Very often, potential clients call me to see a manifest they have received. They are always excited because the price per carat of the diamonds on the manifest seems to be an incredible value. They know it’s a great value because they’ve compared Adtec’s wholesale rough diamond price list to the diamonds on the manifest, and it appears the diamonds are substantially discounted. Let the Magic Show begin!
How is it that people who are highly educated, business savvy, cunning, and control large sums of money seem clueless? Investment groups, hedge funds, and speculators will spend a great deal of time, money, and effort on due diligence for other investments. However, in diamonds, they will accept information from unknown suppliers and assume the information is accurate. I don’t get it I really don’t get it.
For some companies who have no intention of ever giving up on their diamond investment, or who don’t care if they are buying well, then an inaccurate manifest is of little or no concern. Perhaps they are putting the diamond asset on the market and making so much money off the asset that the accuracy of the manifest is irrelevant. Or, as sometimes happens, the people who represent the buyer don’t care what happens after the sale is made. They have made their commissions and they don’t care what happens to the buyer when he tries to get out of his investment. For all these people, an accurate manifesto is of no importance. Of course, for diamond cut manufacturers, manifests are irrelevant. They don’t care what you say you have. They only trust themselves to determine quality and value.
That said, if you are representing the buyer with integrity, or if you are the actual buyer and would like to “exchange the products”, or after holding them for a period of time, resell them, then an accurate manifest is absolutely essential. . And here is a surprise for you. The seller will do the work for him. He will create a manifest to maximize his profit and he will do it with magic, illusion and deception.
Magic is its creation of value, where no value exists. The illusion of him is what he appears to be but is not. His deception is that he has evoked a manifesto that is unreal. Do I hear screams and screams from those who prepare manifestos? Do I cut you short? I wish I was wrong.
Are all salesmen crooks, thieves and charlatans? Actually, no, they are not. The truth is that all sellers know that no matter what quality they say a diamond is, the buyer will not agree to any possible advantage available. They have no choice but to “modify” the rating. A gemologist who works for the supplier will look at the stones and when something has a particular color, clarity and shape, he will call it that. To do otherwise would alert the buyer’s gemologist that the seller is full of nonsense and is counterproductive to maximizing the sale price.
Let me explain how a manifest arises as magic, illusion, and deception. Suppose we have a manifest of 10,000 cts. of rough white diamonds. The manifest will usually say the following: 4 ct. at 15 ct, DH color, VVS-VS clarity, sawnable and fabricable. The manifest will usually divide the weights into various carat sizes and give a price per carat for each size or give a price per carat for total goods.
Most of you will look at what I just wrote and ask, what’s wrong with this? It describes the package and I have all the information I need to determine if the price seems reasonable. Really? If a package has only one D-color stone in the listed size, the vendor can say that the package starts with color D. It doesn’t matter if the rest of the package is all HJ, you can still legitimately present your package as color D and below. . If the pack is supposed to have H color stones, it will return all “I” colors as H and all fluorescent J color stones also as H. If you understand how fluorescence affects the color of diamonds, you will know why a color J fluorescent. it can be put as an H. If you don’t know why, you can read my article on Google or on my website about the effects of fluorescence on diamond color.
Like color, clarity grading can also create an illusion. If a package has a VVS stone of a certain size, the supplier will write that the package is VVS-VS. It doesn’t matter that there is only one VVS. In addition, better quality SI1 stones will also be added as VS quality. The gemologist can do this because he will state that the inclusions that make up SI1 stones will be cut out during polishing. This is usually true, even with I1 or piqué quality stones. However, the gemologist will add them regardless of whether or not the inclusion will be polished.
With regards to shape, the vast majority of buyers who are not going to polish the diamonds they buy will accept only Sawable 1, Sawable 2, Makable 1 and Makable 2. The supplier’s gemologist really can’t do much, if any. something with the first three forms, they are what they are. However, I can’t tell you how many times I’ve seen macles and flats masquerading as Makable 2. The difference in performance and therefore value is very substantial.
Providers believe they have few options. They must take the necessary steps to protect their earnings. They are forced to take each stone remotely close to having a better color, clarity, and sometimes shape and improve the quality and shape of the stone in the manifest.
Some people think that they will just use an average grade or quality as a basis for pricing products and that will protect them. Unfortunately, this is a recipe for financial loss. As an example, let’s look at the difference in value of a selection of diamonds that are grouped as an average size of 6.5 ct. (size 6-7ct) color GJ, VVS-VS2. Craftable 1, if a K-VS2 is $840 per box, a J-VS2 is $910 per box, I-VS2 is $1100 per box, an H-VS2 is $1300 per box, and a G-VS2 is $1550 per unit. If stones are VVS, add 16% for color K and an additional 17% for color J, an additional 23% for color I, an additional 25% for color H and an additional 23% for color G .(Percentage increases are based on additional costs per carat for 2.00 carat polished diamonds per the Rappaport report. Fabricable 1 diamonds of 6.50 carats will typically produce 2.00 polished carats, depending on inclusion location, depth and diameter of the stone. For our purposes of illustration, we assume the diamond is cut 2.00 ct or larger).
As you can see, the difference in value of a color or lightness is substantial. If the seller’s gemologist improves both a color and a clarity for a stone, the difference is again magnified. When the seller upgrades even 10% of the colors or clarities, they have a very, very significant overpricing for the package. Imagine 1000 carats overvalued by 10-20%!
If you still haven’t figured out how I feel about manifests, let me be clear. They are almost useless and mostly worthless. When you are offered goods, assume this from the beginning. When you meet your supplier, you already have a good idea of what percentage you need to factor into your purchasing equation. When you don’t know the supplier, no one knows how to factor into the buying equation.
I’m not saying you shouldn’t look at the offered manifest. From the manifest I can tell how much work was put into grading and from the details in the manifest I can get an idea of the sophistication and knowledge of the seller’s gemologist. This can be helpful. However, I completely ignore your rating and evaluation.
Perhaps this article was not written for you. But for those of us who are burdened with responsibility and guilty, obligated and accountable to our clients or our wives, take my advice and ignore manifests and gemological reports unless your gemologist has created the manifest. If you want to see real magic, spend time with your children.