Showing posts from October, 2014

Why are larger diamonds so much more expensive?

A customer who recently requested a quote for an upgraded diamond on one of our engagement rings had a good question.  He wanted the 1/4 carat diamond in the standard ring to be replaced by a 1/3 or 1/2 carat stone of the same quality.  My quote to him for both sizes showed the 1/2 carat diamond costing much more than he expected, given my quote for the 1/3 carat one.  He asked why the larger diamond was so much more.

You would think that the 0.5 carat diamond would be about 1.5 times more expensive than the 0.33 carat one, right?  After all, 0.5 is about 1.5 times 0.33.  But, in actuality, the 1/2 carat diamond costs us over 2.5 times what the 1/3 carat costs us from our diamond supplier!  So, even though we don't mark up the larger diamond as much, we still have to sell it for a lot more than the smaller one.

The other problem is that upgrading from a 1/4 carat to a 1/3 carat is a small jump, and our supplier's cost/carat is about the same for those two sizes.  So, the add…