Diamond Rough Appraisal of Production Potential for Parcel Lots and Important Single Rough Stones
- Monetary wholesale valuations for country of origin and local current markets
- Production options on any given single stone or parcel – this includes gemstone potential and/or industrial usage valuation for certain types of diamond rough
Rough Diamond pricing is not a “clear cut” matter. Correct pricing “just depends”. I will explain and elaborate briefly.
You as a buyer have specific requirements based upon your end goal which ultimately must yield a profit.
For example, if you’re a dealer (non-cutting manufacturer) in New York City, and your customers are in the New York area, more than likely you can afford to work on a thin margin if the goods are sold quickly without credit terms or other insecure payment complications. Based upon this business model a “Diamond Rough Price Report” can be made that focuses upon a range of rough types that such a dealer would consider buying or brokering with the “big picture”, that accounts for competition and expenses.
Other examples could be a buyer in the DRC (Democratic Republic Of Congo) accessing aboriginal miners in there mining operations. The miners want to sell everything, not just their better goods. The buyer needs to understand that fact, as well as understanding the correct value of all the grades and sizes being presented. The miners have there own idea of Diamond Rough values, based upon their past sales or offers, word-of-mouth legends, and their own price dreams. Others factors must be considered like:
A) The government export tax based upon their assessment (not your cost)
B) Complete expenses for the entire trip
C) Cost of shipping and import customs
D) Your profit goal
Every location has unique circumstances and specific costs associated with that place.
Russia – Dealing with some of the large now corporate mining conglomerates with offices in Moscow has its challenges. Hotels and other costs add up quickly. If you’re spending millions it is not an issue, but if your purchase goal is in the high 5 or low 6 figures, expenses have there impact. Be prepared for corporate parcel assortments and strict grading.
Dubai in the United Arab Emirates certainly has a unique set of protocols. Working with the dealers and international traders there has its pluses and minuses on a cost level.
Every “BUYER” has their own position within the Industry. There are a wide variety of prices to be paid for the exact same goods, and they may all be correct. A cutter who adds intrinsic value to a given stone or parcel after processing can generally outbid a dealer on the same goods assuming they have adequate capital. Both their offers were correct, based upon their positions. The seller may even favor a slightly lower offer depending upon their own assessment of the buyer and a possible future relationship.
There is much more to be said about “correct market pricing” but the focus of this introduction to our customized “Diamond Rough Price Report” must be clarified and presented to show that knowing your own pricing is simply one step in buying.
Knowledge of grading with all its nuances is the foundation that any responsible buyer must stand upon. Without true hands on knowledge of Diamond Rough grading and evaluation, as well as knowledge of “payout purchase pricing” with accountability considerations for the ultimate “bottom line”, a dubious over-confident buyer or purchasing agent is nothing short of a gambler…
Know the intricacies of your business and you’ll have a future. Illusions and “Gold Rush” or “Diamond Rush Fever” thinking always ends with the reality of loss and disappointment. Rational, cool-headed knowledge, along with well thought out methodical business methods, are the bricks and mortar of sustainable success.
Please call me directly if you or your company would like to know more about this customized, very specific “Diamond Rough Price Report” that is produced on an individual proprietary basis. In order to enhance the creation of this report – which is a process – an extensive interview covering the specifics of your goals and business model will be an important asset in its creation.
Kenneth A Glasser