How Dropping Lab-Grown Prices Are Affecting Diamond Sales, According to the INSTORE Brain Squad

question:

What effect are the dropping prices of lab-grown diamonds having on your diamond sales?

• We finally established an in-house protocol for lab diamonds trade-in policies so both the store and the customers are treated fairly. For trade-ins, I will give you the going market rate on lab-grown diamonds. With this policy in place, I feel good about selling and educating my customers on lab diamonds. Many millennials come in with a juicy diamond budget, but lab buyers are looking for SIZE with smaller spending margins. Quality is not an issue, most shapes are available. We do custom anything, so realistically the only sticky wicket is being up front about trade-in value. I like presenting my clientele with a smorgasbord of options to fit their particular idea of the perfect ring! — Denise Oros, Linnea Jewelers, La Grange, IL
• Sales of lab-grown continue to outpace natural diamonds. We now sell more labs in count and total dollar amount (sales AND profit) than naturals. — Jim Tuttle, Green Lake Jewelry Works, Seattle, WA
• They are making me glad I never sold lab-created diamonds. I don’t have to explain why lab-grown diamonds are like used cars … — James Doggett, Doggett Jewelry, Kingston, NH
• Total sales dollars are less because of it, but it seems like the demand is up — so it evens out. — Cathy Miller, Caleesi Designs Jewelers, Austin, TX
• None at all. It actually gave us an opportunity to make more profit. As the prices dropped, we were able to hold the line onto our pricing and then make more profit doing so. — Alex Weil, Martin’s Jewelry, Torrance, CA
• We’re selling more with added disclosures about lab-grown being for beauty and savings, with no guarantee of future appraisal/replacement value. We also stopped trade-up offers. In one case, we had a lab-grown center on memo, we returned it to the vendor, we called it back within four weeks for another viewing and the price was half. That is hard to explain. — Jill Keith, Enchanted Jewelry, Danielson, CT
• It is very frustrating since customers are finding prices online that are hundreds of dollars less. That is why we do not buy them and only memo them. — Karen Hollis, K. Hollis Jewelers, Batavia, IL
• Jewelers are the only ones worried about it. — Ragnar Bertelsen, Ragnar Jewellers, Vancouver, BC
• Customers are becoming more informed that lab diamonds have no real value. We are seeing more clients buying natural. — Elizabeth Saba, Presley Co. Fine Jewelers, San Diego, CA
• We’ve noticed a marked uptick in requests for nontraditional engagement rings featuring sapphires, dirty diamonds, or heirloom old-cut diamonds; we think this is an inevitable result of lab diamonds. — Gretchen Schaffner, Eytan’s Designs, Sherman Oaks, CA
• Younger people love the look and price of the lab-grown diamonds. Older generation want the tried-and-true “grew in the ground.” — Mary Jo Chanski, Hannoush Jewelers, Rutland, VT
• To me, lab-grown diamonds and mined diamonds are two separate product categories and attract different types of customers. Therefore, the price does not become an issue. — Patty Gallun Hansen, Dorothy Gallun Jewelry, Cedarburg, WI
• Lab-grown diamonds have killed the sale of our lower color and blurry natural diamonds. Mined diamonds are very slow right now, overall engagement rings are slow. — Nicholas Pronko, Steve Pronko Diamonds, Dickson City, PA
• They are dropping enough I don’t feel comfortable with the value for more than a week. Mined has a much steadier value. — Valerie Goodwin, Vaughan’s Jewelry, Edenton, NC
• It just leaves people confused. the diamond, once the main focus of the jewelry industry, is taking a back seat. — Steven Wardle, Forest Beach Design, Chatham, MA
• The number of diamond sales has risen, but the average ticket price has gone down. Lab-grown sales are up and mined diamond sales are down. The price divide is growing, and it’s hard to find a mid-priced option. — Dianna Rae High, Dianna Rae Jewelry, Lafayette, LA
• Steady on. Customers don’t know that gold used to be $250 an ounce, not $2,000, just like they don’t know what diamonds cost before they needed one. We sell both, but labs are super easy with my older ladies. — Jo Goralski, The Jewelry Mechanic, Oconomowoc, WI
• We are seeing an increased demand for natural diamonds. There have been fewer customers asking for lab diamonds, The growers and distributors have ruined the lab market by overproducing; there was room for everyone to make money. Tom Schowalter, Miner’s Den Jewelers, Royal Oak, MI
• Rapidly decreasing prices are making some clients more intrigued with lab-grown diamonds, while an equal number are shying away as they are not viewed as an asset. End result is equal to date. I expect lab-grown sales to soften. Steven B. Goldfarb, Alvin Goldfarb Jeweler, Bellevue, WA
• We’ve started carrying some since the price drop. I was skeptical until the price has seemingly stabilized. Gene Arthur, Arthur’s Jewelry, Reidsville, NC
• It is lowering our average sale and gross dollars in the door, but profit percentage is up. It has created new buyers in the category that weren’t before. Joel Wiland, J. David’s Jewelry, Broken Arrow, OK
• It hasn’t had an effect yet, but it’s pretty clear the manufacturers put out too much supply and killed the market. There is almost no value left in lab diamonds. At this rate, they’re going to be virtually worthless. Sydney Nusinov, Charles Nusinov & Sons, Parkville, MD
• Sales volume and demand are still strong, but margin and bottom-line dollar profit have deteriorated. It won’t be long before we stop offering lab-created diamonds because there is no way to make profit. Jeremy Auslander, Roxbury Jewelry, Los Angeles, CA
• Interesting. The dramatic drop in lab diamond prices has created an entry point for some who didn’t feel they could afford a nice-size diamond. And at the same time, we’ve seen customers who were considering a lab diamond decide on a mined diamond because of its price stability. Bill Elliott, Ross Elliott Jewelers, Terre Haute, IN
• Prices of lab-grown diamonds have only been dropping. The real question is how are sales of lab-grown diamonds affecting cash? The jeweler that is enamored with lab-grown because the margin is higher may be missing the critical piece: cash in hand. Bob Goodman, Robert Goodman Jewelers, Zionsville, IN
• Lab is easy … almost lazy. We still make a beautiful margin, so it’s difficult to have the desire to push natural. There was a time when I never sold lab-created stones (color), never stocked sterling, never even entertained alternative metals. All of those have a place in my store today. So does lab. It’s viable for the customer and for us. I mean, in small-town middle America in selling 5-carat lab diamonds. In my 25-plus years, I’ve only done that a handful of times for natural. It’s fun to see the client’s eyes twinkle! And again, I get to make money, and that makes my eyes twinkle. Erika Godfrey, Hawthorne Jewelry, Kearney, NE