Engagement Ring buying advice and recommendations

This is my advice for someone looking to buy an engagement ring. I've done a lot of research into it, and listed what I thought are the most helpful links. This is an actual email that I sent to a friend who asked for some information.

Hi ----

I was thinking about your engagement ring for ----, so I wanted to send
you some helpful information.

The best forum that we have found for diamond and engagement ring
information is www.pricescope.com
People are really knowledgable there, and willing to help. So if you
wanted to, you could make an account and post your budget, desired
ring style, etc and people will help you get a good ring that fits in
your budget.

There is also a lot of good information there. This link is to the
Diamond Guide
http://www.pricescope.com/wiki/diamonds

They also have an engagement ring tutorial so you can get familiar
with the different styles of rings, important terminology, etc
http://www.pricescope.com/wiki/engagement-rings/engagement-rings-tutorial

I would recommend doing a little research on those forums. I think
that a 10k budget is a lot, you can get a really great ring in that
range. You may even end up spending less. Jeremy originally set a 10k
budget as well, but since we decided to go with sapphires, we are
anticipating spending about 5k for the engagement ring (stone &
setting). Diamond are more expensive, but I think you can get a really
nice diamond and setting in that budget.

I would recommend starting with a 1ct diamond, round brilliant cut.
You can go up in carat size if you feel comfortable, cut I think a 1
ct is a nice place to start. Do not look at colored diamonds or "fancy
diamonds". You cannot afford it. You should also stay above I think
the G color grade, b/c below that the diamonds start looking a little
yellow. I would check this though, bc I'm not completely sure, and the
cutoff may be different based on personal preference.

I would recommend you get the setting in platinum instead of white
gold. Platinum is more durable, and will not wear as much as white
gold. Platinum will need to be occasionally polished, but what I dont
like about white gold is that it is actually a yellow gold core that
is rhodium plated so it looks white. I don't like the idea of plated
things, and people on the forums say that the rhodium plate will wear
off as early as 6 months for some people, and the ring will show
yellowish color underneath. The rhodium plating may last for a few
years for some people with less wear on their rings. Platinum will
cost more than white gold. I would budget about 2k for a nice platinum
solitaire setting, so that leaves about 8k for the stone, which is
definitely reasonable. I do not recommend yellow gold unless you know
that is what she wants. Yellow gold has fallen out of favor, and is
not "trendy".

For ideas of ring styles, I would look at bluenile.com ,
whiteflash.com , goodoldgold.com
They have a large selection of rings, so you can look and see if there
are certain styles that would be best. I would focus on the solitaire
settings, because it is a really classic style. I'm not sure what -----
means by "vintage," if she actually wants an antique ring or something
1920s style or whatever. I would go with a solitaire if you are not
sure.

Do not buy from Tiffany & Co. Do not buy from Etsy. Tiffany is way
overpriced, and Etsy quality is questionable and often overpriced. Do
not buy from Zales or Jareds or any other mall store. Overpriced and
poor quality.

I'm not sure if there are any custom diamond cutters like there are
for colored stones. I was just thinking that the supply chain is so
tightly regulated, and diamonds are so expensive, that I doubt there
are any cutters that buy diamonds to recut. You might find a diamond
cutter if you look around, but I doubt it. However, all diamonds come
with a certification that describes how well it is cut. Cut is
actually pretty important of the 4C's, bc a lot of the brilliance and
scintillation of a diamond depends on the cut.

There are some really good custom ring makers, if you want to go the
custom route. Brian Gavin (www.briangavindiamonds.com) was one that I
was looking at for a while. Another good ring maker is Leon Mege
(www.leonmege.com). Mark Morrell (http://www.mwmjewelry.com) also does
really great custom rings and has a really great style.

If you want to order a custom ring, it will be a little more
expensive, and you will have to wait around 6 weeks for the product.
Usually the process goes like this - you contact the ring maker with a
specific idea of what you want made. They will clarify with you the
details of the ring, then make a CAD rendering of the ring and email
it to you. You can indicate changes that you want from the initial CAD
rendering, and it can go back and forth like this for a few drafts
until you are satisfied. The ring maker will then create a custom ring
mold to cast the ring in, then set the diamond in it, and you are
done.

