Okay, first the disclaimer: I am not in the jewelry
industry. I am not a professional buyer nor am I an industry insider. I am just a guy who needed to buy an engagement ring, chose to do so in Manhattan’s Diamond District and did far too much research. Since my Diamond District experience, I have found myself giving lots of advice to friends and acquaintances concerning the nuances of the District and how to use them to the buyer’s advantage. What follows are several hints and stories which will hopefully make the reader’s experience in the Diamond District a little less stressful and a lot more profitable.
First, an idea of what to expect. After buying my engagement ring I described the process to a friend by likening it to purchasing a prostitute in Hanoi: it’s a situations where the supply far exceeds the demand meaning that the sellers – many of which have a thuggish quality to them – can be very upfront and aggressive. You can expect an afternoon of moving from one shady stall to another, starring at diamonds which may or may not look exactly the same yet differ in price by thousands of dollars. The salesmen are ubiquitous and will not simply let you browse. Some will even stand out on the street and openly solicit you for business if you so much as slow down near their door. And then there’s the haggling; buying a diamond on 47th street makes car-shopping look like a walk in the park. So why do it? The answer is simple: money. In the Diamond District you can generally pay less than half of what you would pay at national chains like Zales.
Importantly, the same elements that make the Diamond District an uncomfortable and intimidating place also can give buyers a huge advantage. The trick, of course, is knowing how to create and exploit your advantage as a buyer. It is here that I may be able to offer some suggestions. First, know the basics. Learn about color and clarity rankings. Study the certification process and how to read the certificates. Most importantly, know what you want – have a good idea of what type of cut and setting you are interested in and establish a realistic price range. By learning this information ahead of time you’ll be able to speak the salesmen’s language and as such you will be treated with a great deal more respect. The vendor’s impression of you is important. If he or she believes that you are someone they can take advantage of and make a hefty profit off of, they will. On the other hand. if the vendor believes you to be someone who understands individual diamonds and the market as a whole, he or she is likely price their stones competitively on the assumption that you know what you are looking at and will not tolerate outrageous offers.
When shopping in the Diamond District, you can certainly visit the shiny and well-kept storefronts. These stores will offer the widest variety of high quality stones in an atmosphere which is relatively comfortable. However, if you are looking for a good price, you will want to go to one of the many diamond exchanges – the large open spaces where vendors work from small stands and not individual stores. Visit as many stands as possible, even those that look slightly shady. Doing this will give you a good idea as to pricing and will help you get a sense of whom the best sellers are.
A tip that I found helpful in the buying process was that one should not automatically avoid vendors selling uncertified diamonds. Stores selling uncertified diamonds can generally go lower in price than other stores because they are the true wholesalers. What someone should do if they are buying from a store selling uncertified diamonds is work out a deal contingent on the diamond being certified. There are experts in every one of the diamond exchanges who can certify diamonds in minutes. Their nominal fee – usually around $50 – can result in you getting a stone for hundreds of dollars less than had it been already certified.
So, after doing some wandering and getting the feel of the district, its time to return to the places who had something special to offer. Of course, here is where the bargaining comes in. Any price you are quoted, while seemingly cheap, can be brought down by as much as half before a final agreement is reached (notice that you’ll never see a pre-marked price on a diamond). I found that weaving a story put me in a favorable position when it came time to bargain. First, I casually mentioned to the seller that I was in town for a few days and, although I was sure I would be buying a stone, I had set aside this day to simply look, not buy. The typical response this elicited was “well if you’re hear let’s see if we can work out a deal now”. The seller, thinking that he or she was getting first crack at a buyer, was generally willing to make a pretty attractive offer – keep in mind, if I walked out that door, the odds of them ever seeing a commission from me were slim. Even after a good offer I stuck to my guns: I wanted to see all the options first. Of course, story or not, this is a good idea since, once you have an offer, you can always come back to a vendor. By this point, I would often get the line “well at what price would this stone have to be for you to walk out the door with it today?” This is the time to make the kill. You already have a good offer from the seller and you both know there are hundreds of other places you can go to if nothing works out. Knowing that, I generally tossed out some ridiculously low number. Some vendors said it could not be done and came back with a counter offer. Others simply rolled their eyes. Much to my surprise one of the sellers went for it! It was 50% off the price he originally quoted and thousands of dollars lower than Zales was offering for the same size stone at a much lower quality. Game, set, match!
Should you decide to purchase a diamond in the district and you live out of state (or have the address of someone out of state you trust) arrange for the diamond to be shipped to that address. In doing so the sale is registered as a sale out of state and thus you will not need to pay sales tax on your new diamond. If you don’t think sales tax is that significant, think of it this way: if you spend $3,000 on a ring, paying 6% sales tax will amount to an additional $180. Take my advice, save the money on tax and buy your fiancÃ?Â©e-to-be or special someone a few dozen red roses instead.
Shopping in the Diamond District will never be a stress free activity. It will always involve plenty of work, lots of haggling, and a small amount of luck. Hopefully though, the tips above will remove some of the mystery and anxiety surrounding the process and result in the benefits far outweighing the costs. Happy hunting!