Diamond Buyer

There are a lot of specialized skills involved in the manufacture of Jewelry. In a large company delivering worldwide, there is always a stock on hand of various gem materials like diamonds, emeralds rubies, and blue sapphires. Because the clients of manufacturers generally allow around six weeks for the making and delivery of an order, the manufacturer needs to anticipate the demand for the materials they will be using for production, in advance. 

What does the diamond buyer in a jewelry manufacturing company do? The diamond buyers mandate is to keep a specified quantity of materials of a specific quality and size, on hand at all times, to supply the demand from the factory in time to keep production flowing. Graded and calibrated diamonds are easy to source in commercial sizes between .07 ct. and .15 cts. They are produced in many countries, usually using semi-mechanical methods. Smaller goods, however, are usually cut by hand. This requires a large, skilled but relatively low paid workforce and results in a product that is not uniform. The sorting of these goods requires skill, time and patience and so will carry a high price premium if the grading and calibration is already done. 

A large manufacturer will use many small diamonds as they are set in many designs, for example to highlight a centered colored stone, or to add a sparkle to a gold band. This is an area where a lot of money can be saved if grading can be done correctly, in house. Further, the strict control of quality enhances the reputation of the manufacturer. Holding a stock of diamonds is expensive so the type of stock (qualities) a manufacturer holds will be limited to the choices that are offered to their target client market. The quality promised to the buyer is an important standard which must be stringently maintained. 

Smaller diamonds or “pointers” are generally processed and faceted in India. They are offered for sale in parcels of around 30 cts to 150 cts. Further, they are usually offered in lots in two sets of sizes, roughly .03ct to .05ct sizes (many times including a small number of sizes to .07 cts.), and anything under .03ct sizes. If you are looking at 100 cts of .01 ct size, you are looking at 10,000 stones in a parcel. Aside from the sheer number of stones in a parcel, a diamond buyer is faced with further problems that must be solved. 

Opening a parcel for the first time is a revelation. A buyer will get a sense of the general color and clarity of the material inside, then with experience, he will be able to detect whether the goods are well “made” (cut). That many stones are never all going to look the same individually. Commonly, parcels can have color taints of yellow and brown, and further the materials can be clouded by the inevitable inclusions in some stones, finally the parcel may simply look ugly because there are many stones that are not well cut. 

It is rare that a good buyer will be buying the entire parcel – a selection needs to be made. There are rejections that are returned to the seller because they do not meet a certain standard. *As a side note, buyers are often offered parcels which already have had things selected out by someone else. 

When using the lost wax casting method to produce a piece of jewelry, each one requires a specific number of stones of sizes that are fixed to within a small tolerance. Therefore, stock is kept in separated sizes, as well as qualities, so that the people in the “stone room” can put together the required materials for an order easily. The stone room needs easy access to materials in the sizes and qualities that are required by an order. If the manufacturer has a sample line of jewelry of thousands of different designs and has many customers, that means there are many combinations that are being selected constantly in time to feed a busy factory floor. 

When stocks become low the buyer will put out some calls and parcels will be offered by a supplier, usually a wholesaler. It does not take long before the suppliers understand what range of goods a particular manufacturer uses. One would think that the supplier would just offer the correct goods at the correct price, and it would be easy. The suppliers however are constrained by the fact that the parcels are delivered to them from their sources on consignment – the choice of goods in a parcel is determined at the source, which is usually in India where the goods are cut. That means the wholesaler is limited to what a particular parcel already contains and, it is my experience, no matter how well your supplier understands the goods you select and what you pay, you will never see, a parcel which needs no work. That is unless of course someone else is paid to do the sorting. 

In general, prices are only slightly negotiated. If you look at enough of these parcels you will get a feel for what the market is like. In general, a buyer will look at many parcels before considering the ones that he will actually work on. First look is color. If the parcel had a yellowish or a brownish tinge, I would look no further and close it up. The second look was clarity. With some experience you can discern if the parcel contains material with a clarity level that meets your standard. Thirdly, you can discern whether the cutting is generally up to your standard. Thick girdles, deep pavilions thin crowns and broken stones are always found in these parcels and make up the rejections. Of course, you are not going to waste time on a parcel which contains a lot of rejections. 

On a promising parcel, with the right price, I would take a small selection of the material, maybe I ct. or so, and sort it according to what I need. I would take a random selection with a scoop and would sort it into 3 qualities, carefully louping each stone. A fourth quality would be the rejections. After weighing the selections, I would convert it into percentages. Since I knew how much I was prepared to pay for each of these qualities I could apply the percentages to the entire parcel to determine whether the asking price of the parcel was within my bounds and whether it matched what I was looking for in terms of quality mix. There were many parcels that were not worth the effort because they don’t meet the color, clarity or size criteria, or they did not yield a decent price outcome. If everything was OK at this point, I would take the parcel in on consignment. The dealer would give me a number of days to “work” the parcel.  

The next step would be to sieve the parcel to determine the size mix.  Over the next days, each one of those little stones in the parcel had to be graded. They had to be separated into size and examined for quality. Color, clarity and cut. This is real slog work – imagine examining hundreds of stones that are in millimeter sizes. My crew and I got to work for many hours of patient, silent concentrated grading. Every now and again there was a ping as a badly cut stone would escape the tension in the tweezers would fly off to somewhere unknown. Everyone would stop and, after some chuckles and some ribbing, would help hunt the escaped stone down. 

Finally, the finished work was assembled and placed in marked plastic baggies separated by size and quality. Then it was carefully weighed to match the initial incoming consignment. The results of the selection would tell me if my initial assessment was correct. 

At that point I knew exactly what I could use and what I could not from the whole parcel. There is scope for some surprises. Funny things could happen like for example I have come across parcels with a size right in the middle missing, the one I need most. This is explained by the fact that the dealer had shown the parcel to someone who paid a high price for only the one size. 

The bargaining was usually within a narrow parameter due to the time I took to select which parcel to “work” on at the outset. Sometimes I would win a better price if I could see the seller was anxious and it was always helpful if I was willing to settle the deal with cash. 

The main issue was buying only what I needed and returning what I did not want from the parcel. Most of the time I would have to pay the original asking price - that was OK since I had calculated that it would work well before I put in the real “work”. Imagine grading 10,000 tiny stones only to finally buy 1,000 - that would be a huge waste of time and resources.