The Truth about Blue Nile and Internet Diamond Companies.

There is no doubt within the jewelry industry that online sellers such as Blue Nile have revolutionized the ways that many consumers purchase their engagement diamond.  Blue Nile, as well as a multitude of other online sellers, offers a virtual database of diamonds to internet shoppers at prices that were once considered to be below traditional retail prices. I add the phrase “once considered” in the previous statement in an acknowledgement to the shifts in pricing structure that have transpired through the retail jewelry landscape as a result of Blue Nile and other internet sellers.

The problem with Blue Nile and other internet diamond sellers is the process itself.

Internet diamond companies, unlike traditional retail jewelers, have no eyes-on knowledge of any diamond that they sell.  These companies are simply online brokers between diamond wholesalers and consumers.  No one in the “process” between Blue Nile and the ultimate diamond consumer has any real knowledge of what the diamond looks like.

There are two inherent deficiencies in buying a diamond in this manner.

Firstly, the process itself is based on the diamond grading report – usually a GIA report.  It is wrong to assume that a GIA diamond grading report conveys the most important aspect of what a diamond is all about – what the diamond really looks like.  In reality, this is a very significant misperception amongst diamond buying consumers.

To illustrate my point, here are two actual un-retouched photos of two different diamonds:

The diamond below is typical of what the internet shopper buys based on the GIA report. This diamond is a 1.70 carat Cushion Cut.

The GIA report looks great as this diamond meets the proper depth and table proportions. Additionally, it is graded by GIA as “Excellent” Polish and “Excellent” Symmetry.

Despite these “paper” qualities, the diamond is severely lacking the “fire” and “brilliance”and”scintillation” that makes a diamond beautiful. This diamond is actually dead and dark in the center.

The diamond pictured on the right is a 1.72 carat Cushion Cut diamond in which the depth and table proportions are also within the “proper” range. This diamond has a Symmetry grade of “Good” and a Polish grade of “Excellent”.

Though it is somewhat difficult to tell in the two photos, I can assure you that this diamond is much more beautiful than the other.  The “faceting” of this diamond creates much more “life” and “brilliance” and “scintillation”.  This diamond appears much whiter and brighter than the other diamond despite the fact that is graded as “I” color and the diamond above is graded as “G” color.

in this example, I guarantee you that the lower graded diamond is much nicer and more beautiful than the better graded diamond.  I know this for a fact.  I have seen both of these diamonds with my eyes.  It is why I am writing this article.

A GIA certificate does not describe the beauty of a diamond on even what a diamond looks like to the human eye.  The GIA certificate is essentially a document of scientific characteristics and terminology that measure minute differences in gradations that, in most cases, are beyond the limitations of what a consumer using his/her human eyes can ascertain without proper conditions and equipment.

While it is true that a “D / Flawless” diamond will undoubtedly be more beautiful than a “M / I2” diamond, It is often the case that a diamond of a lesser grade in terms of it’s GIA grading may be as beautiful or perhaps more beautiful than a diamond that has a “better” GIA grade.  This is particularly true in the case of fancy shape diamonds where the color and clarity grades have little significance to the overall appearance of the diamond.

The second deficiency of the online buying process is that the internet consumer is often searching for the lowest price as opposed to understanding that a diamond is supposed to be about the beauty and scintillation of something that is extraordinary and exceptional.

Whether searching Blue Nile or another online diamond site, without the ability to see and understand the subtle differentiations that make one diamond more magnificent than another diamond, it is easy to fall into the trap of searching only for low price with no understanding that “Value” is something different from low price.

Buying a diamond simply based on lowest price is similar to buying a $5.99 bottle of Cabernet Sauvignon!  This is not to say that one must pay $50.00 or $150.00 for a bottle of wine.  I do know, from experience, that there are very good bottles of wine that can be purchased for $15.00 to $25.00.  I also know that the $5.99 are, for the most part, going to taste bad and will not be enjoyed nearly as much!

In my  wholesale business I often ask this question to retail jewelry store operators: “What sells better in your store?  .  . The low price diamond?  .  . Or the nice diamond?”   The answer is almost universally  “The nicer diamond!”.  I agree with this answer.

I know from experience that a diamond consumer –  when given the opportunity to learn about diamonds and see diamonds with his/her eyes –  will almost never purchase the lowest price diamond and will, in many cases, choose the most expensive diamond!

Getting back to the subject title of this post, I do not have a problem with Blue Nile or other internet diamond sites.  Honestly, I was a supplier to the company that grew to be Blue Nile. I have also supplied James Allen and other internet diamond companies.

On the subject of internet diamond companies, I have a story that my mind will never let me forget.  I was in the process of “getting into” an internet diamond company when the person on the operating end of the internet business asked me the following question:  “How good are you at playing the game?”  I knew what he meant but I asked him to clarify.  He made it clear to me that the internet shopper only looks at the first page or two of diamond data.  These are the diamonds that are the lowest price diamonds.

He and I both understood that the “game” was all about giving these buyers diamonds with “issues” that make them inexpensive. With a wink and a nod, the conversation was an affirmation that the internet shopper does not understand any more than that of low price  and that the idea was to give such a shopper what they are looking for.

Whether it is Blue Nile or any other internet site, a consumer must understand that Blue Nile is simply providing a list of diamonds and diamond data that the consumer will never fully understand. The consumer must understand that Blue Nile is simply an intermediary web operation company that, in most cases, doesn’t know or care what any particular diamond looks like. They simply showcase a database of diamonds, collect your money and then arrange for the diamond to be shipped to you. Their interest is in making an additional internet sale and not in making sure that the consumer/buyer is acquiring a beautiful diamond.

It is possible to buy a beautiful diamond from Blue Nile or any other web diamond seller.  Most importantly, the consumer should question why similarly graded diamonds on Blue Nile are priced 20% or 30% or more than 50% higher others of the same GIA grade.  After all, it is the same seller who is selling the diamonds!  The consumer must understand that low price usually means a diamond that is not as beautiful as another diamond – and, in some cases, a diamond that is not beautiful at all.

Perhaps you are happy drinking that $5.99 bottle of wine!  Or perhaps you understand that low prices are just that and there are reasons why the price is low.

I offer these two bits of advice.  Go to a jewelry store and see what I am talking about. Buy with your eyes and not with your mouse.  And if you insist on buying with your mouse, understand that low price usually means a trade-off in terms of beauty.  Understand that “value” is a matter of quality and beauty in relation to price.

The purchase of a diamond is one of the most significant purchases of a lifetime – and one that you will enjoy for many years and  hopefully a lifetime!  Make it the right diamond.

 

 

 

NEIL REIFF

3 thoughts on “The Truth about Blue Nile and Internet Diamond Companies.

  1. Neil Beaty

    Not to be overly defensive of Internet jewelers but MOST of them are not as you describe. They’re no more or less than a jewelry store that’s in someone else’s neighborhood who is trying to sell to customers outside of a convenient driving distance. Nearly every store has a website ( every store should) and some have pretty nice ones.

    Reply
    1. NDR Post author

      Agreed. However, as stated in my post, it is not the internet companies that I have a problem with. It is the consumer’s buying behavior that is harmful to the buyer.

      Reply

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