December 2014, New York Post: Synthetic diamonds have the same composition, color and clarity as traditional ones and they cost up to 50 percent less.
June 2015, Daily Telegraph: Lab-grown diamonds can cost up to 50 percent less.
June 2016, CNBC: Synthetic diamonds can cost 30 percent less than mined diamonds.
November 2016, WSJ: Synthetic diamonds are 25 percent cheaper than natural diamonds.
January 2017, FOX43: Millennials are particularly fond of lab-diamonds because of the 20 to 30 percent price break.
February 2017, WEAR: Lab created diamonds traditionally cost 20 to 25 percent less.
What can you say, looking at these quotes (except that the Internet preserves everything and the author of this article is notable for being a tremendous bore)? Manufacturers of synthetic diamonds keep saying that their products are much cheaper than natural diamonds. A low price is considered the most obvious advantage of synthetics, and it is much more understandable for the consumer than some connection with conflicts or ecological production.
However, look at how rapidly the numbers are changing in the above mass media statements. Back in 2015, we were told that synthetics cost half as much as natural stones, while in winter 2017 it is cheaper by only 20%. This means that prices for synthetic diamonds have risen by 250% in a matter of only two years, while prices for natural diamonds fell by about 15% during the same period.
But 20% is still a significant advantage in price, isn't it? No, it is not. Don’t be surprised: advertising is more often than not apt to omit something very important. And if the cost of producing synthetics is noticeably lower than the cost of mining natural diamonds, this does not mean that you will feel this difference in the jewelry store.
Let us imagine an engagement affair with the most modest budget. For her, we would have come up with a standard solitaire ring of 14-carat white gold graced with one 0.5-carat diamond having reasonably good characteristics in terms of clarity and color – VS2/G.
If we try to pick up such a ring on the Internet, we'll see this:
Strange, isn’t it?
But, maybe we just chose a wrong size and wrong grades for diamonds to be compared? And we also should admit that a half-a-carat diamond for such a serious event as engagement may be too small. According to Edahn Golan, the most popular choice for American consumers are diamonds weighing 1-1.04 carats (they account for about 10% of sales) in the color/clarity range of H-I/SI1-SI2.
Well, let's try to find a solitaire ring in white gold with a one-carat diamond of I color and SI1 clarity.
This looks more like what we are told about the cheapness of synthetic stones. However, the figures still do not converge: the average price of synthetic diamonds is lower than that of natural diamonds by 12%, not by 20%. And the prices per se, as you can see, vary considerably depending on the store. For $ 4000, you can buy an artificial diamond at Brilliant Earth or a very much similar, but natural diamond at Blue Nile.
It is worth noting that during this research I faced one difficulty: by far not all stores provide an opportunity to choose a diamond with specific characteristics of color and clarity. Often you have to choose from the already available assortment of finished goods, which may not be what you are looking for.
This prompted me to another and the most interesting experiment. It is believed that the American consumer is inclined to choose stones of larger sizes, but of lower quality. What if we try to find the cheapest one-carater in the assortments offered by jewelry retailers? Not for a betrothal, but for myself! Let it have low characteristics, if only it were a large sparkler to the envy of all my friends!
Twenty-five percent. It is exactly by that amount you will pay less for a ‘mass-consumption’ natural diamond ring compared with minimum prices offered by vendors of synthetics. Natural stones are cheaper than synthetic stones, and not vice versa.
Moreover, prices for natural diamonds offered by some retailers could be even lower, if they sold diamonds of lower quality grades. But, for example, Blue Nile and Brilliant Earth terminate their assortments at SI1-SI2 and do not sell stones of the I clarity grade. On average, all the above diamonds have their color in the range of I-K and clarity in the range of I1-I3.
Pricing for synthetic diamond rings turned out to be quite a curious thing (which still needs to be studied in more detail). In some cases, prices for artificial diamonds were comparable with prices for natural diamonds. In other cases, some stones were cheaper, but their setting cost was prohibitively expensive. For comparison, the simplest and cheapest solitaire mounting in 14-carat gold from Blue Nile costs $ 210, while Diamond Foundry sells it at $ 500 (and this is not the limit!).
No doubt, the prime cost of synthetic stones is lower than that of natural stones. In order to grow a synthetic stone, you do not need to dig a deep mine, build a dressing mill, pay a salary to thousands of workers and build schools for their families. The consumer may listen to this and rejoice: buying an artificial stone, he will not only save, but also avoid financing pollution by unscrupulous diamond-mining cartels. But it turns out that all this is nothing more than advertising slogans. In reality, the consumer will not see any difference in price. Taking advantage of trustworthy consumers, who still believe in the attractiveness of diamonds, synthetics vendors will charge them to the full extent, putting the difference in their pockets. This is, apparently, what is now called the new standards of ethical jewelry and responsible supply chain.
PS: While researching jewelry retail, I made several other important observations.
Observation # 1: Play it safe with your wallet. In one and the same store you can find two diamonds of the same size and characteristics, but one of them will be much more expensive than the other. For a one-carater of the I color and I2 clarity you may be asked to pay $ 2000 and $ 8000. Such a malady affects absolutely all stores that sell diamonds of various price categories, both natural and synthetic. Probably (and even most likely!), a helpful sales assistant will be able to explain to you this difference in price and even provide some rationale as to why it is worth buying the stone with the larger price tag. But for now, it just looks like a test for attentiveness, where win those who are attentive while reading all the descriptions.
Observation # 2: Not to tempt customers to be meticulous, some stores (especially in the mass market segment) do not bother at all to specify exact characteristics of diamonds they sell. They indicate the whole price of a diamond ring pointing out in its description that its “color and clarity range is within H-J/S1-S2.” For them it’s a trifle that the difference between H/S1 and J/S2 on the Rapaport price list may reach $ 1500 per carat! And it is doubtful that this is a display of great generosity, in which expensive diamonds are sold cheaper. It is much more likely that lower quality stones bear higher price tags.
It is precisely due to such "maneuvers" of jewelry retail, that synthetics vendors have an opportunity to declare that their goods are significantly cheaper than natural stones. To come up with a beautiful advertising slogan, it is not necessary to compare really comparable things. It is quite sufficient to compare the cheapest synthetic one-carater and the most expensive natural diamond of the same weight from the above described assortment.
Elena Levina for Rough&Polished