Magic, Illusion, Deception: Aka: Rough Diamond Manifests
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 in the manifest seems to be incredible value. They know it’s a great value because they have compared Adtec’s wholesale rough diamond price list to the diamonds on the manifest, and the diamonds appear to be substantially discounted. Let the magic show begin!
How can people with a high level of education, business savvy, shrewd and in control of large sums of money seem to have no idea? 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 vendors and assume the information is accurate. I do not get it. I really don’t get it.
For some companies that do not intend to ever get out of their diamond investment, or do not care if they are buying well, an inaccurate manifest is of little or no concern. Perhaps they are putting the diamond asset in trade and making so much money on the asset that overt accuracy is irrelevant. Or, as is sometimes the case, the people representing 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 exact manifesto does not matter. Of course, for diamond cutters, 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 represent the buyer with integrity, or if you are the actual buyer and want to “ flip the merchandise ”, or after holding it for a period of time, reselling it, then an accurate manifest is absolutely essential. . And here you have a surprise. The seller will do his job. You will create a manifesto to maximize your profits and you will do it with magic, illusion and deception.
Magic is your creation of value, where there is no value. Your illusion is what it appears to be but is not. His deception is that he has conjured a manifesto that is unreal. Do I hear screams and screams from those who prepare the manifestos? Did I cut you so fast? I wish I was wrong.
Are all salespeople thieves, thieves, and charlatans? Actually, no, they are not. The truth is, all sellers know that no matter what quality they say a diamond is, the buyer will not agree in order to get any possible advantage available. They have no choice but to “manipulate” the rating. A gemologist working for the supplier will look at the stones and when something is obviously of 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 bulls and is counterproductive in maximizing the sale price.
Let me explain how a manifesto arises as magic, illusion, and deception. Suppose we have a manifest for 10,000 cts. of rough white diamonds. The manifest is usually read as follows: 4 ct. up to 15 ct., DH color, VVS-VS clarity, can be sawed and made. The manifest will generally divide the weights into various carat sizes and give a price per carat for each size or give a price per carat for all products.
Most of you will look at what I just wrote and wonder, what’s wrong with this? Describe the package and I have all the information I need to determine if the price seems reasonable. Really? If a package has only one stone of color D in the indicated size, the supplier can say that the package starts from color D. It does not matter if the rest of the package is all HJ, you can still legitimately present your package as color D and below . If the package is supposed to have H color stones, it will throw all “I” colors as H and all J fluorescent stones also as H. If you understand how fluorescence affects the color of diamonds, you will know why a color Fluorescent J can be put as an H. If you don’t know why, you can read my article on Google or on my website on the effects of fluorescence on diamond color.
Like color, gradation of clarity can also create an illusion. If a package has a VVS stone in a set size, the vendor 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 included as VS quality. The gemologist can do this, because they will claim that the inclusions that form the SI1 stones will be cut during polishing. This is usually true, even with I1 or piqué quality stones. However, the gemologist will include them regardless of whether the inclusion will be polished or not.
As for the shape, the vast majority of buyers who are not going to polish the diamonds they buy will only accept Sawable 1, Sawable 2, Makable 1 and Makable 2. The supplier gemologist can’t really do much, if anything, with the first three ways, they are what they are. However, I can’t tell you how many times I’ve seen stains and stained floors like Makable 2. The difference in performance, and therefore value, is very substantial.
Providers believe they have few options. They must take all necessary steps to protect their earnings. They are forced to take each stone remotely close to having better color, clarity, and sometimes shaping and enhancing the quality and shape of the stone in the manifest.
Some people think that they will only use a medium grade or quality as a basis for the price of the products and that will protect them. Unfortunately, this is a recipe for financial losses. As an example, let’s look at the difference in value for a selection of diamonds that are grouped into an average size of 6.5 carats. (Size 6-7ct.) Color GJ, VVS-VS2. Makable 1, if a K-VS2 costs $ 840 per / ct., A J-VS2 will be $ 910 per / ct., I-VS2 will be $ 1100 per / ct., An H-VS2 will be $ 1300 per / ct., And a G-VS2 will be $ 1550 per ct. If the 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 based on additional costs per carat for 2.00 ct. Polished diamonds per Rappaport report. Makable 1 diamonds of 6.50 ct. Will generally produce 2.00 ct. Polished, depending on the location of inclusion, depth and diameter of the stone. In the illustration, we assume that the diamond is cut 2.00 carats or more).
As you can see, the difference in value of a color or clarity is substantial. If the seller’s gemologist updates both a color and clarity for a stone, the difference is magnified again. When the seller updates even 10% of the colors and / or clarities, you have a very, very substantial overvaluation for the package. Imagine 1000 carats overpriced by 10-20%!
If you haven’t figured out how I feel about manifestos yet, let me be clear. They are almost useless and mostly useless. When goods are offered to you, assume this up front. When you meet your supplier, you already have a good idea of what percentage to factor in your purchasing equation. When you don’t know the supplier, nobody knows how to factor the purchasing 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 of 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.
Maybe this article was not written for you. But for those of us who are burdened with responsibility and are guilty, responsible and accountable to our clients or our wives, then please take my advice and ignore gemological manifests and reports unless your gemologist created the manifest. If you want to see real magic, spend time with your kids.