IamA owner of an online diamond company, AMA

Do you give free samples?

Actually yes! But you have to come to our offices in midtown Manhattan, or be a girl that I'm trying to impress. I'll tuck a few into the change pocket of my pants whenever I go out. People usually just act confused when I hand them a one-carat diamond and tell them they can keep it, although it usually doesn't take long for me to confess that it's actually a cubic zirconia, and worth about fifty cents.

You mean superior quality cubic zirconias?

Actually... now that you mention it, yes. We make CZ jewelry sometimes to show customers what a piece will look like when it's finished, but if you want to buy the high-quality CZs in the diamond district of Manhattan, they overcharge you by a ridiculous amount. The only other option, if you want the higher-quality CZs and not the stuff that's made for dollar-store jewerly is buying them in bulk, but then you have to buy a LOT. So we have all these extra CZs lying around that we'll probably never use up.

Do you guys throw around geology puns? That'd rock

Well, we're more involved on the sales side, so our jokes tend to be more from that side of things. For instance, there was one case where a supplier was refusing to accept the terms of an agreement that they'd previously agreed to in writing, in order to make a sale. So we wanted to list their supplier name as something that no one would buy from. My nomination was "Kony's Diamond Emporium". :)

Is there any real reason nowadays that artificial diamonds are seen as a poor cousin of natural ones?

Because there's no guarantee that lab-made diamonds will continue to have value. Natural diamonds are rare enough that we can guarantee that even if they find a bunch of new deposits, they'll never going to be so cheap to extract that the price of diamonds will fall dramatically.

Right now, artificial diamonds are hard and expensive to make. They use a technology called "carbon vapor deposition" where they essentially shoot a thin mixture of methane and hydrogen with microwave radiation, trying to create carbon atoms floating around that aren't bonded to anything. Eventually, they bond either to a diamond seed crystal, which grows it, or the hydrogen, which makes it turn back into methane. This process takes a really long time, and requires tons of energy. For diamonds larger than a carat, it's usually cheaper to buy a natural diamond.

If you want to get something that is very difficult to distinguish from a natural diamond and wouldn't have any value to a jeweler or diamond trader, you may as well get a cubic zirconia or moissanite.

TL;DR: The main reason people are willing to pay as much as they are for natural diamonds is because they know that they'll continue to have value.

The main thing I have issue with is that natural diamonds have "value" that artificial ones don't, given they're almost identical. The only difference in "value" is a purely subjective one of where they came from, and that's only because the jewellery/diamond industry keeps telling people they have more "value".

By that logic, a copy of a famous painting should be worth the same as the original, since most people wouldn't be able to tell the difference. Again, the main reason natural diamonds are more valuable than synthetic ones is because of their known scarcity.

TL;DR: People buy natural diamonds precisely because they're expensive.

You can tell the copy apart. Diamonds aren't like that, are they? If one of each were put into a bag and you randomly pulled one out, could you determine which was 'real'?

You wouldn't be able to tell a copy from an original, I'd imagine. But an art expert could. Same goes for diamonds. A trained gemologist can tell a CVD diamond from a natural one.

Isn't the only reason diamonds have any value due to very shady diamond wholesalers who buy up all the diamonds and store them, as to not flood the market while simultaneously creating a fake scarcity?

That used to be the case with De Beers in the 1980s, but then a bunch of diamond mines opened in Russia and Canada that De Beers wasn't able to get, and they ended up losing a bunch of money and their diamond stockpiles. De Beers still controls about 40% of the world's diamond mines, but they're no longer able to control the supply like they used to.

Exactly. Time Warner is doesn't have a monopoly either. There's other companies to compete with them, like Comcast. This keeps the market competitive and balanced.

The difference is, there are hundreds of diamond mining companies on four different continents. Russia's a major player too, and they don't like cooperating with anyone. They were actually instrumental in breaking up the De Beers monopoly in the 1990s.

alright, how do the lab made diamonds affect future investments?

Well, the processes that create natural and synthetic diamonds are very different, and so it's always possible, though not always easy, to tell a synthetic diamond from a natural diamond. So the way the business works is, in order to sell a diamond to a jeweler or reseller, you need to have it certified. Usually by GIA, but there are other labs too. They analyze it using spectroscopy tools, measure a bunch of its characteristics, then laser-inscribe the diamond's certificate number on the edge of it. Synthetic diamonds can be certified too, but they're certified as being synthetic. And nobody really considers synthetic diamonds to be a store of value like they do natural diamonds. The whole reason people are willing to pay that much for natural diamonds, is because they can be pretty certain that there's never going to be any huge influxes of natural diamonds into the market that will lower the prices too dramatically. That is, natural diamonds are pretty much guaranteed to retain most of their value over time. With synthetic diamonds though, there might be some technological breakthrough that makes them much cheaper, like what happened with aluminum in the 19th century. Aluminum used to be more valuable than gold, until they developed technology to make it much more cheaply. The same thing could potentially happen with synthetic diamonds.

