Diamonds are the most popular gemstone used for jewelry. Diamonds are also the most expensive gemstone on the market. There are other less-expensive gems that look identical to diamonds, shine as bright as diamonds, and are formed the same way as diamonds, but are sold at far lower prices. You might be wondering exactly why diamonds are so expensive compared to other gemstones. Let’s first begin with exactly what diamonds are and how they are made.
Where Do Diamonds Come From?
‘Earth-mined diamonds’ is a phrase that you’ll most likely come across when you’re shopping for diamond jewelry. And you may be wondering why this is specified. Diamonds come from deep within the earth’s crust; therefore mining is required to get them. The diamond market highlights the fact that diamonds need to be mined, in order to add a certain prestige to the item. It’s not something that can easily be acquired or replicated.
This is one reason why diamonds are expensive. It takes an entire industry, scientific method, and geological resources, not to mention the labor of hundreds of people, to eventually get diamonds out of the earth and into a jewelry store.
Impressive facts about where diamonds come from:
- Diamonds form deep in the earth’s crust; at depths that can not be reached by man
- Volcanic eruptions carry diamonds out of the earth’s deep crust, and onto the surface of the earth
- There’s no other way to retrieve diamonds from within the earth’s crust; we simply have to rely on volcanoes to carry them out.
- They need to be mined out of the lava from eruptions that happened millions of years ago
Diamonds are not rare, but they are a unique gemstone in that they are naturally un-retrievable by man. This adds to their value. But this isn’t entirely why they are expensive. Their high selling price started with a strategy implemented by one group, De Beers.
What Makes Diamonds Expensive?
You’d never guess that it took only one group of companies to tweak the history of diamonds and their value, so much so that this solidified their high selling price in the market up to the present day. It all started with a unique strategy created by De Beers.
How the De Beers Group Made Diamonds Expensive
De Beers is an international group that specifically earns by mining and selling diamonds. They were a collection of businesses that pioneered the mining and selling of diamonds at a high price. But with the demand for diamonds growing, it was natural that they searched for more ways to retrieve these precious stones from the earth. This took a turn as this led to the discovery of numerous diamond mining sites in South Africa back in the 1800s. And thus, the supply of diamonds grew.
This sudden peak in supply was both a blessing and a curse for the De Beers Group as they knew that with a high supply available for the market, it was almost inevitable that the price of diamonds would plummet, taking away their opportunity to sell this at a high price.
To control the supply of diamonds pouring into the worldwide market, the De Beers Group took control of the mining industry by purchasing as many as they can. This gave them full control of how many diamonds can be sold in the market, and therefore, the price they are sold at.
The De Beers Marketing Campaign that Changed the Game
It wasn’t enough that the De Beers Group had full control of how expensive diamonds were sold all over the world. They needed to implement a strategy that will sustain high demand for the product. You may be wondering why diamonds are so expensive. What you don’t know is that for the better part of the century, the De Beers Group created a marketing campaign that made the entire world believe that diamonds are expensive and are the ultimate symbol of love and marriage.
The De Beers Group strategizes a marketing campaign that popularized diamonds as a symbol of marriage. Thus, the world was introduced to the diamond engagement ring. They created incredibly effective advertisem*nts that showed men buying diamonds for the love of their life, and asking for their hand in marriage. This changed the game.
You now have every couple who was in love, believing that the true act of love must include that incredible diamond ring. It quickly became a symbol for engagements, successfully encouraging the demand for diamonds to rise more than it ever did before.
Because of their full control over the supply of diamonds and their effective marketing campaign for diamond engagement rings, the price of diamonds stayed expensive, but the demand kept growing worldwide.
How did diamonds become so valuable?
Diamonds became valuable due to a combination of factors. Firstly, their rarity and limited supply contribute to their high value. The process of mining and extracting diamonds is demanding and involves significant resources. Additionally, effective marketing campaigns throughout history, such as the “diamonds are forever” slogan, have created a strong demand and perception of diamonds as a symbol of luxury, love, and status. These factors have contributed to diamonds becoming highly prized and valuable gemstones in the market.
Why are diamonds forever?
Diamonds are often referred to as “forever” because they are extremely durable and resistant to wear and tear. They have a high hardness rating, making them one of the hardest substances on Earth. This durability ensures that diamonds can withstand the test of time, maintaining their brilliance and beauty for generations. Hence, the phrase “diamonds are forever” symbolizes the everlasting nature and enduring quality of diamonds.
Are Diamonds Really Expensive?
The price of diamonds has always been high (thanks to the De Beers Group). If you’ve ever experienced shopping for diamond engagement rings, you’ll notice that the prices range around thousands of dollars. But did you know that diamonds are, in fact, not that expensive in the first place? The diamond industry determines the value of diamonds because of what happens to them from the moment they are dug from within the earth to their appearance at jewelry shops. Diamonds are unpolished stones that require a whole industry to process them into the diamonds we see on engagement rings.
The process starts with the mining companies. Diamonds get shipped across the globe to the craftsmen and factories who cut and shape them. They are handpicked by experts and sent to Gemological Laboratories for certification and used by jewelers to create and design beautiful diamond jewelry.
The actual diamond stone is not expensive. But the process it goes through to become that brilliant shining diamond adds to its high selling price.