If you want to go the custom ring route, I would make sure you know
exactly what you want. I would save some pictures of ring styles
online that you want to incorporate elements of, or draw some
preliminary sketches to show the ring maker.

I hope this is helpful. I would do a little research on pricescope.com
first, then look at some engagement ring prices and styles on the
different websites I suggested. If you feel that there is no ring
style currently in production that you think ----- would like, or you
really want to give her a one of a kind unique ring, then I would
contact some of the custom ring makers. But make sure you have an idea
of what you want before you contact them, which is why I suggest
looking at sites with a nice wide selection of rings as a preliminary
step.

When you buy the ring, make sure you get it appraised and insured. You can get insurance through an additional rider on your homeowner's insurance. Or you can get a separate jewelry insurance, which may offer more coverage. Either way you will need an independent appraisal. This is important in case of theft or loss, since it is such a big purchase.

Ok, I hope that information is helpful and not too overwhelming. If I
think of anything else, I'll send it to you later.

The De Beers Diamond Cartel

The Diamond Cartel

History

De Beers is a private cartel of companies that dominates the entire diamond supply from mining to manufacturing to shops. De Beers was founded in 1888 by Cecil Rhodes, a British businessman. In its heyday, De Beers was active and dominant in every category of diamond mining and manufacture. They utilized open pit, underground, large scale alluvial, coastal, and deep sea mining in Botswana, Namibia, South Africa, and Canada. The company had essentially a global monopoly on the diamond industry for many decades. This lead to many allegations of price fixing and antitrust behavior that were undoubtedly true.

Cecil Rhodes got swept up in the diamond rush of 1871 in South Africa, and began buying up land claims of small mining operators. With additional British funding support, he was able to eventually become the sold owner of all diamond mining operations in South Africa.

In 1889, Rhodes negotiated with the London Diamond Syndicate, who agreed to purchase fixed amounts of diamonds at an agreed upon price. This strategic plan regulated diamond output and maintained diamond prices in London. By controlling all supply, De Beers maintained complete control of diamond prices, and could maintain them at an artificially high price level. Cecil Rhodes died in 1902, when De Beers controlled 90% of the world's diamond production.

Also in 1902, the Cullinan Mine was discovered in South Africa. This new large diamond source threatened to weaken the De Beers monopoly. The new Cullian Mine was able to produce as many diamonds as all of the De Beers mines combined, and also yielded the largest diamond ever discovered (the Cullinan Diamond, now part of the Crown Jewels of the United Kingdom).

Ernest Oppenheimer, a major force in the Cullinan Mine venture, took over chairmanship of De Beers in 1927, finally absorbing the Cullinan Mine into the De Beers fold. Oppenheimer understood the core principle of controlling the supply chain that precipitated De Beer's success, and continued running the diamond cartel with that principle in mind.

"Common sense tells us that the only way to increase the value of diamonds is to make them scarce, that is to reduce production." - Ernest Oppenheimer, 1910

Monopoly

De Beers has been using its dominant position to manipulate the international diamond market throughout the 20th century. The company has been able to successfully pressure independent producers to join its diamond monopoly. When producers refuse to join the cartel, De Beers would simply flood their local market with diamonds to drive down the price of competitor diamonds to an unsustainable level, forcing the competitor to join or go bankrupt.

De Beers additionally will purchase diamonds from other manufacturers and stockpile them in further efforts to control supply.

Changes in Business Model

After decades of control, the De Beers monopoly has begun to weaken. New diamond mines were discovered in Russia, Canada, and Australia, and these producers have decided together to distribute their diamonds outside of the De Beers cartel.

Additionally, increasing public awareness of "blood diamonds" has forced De Beers to change their business tactics to avoid bad publicity. The De Beers monopoly that was over 90% up until the 1980s has fallen to around 50% as of 2012.

