Whether you’re buying an engagement ring or investing in the stones themselves, there are certain ways to make buying diamonds as cost-effective as possible. Buying online, purchasing second-hand or simply finding online discount codes are all ways through which you can get more bang for your buck. Another approach industry insiders regularly advise is to buy diamonds at certain times of the year, taking advantage of fluctuating prices, depending on demand. For instance, in an ordinary year, it’s not a good idea to buy diamonds around Christmas or Valentine’s Day.
But of course, 2020 has not exactly been an ordinary year, with the COVID-19 pandemic overshadowing every aspect of our lives. With no one able to say for certain how long things will remain the way they are, customers have a unique opportunity to buy diamonds at a cut price.
COVID-19 has hit the diamond industry hard
Since the world went into lockdown, the economic ramifications have hit consumers’ pockets hard, causing the demand for diamonds to plummet as a result. While the gems can still be bought online, jewelry shops traditionally account for 90% of all diamond sales. So even though they are still readily available to buy, sales have dried up. For example, diamond miner Alrosa reported a 60% fall in sales during March 2020, compared to the previous year.
Meanwhile, according to Business Insider, De Beers made just $35 million during a sale in May, compared to $400 million during a similar event in May 2019. This situation has led to a pile up of billions of dollars’ worth of diamonds around the world, with the world’s five major diamond suppliers having around $3.5 billion worth of excess stock. This could rise to $4.5 billion (roughly one-third the value of yearly diamond production) by the end of the year.
From the top down, the cost of diamonds has plunged thanks to the dwindling demand, with some miners cutting prices by up to 25%, while New York-based diamond analyst Paul Zimnisky told the Financial Times that prices for rough diamonds dropped 15-20% in March. And this has inevitably trickled down to traders. For example, the Rapaport Report’s widely-used diamond price list has reported steep drops for a massive variety of gems, with an average decline of 7%, and some categories down by up to 9%.
Cut-price online sales are the way forward
For consumers, there is huge potential to benefit from just how cheap diamonds currently are. While most brick and mortar diamond stores are closed, diamond vendors are encouraging people to buy online instead. Take mining giant Alrosa, which ran its biggest ever digital tender in early June, or De Beers, which unveiled an entirely new website to compete with its e-commerce competitors.
According to Diamond World, De Beers improved online presence offers customers “a personalised, content-rich and educational diamond discovery experience,” including intelligent search and filtering tools, product videos and 360° images. Even though some potential buyers may be concerned about making such a big purchase online, incorporating this level of detail — which is commonplace on most jewellers’ websites — will help them find exactly what they are looking for. Furthermore, it allows consumers to gain a comprehensive insight into the products, helping them to make informed purchasing decisions.
However, consumers should act swiftly. With lockdown measures being gradually lifted around the world and diamond stores starting to reopen, demand is already starting to rise again. Which is to say you shouldn’t expect these low prices to be around forever.
What to consider when buying diamonds
As you’ll be paying less for diamonds than before, you might be able to afford a more lavish stone as a result. Whatever you choose, you must consider the four Cs — cut, color, clarity and carat — as all of these affect the look and value of a diamond.
Cut
As noted by jewelers Taylor & Hart, “diamond cut is essentially all about how well the facets of the diamond interact with light.” Instead of shape, you want to take into account aspects like a stone’s symmetry, its proportioning, and polish when considering its cut.
Color
A diamond’s appearance is massively impacted by its colour, which ranges from D (colourless) to Z (light yellow). The less colour the stone has, the more valuable it is, as colourless gems can better reflect flashes of light in a wider range of hues.
Clarity
The diamond clarity scale ranks gems depending on their natural inclusions and blemishes, from IF (internally flawless) to I3 (included grade 3). Diamonds with fewer imperfections are rarer and more valuable, and buyers are usually advised not to go lower than SI (slightly included) in clarity.
Carat
Carat refers to a diamond’s weight, with one carat equalling 0.2 grams. Generally speaking, high-carat diamonds are more valuable, though the other Cs are also taken into account when determining price.