If you’ve shopped for diamond jewelry, a loose diamond, or even a lab grown diamond, you have probably experienced a bit of sticker shock and begged the question “why are diamonds so expensive” or “why are diamonds valuable?” You are not alone. While most people point to the principle of supply and demand to explain the high price of diamonds, this isn’t the full story, and it didn’t satisfy us. So, we did a bit of digging to get to the bottom of it.
Here, we explain why diamonds are expensive, but we don’t stop there. We also offer a solution to navigating around this tough-to-stomach expense. Because whether you’re shopping for an engagement ring or a special gift, diamonds truly are and always will be irreplaceable.
Why Diamonds are Expensive
There are many factors that have contributed to the high cost of diamonds throughout time, and that contribute to the higher cost of some diamonds over others.
When any company or diamond dealer has a monopoly over a certain diamond market, they control the price of the goods in that diamond market. This is what happened with diamonds. By the early 1900s, De Beers Consolidated Diamond Mines owned around 90% of the available diamond supply, which meant they could drive up prices. The company continued to keep the diamond price high by launching a marketing campaign that would define an expensive diamond as the gemstone for engagement rings. Of course, this increased the demand for diamonds significantly; a demand that still exists almost a century later. Thus, the main reason the perfect diamond
Another factor that contributes to a diamond’s expense is labor. In any industry, labor is a large expense that gets passed along from the company to the consumer. In the traditional diamond industry, labor includes and is not limited to miners, transporters, diamond cutters, appraisers, designers, and jewelers. That is a lot of labor expense to account for.
While diamonds aren’t rare (a common myth), some kinds of diamonds are. Certain diamond shapes, colors, and size options are indeed rarer. The higher the quality and the larger the size, the more expensive the diamond. Because the supply of these kinds of diamonds is low, and the desire for them is high, the expense is warranted.
When it comes to comparing the prices of individual natural diamonds, diamond cut is one of the main factors that influences cost. Certain cuts, such as the round brilliant cut, waste much of the raw diamond, while other cuts, such as the princess cut, utilize most of the raw precious stone. This means that a larger original diamond is needed to produce a round brilliant cut diamond than a princess cut diamond of the same carat weight. Thus, round cut diamonds tend to be much more expensive than princess cuts and other diamond cuts that utilize more of the raw stone.
A More Affordable Diamond
For centuries, shoppers have swallowed the expensive pill when purchasing diamonds, because seemingly, there was no better choice. That is, until now. Lab created diamonds are chemically identical to mined diamonds but cost up to 40% less. Thanks to modern technology and scientific innovation, high-quality diamonds are more attainable than ever before.
Why Are Lab Grown Diamonds Cheaper?
While lab diamonds are chemically and physically identical to mined diamonds, they are created differently. Natural diamonds pulled from the earth are created over millions of years under intense heat and pressure, a lab created diamond is grown fairly quickly in a controlled environment from a single carbon seed. Using advanced technology—either CVD or High-Pressure High Temperature (HPHT)—the carbon seed slowly forms into a crystalline structure. The time and technology required to produce man made diamonds are what make them far less expensive than natural diamonds.
In terms of labor, lab grown diamonds cut out many of the miners and middlemen that are responsible for getting diamonds from the earth to the jewelry case. At 12FIFTEEN Diamonds, we keep labor costs even lower by servicing customers directly online.
However, we don’t expect lab grown diamonds to be cheaper forever. Because lab grown diamonds are technically rarer, we suspect that as more people become familiar with the advantages of lab grown, prices will rise on pace with demand.
A More Ethical Diamond, Too
Lab diamonds aren’t only the more affordable option, but also the more ethical option. Long before Blood Diamond hit theaters, conscious consumers were questioning the source and the impact of purchasing natural diamonds. It wasn’t until recently, though, that more ethical diamonds became available. Today, we know too much about the business of diamond mining and its environmental and human impact to sell even one mined diamond. This is why at 12FIFTEEN Diamonds, we only offer beautiful lab grown diamonds, now and forever.
See our article: Why are diamonds unethical?