If the differences are basically non-existent to even someone experienced with diamonds then why do people want to buy the natural diamonds. I get that you said they hold their value due to low influx rate but isnt that mostly artificially created by the larger diamond mining companies

They want to buy natural diamonds precisely because they're expensive. It's sort of a social game, really. You don't have to play it, but a lot of people do, and enjoy playing it. And because diamonds have been associated with wealth and value since ancient history, there's a lot of cultural links there.

Also, diamonds are rare in that you have to go through roughly one ton of kimberlite ore to get one gram of gemstone-quality diamonds. You also have to build mining infrastructure somewhere that in most cases is pretty remote. That's where the cost comes from.

We never had the money when we got married, so my wife never had an an engagement ring. Rather than run the risk of blood diamonds and artificial monopolies, I talked her into going moissonite. It is a beautiful crystal, durable, high refractive index, and didn't cost as much as a car. Your thoughts?

In my opinion, you could have spent more on the setting and gotten a CZ stone, which would have been a lot cheaper. People tend to recognize CZ jewelry more by the quality of the setting than by the actual stone. So if you just set a CZ in a high-quality setting made by a jeweler, even professional jewelers wouldn't notice the difference unless they really scrutinized it. Especially so, if you got the CZ in like, an I or J color that is really rare for a CZ but really common for a diamond. I think the main reason people buy moissanite jewelry instead of CZ is because they think diamonds are overpriced but feel cheap only paying a couple bucks for a CZ. But if you spend a couple hundred dollars getting a jeweler to make you a custom setting that incorporates some personal touch that makes it unique and distinct, then I think that's a better use of your money. But personally, I don't think the price difference between moissanite and CZ warrants buying moissanite. Especially because you're more likely to lose a stone than chip it, and a CZ is extremely cheap to replace.

Some people point to the higher refractive index of moissanite compared to diamond and CZ to say that it's better as a gemstone, but really, that just means it can be cut shallower to have same light return. In practice, it makes little difference if you're looking at it, and moissanite has some optical properties that make it less than ideal as a gemstone.

But I don't think there's anything wrong with buying a diamond simulant for an engagement ring. Really, it's all about what you and her think is best.

edit: keep in mind this is just my opinion. I'm not a professional jeweler, and my knowledge and experience is more on the software side.

As a gentleman getting ready to purchase an engagement ring, what is the best way to make sure I'm getting the best deal possible either online or with a brick and mortar jeweler?

Any reddit discount code?

Honestly, our margins are usually less than just the sales tax that you'd pay at a retail store, so you can save a lot of money just by buying online. You can also save money by sending a bank wire instead of paying with a credit card, since the credit card processor takes 3% off the top. Even if an online jewelry retailer doesn't specify that they'll accept bank wires, they'd probably give you a discount if you called them up and asked.

Actually, I did make a Reddit discount code when I was writing creating the backend for our coupon system, that I'd planned to post in /r/jewelry until I read their no-advertising policy. It's "colby2012". Heh heh.

edit: Blue Nile is probably the largest online diamond retailer, and due to their volume discounts from suppliers, it can be hard for other suppliers to match their prices. However, their jewelry is mass-produced, so if I was going to buy an engagement ring, I'd probably get a slightly smaller center-stone diamond and pay $100-$200 more on the setting to get it custom-designed so you have something unique. Jewelers will do this locally. We do it too, and send computer-rendered images of the CAD design to the customer until our CAD guys get it right.

edit2: There's actually a significant jump in price at popular carat sizes. I guess a lot of people go into this saying they want at least X carats, and then end up not getting anything below that. So you can buy a 0.94 carat diamond for quite a bit less than a 1.00 carat diamond, even though pretty much no one would be able to notice the size difference. In fact, some diamond polishers will even cut a diamond poorly just so they can make it a little bigger and push it over the one-carat mark or the two-carat mark. We keep an eye out for this though, and would make sure not to sell these diamonds.

Can I have a job?

Are you in commuting distance from midtown Manhattan? Also, what kind of job? At some point, we'll probably be hiring for sales and software development.

I actually live in manhattan. Is there a way by which I could apply?

It depends what you're good at. People send me unsolicited resumes all the time, so I've started ignoring them. I would only make decisions for software developers though, and you'd have to go through our CEO if you're interested in sales.

I guess we'd have to reach a point where there was some gap in our work that we didn't have the skills for.