Interesting Myths About Diamonds that are Not True
Unfortunately, there are a few big myths about diamonds and their price, that are simply not true. But these are style common information that buyers often have pre-conceived ideas about, which leads them to spend too much on diamond jewelry. Here are the myths you need to know to help you understand why diamonds are expensive, and if you should shop for expensive diamond jewelry.
Myth 1: A Larger Diamond Means a Higher Price
When you shop for diamond rings, you’ll notice that the bigger the Carat weight of a diamond is (the larger its size) the more expensive it is sold for. This is true as the price does increase as the Carat weight does. But it is also false in the sense that this doesn’t apply to all diamonds.
The price of a diamond is determined by how perfect it is according to the grading of the 4 C’s of diamonds (Carat, Cut, Clarity, Color). These gradings identify if a diamond is perfect according to the way it is cut, if it has any inclusions (its Clarity), how colorless it is, or how big it is. A Gemological Laboratory grades diamonds. The better the gradings are, the more expensive a diamond is.
But there’s a catch. If a diamond that’s large in size has poor clarity, isn’t cut in a visually flattering way, and is colored, then it is valued at a lower price than say a smaller diamond with a perfect 4C grading.
It is not entirely true that a larger diamond equals results in a higher price. You have to consider the 4C’s of a diamond, regardless of how big it is.
For example, a 4 Carat Round Cut Diamond Ring is available for $14,000 (an average price of $20,000 to $30,000)
Myth 2: Diamonds are rare and that’s why they are expensive
The idea that diamonds are rare is something that has been implemented through the use of marketing strategies to encourage people to buy them at their high selling price. But the truth of the matter is, there’s actually quite an abundance of diamonds in the mining industry. It merely seems rare as the supply of diamonds is controlled by big corporate groups such as the De Beers group. In fact, in just 2019, an estimate of 140 Million diamonds was mined and processed for selling. Diamonds are not rare, but their supply is controlled to maintain their high market value.
Diamonds that are perfect; flawless, colorless, and perfectly cut, are the diamonds that are rare. These diamonds are very hard to come by as most earth-mined or lab-grown diamonds form with inclusions, color, or imperfections.
Myth 3: Only earth-mined diamonds are real
You’ll find different alternatives to diamonds such as Moissanite and lab-grown diamonds. These are more affordable choices. But you might feel discouraged to buy anything that isn’t earth-mined, as you might feel like these are not real.
This is a big myth in the diamond industry that appeared when lab-grown diamonds were introduced to the market. Scientists discovered how to re-create the exact conditions an earth-mined diamond forms in, to form their own lab-grown diamonds. The big question people have is if these lab-grown diamonds are real if they did not naturally form within the earth’s crust.
The great thing about lab-grown diamonds is that they look identical to earth-mined diamonds. In fact, it is almost impossible to tell the two apart. The only big difference is that they were created in a laboratory.
Lab-grown diamonds are just as real as earth-mined diamonds. Moissanite Gems look just as good as earth-mined diamonds. It is not true to say that only earth-mined diamonds are real.
You can learn more about the differences between earth-mined diamonds, lab-grown diamonds, and moissanite in this article>
Check out these Lab-grown diamond engagement rings:
Myth 4: Diamonds are a great investment as they have a high market value
Diamonds are an incredible piece to own, but it’s a big myth that these are an investment. When you invest in something, you hope to be able to re-sell it at a higher price than what you paid for. But the jewelry industry doesn’t work this way for diamonds.
When you buy a diamond that is worth $1,000, and you choose to re-sell it to a jeweler after, it’s most likely that its value would have depreciated down to 50%. You’ll probably only get $500 for the diamond that you initially bought for a thousand dollars. This is because there’s no high demand for used diamonds. It’s simply not an investment, but rather, a purchase that’s created for you to keep and not sell.
Myth 5: You have to spend a lot of money on diamonds because the bigger the diamond is, the better
It’s often sold to buyers that you have to buy the bigger diamonds because it is better. You have to consider that anyone telling you this is trying to sell you a bigger diamond and wants you to spend more money. But jewelers will argue that it is not always better to buy the bigger stone. This is because the imperfections and inclusions on a bigger diamond are more obvious. It’s easier to see cloudiness, color, and inclusions on a bigger diamond. On the other hand, with a smaller diamond, you’ll need magnifying tools to see these natural inclusions and imperfections.
Unless you can afford a large diamond that’s perfect, and therefore, more expensive, then it’s not the best idea to buy the bigger stone if you’re hoping for a beautiful piece of jewelry.
Are diamonds really worth the money?
Yes, diamonds are considered valuable and worth the money due to their scarcity, durability, and beauty. Diamonds are formed over millions of years under intense pressure and are one of the hardest substances on Earth. They are highly sought after for their sparkle and symbolism. However, the value of a diamond can vary based on factors such as carat weight, cut, color, and clarity, so it’s important to do research and make an informed decision before purchasing.
What a diamond symbolizes in engagements and marriages is still something that out-weights the history of its value. It’s the way a person, someone you love, declares their commitment and love for you. Diamonds represent success and luxury. Ultimately, it is up to you what a diamond means to you. Whether you prefer an expensive diamond or would be equally happy with an affordable diamond, the choice is always yours. But it is definitely fun to learn the answer to the big question – Why are diamonds expensive?
