Understanding the Colored Gemstone Business
Colored Gemstones
Most retail jewelers sell both diamonds and colored gemstones. It looks more or less like the same business - small valuable minerals mounted in expensive metal. But if you understand the supply side of the business, you see that these businesses are very different indeed. 
The diamond business is essentially controlled by the De Beers cartel, which manages everything from supply and pricing to public perception of diamonds. Though the public is led to believe the diamonds are rare and precious, in fact diamonds are plentiful and are as commoditized as are oil, gold and silver. Diamonds of similar grade are sold at the same prices nearly everywhere in the world and prices are kept high by controlling the supply. From the consumer point of view, that makes it difficult to find a good bargain on a diamond. From the retailer's point of view, it makes it difficult to achieve differentiation in the market and find a profitable business model.
Even in our home of Chanthaburi, Thailand, one of the world centers for trading and processing colored gems, most gems are cut by small businesses who tend to specialize in certain types of gems. The supply of gems here is constantly in a state of flux, according to the output from the mines around the world. For example, we may see a lot of high grade spessartite garnet in large sizes for a few months, and then not see it again for many months. Also, prices constantly change depending on supply and demand.
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- First Published: December-04-2007
- Last Updated: October-24-2017
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