Whether you’re shopping for an engagement ring or already have one on your finger, at some point you have certainly asked the question – did I get ripped off? Engagement rings are such an important purchase and since we want to make it perfect, we’re willing to put our wallet where it counts. But that doesn’t mean we’re fine with a jewelry retailer taking us for a ride. We want the best ring possible as well as the best price in town.
So how much does my engagement ring actually cost? It can be tough to tell, especially when you’re shopping at a physical jewelry store. Without the ability to comparison shop across multiple retailers, it’s tough to tell what the true value of a given diamond is.
That’s why we’ve started to answer this question with Ritani, the online diamond and engagement ring retailer. They have a selection of over 100,000 diamonds which allows us to measure prices against each other to ensure the markup isn’t extreme, but more importantly they have price transparency.
Transparency in the price of diamonds is not very common in the jewelry industry because there’s so much mystery behind what goes into them. How rare is a diamond, actually? Where do the diamonds come from? How long did it take for a diamond to form? How much does it cost to mine a diamond? Cut it? Grade it? Any reasonable shopper can start asking themselves these questions and start to accept a much higher price tag than necessary. Diamonds sound expensive, so they really must be.
Back to Ritani’s price transparency.
Ritani, in an effort to put customers first and give them the knowledge and power when buying a diamond, tells you exactly how much the diamond costs them, and why they are charging what they are charging. Let’s take a look at a 1 CT round diamond as an example.
The diamond price is $2,771 – which according to their Market Analysis AI, makes it one of the best values on the market. Based on our analysis of similar diamonds, this appears to be true. Other retailers have very similar diamonds up to 10% more expensive.
So, we know it’s a good value, now how did they come to decide on this price, which is better than what others might be offering? They tell you.
First, they paid $2,357.46 for this diamond. That the price that wholesaler or vendor who is selling them out is charging Ritani for the stone. So maybe Ritani can charge less because they got a better deal from their vendor than other retailers?
Next, they share with the customer exactly how much fulfillment costs are. Everyone understands that moving products around, whether it’s the new TV you bought from Amazon or the diamond you’re buying from Ritani, costs money. Since most diamonds come from outside the US, this includes the costs of customs, shipping and anything else that could go into fulfilling the order like housing or packaging.
Finally, they tell you how much money they’re going to make on the diamond. They’re not trying to confuse you to make it seem like they have all these costs and factors and they’re really doing you a favor selling the stone to you at a certain price. They say, “Hey, we’re a business who tries to make money. This is how much we will make on this order.”
Consumers are smart, so they understand Ritani need to make money to build out tool like their Market Analysis AI or to be able to list so many diamonds in one place. In this case, they are making $261.14 on the diamond. That’s 9.4%. Not very high of a margin for the company to take, but that could also be the reason their pricing makes it a best value.
While searching diamonds high and low, we’ve found that diamond markups can range from around 9% to over 20%. In jewelry store, the markups go even higher. Transparency like Ritani’s allows customers to make sure they are getting the best deal.