The De Beers Family

The De Beers Family of Companies is involved in most parts of the diamond value chain. Companies are as follows:

• De Beers Canada – mining

• De Beers Consolidated Mines – mining

• De Beers Diamond Jewellers – retail

• Debswana – mining

• Diamdel – trading

• Diamond Trading Company – trading

• Diamond Trading Company Botswana – trading

• Diamond Trading Company South Africa – trading

• Element Six – Advanced Materials / industrial diamonds

• Forevermark – retail

• Namdeb – mining

• Namibia Diamond Trading Company – trading

De Beers is involved in every step of the supply chain from mining to trading to the retail sale of diamonds and diamond jewelry.

Advertising

De Beers has over the last century been highly successful in manipulating consumer demand for diamonds. Its most effective marketing strategy has been the marketing of diamonds as a symbol of love and commitment.

A copywriter coined the famous line "A diamond is forever" in 1947, which has been named the Best Advertising Slogan of the 20th Century. The ad campaign is regarded as one of the most successful in history and changed the general public’s perception of diamonds. No longer were diamonds seen as a gem reserved only for Royalty and the highest of society, they came to represent love, affection and faithfulness.

The Diamond solitaire is now pretty much synonymous with engagement rings 

The "A diamond is forever" campaign greatly increased consumer demand for diamond engagement rings, especially large diamond solitaires. The prevailing fashion at the time was a single large diamond. However, De Beers had recently acquired mines in Russia that produced smaller diamonds less than 0.25 carats.

Faced with the problem that large diamonds were selling, but smaller diamonds were doing comparatively poorer, De Beers came up with other advertising campaigns designed to sell more diamonds, in particular the small "accent diamond." They began marketing the "eternity ring" in the 1960s. This is thin precious metal band with a continuous line of similar sized small diamonds along the circumference. The Eternity ring was marketed as symbolizing never ending love.

An Eternity Ring, with a continuous line of small diamonds

A Trilogy Ring, with a large diamond flanked by two medium sized diamonds 

Another ring style popularized by De Beers, the "Trilogy Ring," consists of one large diamond flanked by two smaller diamonds, meant to represent the past, present, and future of a relationship. De Beers also introduced the idea of the "Right Hand Ring," bought and worn by women as a symbol of independence. All of these advertising campaigns had a single goal - sell more diamonds.

The De Beers advertising campaigns over the last century have been overwhelmingly successful at altering public opinions of diamonds. De Beers is the only reasons diamonds are associated so strongly with engagement rings, love, and marriage.

Traditionally, plain gold bands were used for the symbol of a wedding union. But this all changed after the DeBeers "A Diamond is Forever" campaign. Now it is expected that men propose with a Diamond engagement ring, and anything different is highly uncustomary. Diamond engagement rings are not only glamorous they have a very special meaning attached to them, they symbolise commitment and the next chapter in a couple’s life, which combined with their beauty is why they are so desirable.

‘Diamonds are a girl’s best friend,’ a phrase and song made famous by the 1949 movie Gentlemen Prefer Blondes in which Marilyn Monroe first performed the song, shows how deeply ingrained the idea behind diamonds has become in society. De Beers was not involved in the song, but I'm sure they were thrilled that the glamorous Marilyn Monroe was helping them promote diamonds.

Diamonds had attained a life of their own. They do not need De Beers marketing anymore because it was originally so successful, diamonds have become a societal norm. People unconsciously associate diamonds with love, women expect diamonds as engagement gifts, men are expected to buy diamonds. Diamonds have become so deeply ingrained, that the diamond is now self sustaining in our culture.

Although the De Beers monopoly has broken up, the company still retains 50% control of the diamond supply, and the De Beers legacy lives on.

Please feel free to leave comments or thoughts you have on the De Beers Diamond cartel. Does it make you want to look for diamond alternatives? My next post will be on sapphires and other gemstone alternatives for engagement rings!

Bonus Facts

• Cecil Rhodes was the founder of the south African territory of Rhodesia, which was named after him in 1895. He was an ardent believer of British colonialism.
• Rhodes University in South Africa is also named after Cecil Rhodes
• The Rhodes Scholarship, a prestigious international postgraduate award for selected foreign students to study at the University of Oxford, was set up and funded by his estate