So... I'd have to think about it? Or rather, get to the point where there's some type of work that needs to be done that no one is currently doing. But like, the second I post a job online, I get floods of resumes, so I barely even bother to look. The only time I posted a job on Reddit, I offered to pay a few hundred dollars for someone to write some shader code, and that it could possibly lead to a full-time position. I was serious, but I got downvoted to oblivion and everyone bitched at me, saying that a job like that should pay that much an hour and calling me all sorts of nasty names.

hahaha cool. Shame I'm from Mexico. btw awesome post and proof haha, greetings!

We actually hired a frontend developer to work remotely from the Dominican Republic and flew him out for this past summer. Of course, we brought him on back when everyone, including me, had to be willing to work for practically nothing but equity. We're still not rich, but we're doing alright. We'd be willing to hire a remote developer again, but they'd have to be really good at working with minimal supervision.

Is there any reason why rhombus shapes are called diamonds (i.e. playing cards)? Even though diamonds are... not rhombus shaped?

Actually, diamonds in the rough are commonly found in an octahedral form (it's just how some minerals grow due to the bonds made, another example would be magnetite). If an octahedral is looked at in the correct orientation it does in fact look like a rhombus. I'm on mobile so I can't link an image right now but a quick search for diamond octahedral will yield some good images!

Actually, I had an image that I was waiting to upload to imgur before I responded. Here's a really good image of some natural diamonds:

http://i.imgur.com/nB2HvjI.jpg

They're shaped like octahedrons (or a d8 if that's your language) which is how people immediately recognize that they're diamonds when they find them in nature, and not some other clear stone like quartz.

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Because people dont know what to buy, or what they are worth - but my father buy's diamonds from consumers all the time. Often they admit that he paid them more than they paid 20 years ago. Diamond prices go up, you just have to find a buyer and have something thats worth something. If you are going to zales, you are likely buying a diamond with little or no resell worth. But can scrap the metal.

Joshua, CEO of EnchantedDiamonds.com

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Resell it to a jeweler, who buys them wholesale anyway, and would pay you near the wholesale price if it was something he wanted.

How much did your website cost? Fine if you can't give exact numbers but a ball park figure? I'm looking to get one made and yours is a lot better than I thought it was going to be. Ps I don't sell diamonds

I built the initial site over the course of about 4-5 months, then we eventually brought on three other programmers and a graphic designer to add features and make it look a lot better. My initial version of the site used Webflow (webflow.com) to make the static version, then I manually changed all the HTML to ERB to make the page dynamic. The backend stuff was the hard part for me, since we have to store all sorts of diamond pricing data that's updated at least once a day, often by suppliers that don't double check their input, so we have to do a lot of checking it for accuracy.

Have you ever read the book The Diamond Cutter? If yes how close are the actual diamond business aspects to what you do today with the internet and all?

Sorry. I haven't. For some reason, most of the information that people know about how the diamond industry works seems to be stuck in the 1980s though, when De Beers controlled the market and when conflict diamonds were funding the civil wars in Sierra Leone and Angola. Nowadays, Sierra Leone is actually using the money from their diamond mines to rebuild the damage caused during the civil war.

My mother tried to sell an ring that cost 5k3.5k but the only offer we could get was 600 for the ring. Where is the best place to sell a diamond ring?

Everything is certified and papers say the value of the ring is 5.4k3.9k http://imgur.com/SNTwZw0 Image of ring report

Sorry to hear that, but used diamond rings are really hard to sell.

Here's the classic article about that:

http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/

seems that after purchase a diamond is worthless :)

There's still value, but nowhere close to the appraisal value.

Your best bet is probably EBay:

http://www.ebay.com/sch/Diamond-/164306/i.html?_nkw=used+diamond+solitaire+engagement+ring+gia&LH_Complete=1&LH_Sold=1&rt=nc

It looks like most rings are going for between 20-50% GIA appraisal value.

GIA doesn't appraise diamonds, they grade them. They have the job of describing every detail of the diamond with as much accuracy as possible, but it's market forces that determine how much a diamond is worth, and that changes constantly. Your best bet for determining price is checking wholesale prices of similar diamonds. Although those prices can be hard to get if you're not in the diamond business, sites like ours or Blue Nile have a fairly low and consistent markup, so you can check prices there too, to determine a ballpark price.

Do you actually like diamonds? I think they are overused, overvalued and just look tacky now.

You mean would I pay the prices that our customers do? Not for myself. Well, not unless I was trying to smuggle money or something like that. (I'm not) Diamonds work spectacularly well for smuggling money, since they're way more valuable than gold or platinum per unit mass, and they don't show up on a metal detector. That's why they make so many movies like Snatch about stealing or smuggling diamonds.

Initially, I thought it would be cool if we could accept bitcoins as payment, but it turns out there were a ton of regulations passed on diamond sellers with the Patriot Act legislation, so if we did accept bitcoins, we'd probably end up getting charged with some money-laundering related crime.

