product from these deal makers, where the term “negotiation” takes on an entirely new meaning.
If you stand on the street, you will see a flurry of activity. Diamond couriers wearing traditional Hasidic clothing sport underarm satchels hidden inside their garments. These folks are sometimes moving millions of dollars of jewels from store-to-store for customers to view. Because they are so understated, they are completely safe in their travels. In this community, contracts and invoices are replaced with handshakes and generational business dealings. It has been this way for hundreds of years and makes diamond exchanges expedient. In this part of town, when they are not dealing merchants enjoy talking on the phone about the theoretical value of a 15-carat, VS1, emerald cut diamond, because the rumor is that one has arrived on the street and will be shipped out soon. Ground level jewelry stores house dozens of merchants, each of whom have jewels of enormous value sitting just a few feet away from the counter in a 5 foot tall gray jeweler’s safe, Yes, these are the Titans of the diamond industry. These folks are to stores like Zales and Kay Jewelers what investment bankers are to bank tellers. In the same business, but not really…
You didn’t come here to get a history lesson on Diamond Row. If you are reading this you are either curious, or more likely thinking, about buying a jewelry in the District very soon. You want information and strategy, not the history of NYC diamonds. Let’s talk specifically about how to maximize the result of your visit to the Diamond District.
Educate – before you walk into a diamond store, you’ll need to understand the basics. Knowing a little about color, cut, clarity and carat is just the beginning. You’ll also want to know what makes a diamond beautiful, reputable vs. non-reputable grading labs, and a thing or two about imperfections (virtually all diamonds have them).
Price compare – the single biggest mistake that anyone can make when entering a negotiation is to use a starting and ending price point from the same jeweler, with no independent third party benchmark. Yet this is exactly what over half of all people do when shopping in the Diamond District. Imagine that Jeweler John Smith at 10 W 47th Street is offering a one-carat diamond of VS2 clarity, excellent cut, F color and certified by GIA. His starting price is $8500, but through your use of the words “is that the best you can do,” you “talk him down,” to $8200. You feel good about the drop in price and buy the diamond. With the information just presented, do you know if you got a fair price?? No, all you know is that you paid less than his asking price. In order to determine how well you did, you need a few independent price points to know what is fair and what is not.
We recommend that our readers go to either online diamond store James Allen or Zoara (or both!) to price out their diamond of interest, before gong to the jeweler. There you will find out what a competitively priced diamond should cost. Once you know this, then the next step is to visit several jewelers giving each your exact specifications of carat, cut, clarity, color AND GIA certification. Only then are you in a position to know what is a fair price and what is not.
Execute – then it just comes down to execution: you’ve found the jeweler, you’ve found the diamond, you’ve found the price – the rest is up to you.
Go Get “Em!