Is it possible to buy diamonds and engagement rings at wholesale prices?
Can I buy my engagement ring or diamond jewelry wholesale?
If you are the “End User” of that engagement ring or piece of diamond jewelry and if you are not in the business of buying from manufacturers with the intent of reselling to consumers, you can not buy your engagement ring wholesale. You may feel that you received a lower price than “normal”, which may seem like “Wholesale”, but you can not actually purchase your engagement ring wholesale in the truest and legal sense of the word.
Why can't I buy my diamond and/or engagement ring at a wholesale price?
Wholesale means to get the rock bottom price without the middle man from a wholesaler. That may seem like a bad explanation but I’ll explain. First the miners mine the diamonds. But there’s not much the public can use a mined (rough) diamond for, so diamond cutters are needed. The diamond cutters buy the diamond at the “miners” price. The diamond is now in the hands of the diamond cutter to cut the diamond, shape the diamond and polish the diamond. But diamond cutters don’t usually sell directly to retailers, they sell to diamond wholesalers. These wholesalers buy in bulk at the “cutter’s” price. Then the wholesalers will chose whether or not to have their diamonds graded by a lab (which would increase the price of the diamond, so many do). Once graded the wholesalers will then offer up their diamonds to retailers at the “wholesaler’s”, or “wholesale” price.
Diamond Wholesalers typically will never sell to anyone who does not have a Federal Tax ID number and possibly a state resale tax ID #, or the equivalent. Also many wholesalers require anyone they sell to, to have other reputable companies in the jewelry and diamond business vouch for them. Just in case, “vouch” means give personal assurance; guarantee that “they” are reputable. Just the same, the companies that hold the databases the wholesalers put their diamonds into to be seen by diamond retailers also do background checks and ask for vouching. This makes is very difficult, if not impossible, for the public to get a diamond or engagement ring at a wholesale price.
Jewelry is the same in many cases. Most of the people you buy jewelry from online or off do not make the jewelry. Jewelry designers and manufacturers do. The retail company you are buying from will buy from the designers and manufacturers. These designers and manufacturers also buy diamonds at wholesale so they have diamonds to set in their jewelry. Lastly, the makers of jewelry make retailers go through the same process the diamond wholesalers make retailers go through. The diamond and jewelry group is a very protected one.
2nd Reason Buying at Wholesale is not Likely.
Profits! If the retailer, online or off, sells their jewelry and / or diamonds at wholesale price they would not make any money, and their business would go out of business. Economics 101. Sell for more than you paid. However, you may run into deals such as Buy our engagement ring setting at our price and we’ll sell you the center diamond at “our cost” or wholesale cost. Saving the customer thousands of dollars, as diamonds can have a significant markup. This way, at least the business is making a profit on their engagement ring setting. Then again, even if they do sell a diamond to you at wholesale cost there would still be extra charges. If you pay for the diamond via credit card, or PayPal the business will be charged at least 2.5% to 5% of the actual cost of the diamond in credit card fees. Meaning if the company didn’t want to lose money on the deal, they would still have to charge you an extra 2.5% to 5% on top of the wholesale diamond cost depending on the card you use. You would have to use a bankwire transfer to avoid all charges, excluding, usually, a $20 bankwire charge charged by your bank. That’s why MANY online diamond retailers prefer bankwire transfers. It saves on the charges, they can pass the savings on to their customers and they have a chance at selling more.
Watch out for scams or misleading ads.
In many cases when engagement rings, and diamonds are being advertised for sale to the public as wholesale, they are misleading you, and possibly even committing fraud in some states / countries. This actually applies to most types of products for resale, not just diamond related jewelry. It is true that purchasing your engagement ring online can save you quite a bit of money, but you are still technically buying at “online” retail. That means you are purchasing affordable engagement rings, not wholesale engagement rings. The savings typically occur because when you buy online, you are enjoying a lower profit margin on that loose diamond or diamond engagement ring. This is possible because many online jewelers do not have the large overhead that a traditional brick and mortar jewelry store will have.
A word of warning. If you see a business advertising “buy at wholesale prices”, I, personally, would avoid them at all costs. If they will lie about the pricing structure to get you “in the door”, what else will they lie about? Be careful of the small words at the bottom of your screen. The words usually so small that no can read clearing them of any wrong doing while claiming they sell at wholesale prices.
Like I said above, it’s entirely plausible for company to remain in business and sell you a diamond at their wholesale cost as long as you pay their price on the ring itself. But a company that will offer this, will NOT use small words. They would explain themselves loud and clear, so as not to deceive any potential customers. Please keep in mind that you will not see many “sales” like this. The reason being, is the diamond and jewelry business is very cutthroat. Margins are not as big as you may think. Sometimes all a company will make on “that” piece of jewelry you are buying is $25 to $100. They are counting on the fact that you will also buy a center diamond with a better profit margin in it, so they can afford to stay in business. So it’s plausible, even possible, just not likely.