Of course, being that I have the job that I do, it wouldn't reflect well on our company if I got engaged and didn't get a diamond ring made by our company, but if I didn't have the job that I do, I guess it would depend on what I think my hypothetical girlfriend wants.

I have an uncle who is a diamond wholesaler. And I know he got into the business(from the ground up) because a group of orthodox Jewish diamond merchants needed a 10th man for their Minyan(one of their colleagues had died).

Not trying to perpetuate stereotypes, but I'm legitimately interested. In your opinion, roughly what percentage of those involved in diamond distribution are Jewish?

Not close to where it used to be.

The business is completely dominated by Indian diamond polishers.

Joshua Niamehr, CEO of EnchantedDiamonds.com

Follow up, what cities/regions seem to be the biggest markets for diamond distribution? Off the top of my head, I know NYC, Amsterdam, and Tel Aviv have long been industry hubs, but what other places are fairly large?

I'm gonna go ahead and guess some places in India will make the list.

Antwerp and Hong Kong are pretty big too, although Mumbai seems to be the biggest these days.

I am looking for some half carat diamond earrings for the SO that won't break the bank. What clarity/color is the least I can go and still maintain some level of quality? Seems like they vary in price so much so I was wondering at what point do they become noticeably cheap, so to speak? I need one of those books, shopping for jewelry for dummies.

Try for the carat sizes that are just shy of an even number. Sizes like 0.45 or 0.94. There's usually a significant jump in price when you reach a whole number. Also, non-round shapes tend to be cheaper, and you probably aren't going to be able to notice the difference between SI1 diamonds and anything better without using some kind of magnification.

What is your opinion on moissanites as jewelry?

I don't think they're different enough from CZs to justify the price difference, personally. People try and make a lot of the fact that it has a higher refractive index than diamond, but all that means is that it can be cut shallower for an equivalent light return. CZ isn't as hard, and can scratch more easily, but honestly, at 1% of the cost of moissanite, the replacement cost for a CZ is practically nothing. And I carry CZs around in my pocket all the time, and haven't seen one get scratched yet.

But really, it's up to you. They all look like diamonds to most people, and even jewelers usually tell CZ jewelry from diamond jewelry more by the quality of the setting than by any optical properties of the stone.

3 parter -

Are you impressed by the ability of your industry to assert that 'natural' diamonds are far superior (and thus more expensive) to man-made diamonds, when at the atomic level, they are identical?

Do you rub your hands with glee knowing your industry can set any price it wants for an essentially worthless piece of carbon?

Do you feel slightly bad that you're selling rocks to people?

*EDIT - Obligatory Gold comment. Thankyou stranger. I'm off to lord it up in the lounge. I'm out of here peasants. Peace!

Why do you think diamonds are worthless? Diamonds are worthless in the same way that Picasso paintings are worthless, despite being made out of fairly common elements. Just because you wouldn't pay what they sell for, doesn't mean they don't have value.

This is a picture of a diamond mine, located in the middle of nowhere in the Canadian tundra:

http://www.mining-technology.com/projects/ekati/

Do you think that mine built itself? Or rather, do you think anyone would have built it if diamonds were worthless?

edit: As far as feeling bad, of course not. Historically, a lot of diamond retailers have manipulated customers into buying crappy diamonds that were cut it a way that they could make it a larger carat size, even though it looked like crap. We're focused on a business model of much more honest and open communication with our customers, and making it a policy to not sell overpriced crap. Also, we've been able to bring on two developers as interns, then hire them full time. We also have a lot more sales staff per customer than our competitors, and our goal is to buck the trend that's going the opposite direction. So in that sense, I'm actually kind of proud of what we've been able to do. Our customers all know exactly what they're buying, so why would I feel bad for them?

I'm looking to purchase an engagement ring for my girlfriend. Can you hook me up with a good deal?

You can always haggle with our CEO. Or use our Reddit coupon: colby2012

Hi, thanks for doing this AMA. My question: what is the best place to buy natural colored diamonds (variety, quality and price)? I've been looking for a teal colored one for an engagement ring for a while now and I have not been able to find a suitable one (always either wrong size or cut). Also, just point blank: do you sell colored ones? :)

We do sell colored ones, but they're pretty rare and expensive for any of the colors except yellow, brown, and black. It used to be that colored diamonds were considered "flawed", but in recent years, the less common colors have really taken off in popularity, to the point where they're often several times the price of an equivalent white diamond for vivid, popular colors like pink.

You'd probably have to look into color-enhanced stones, which is where they take yellowish-brown natural diamonds and treat them with lasers and high temperatures to make them nicer colors like blue and green. A lot of diamond sellers don't sell them unless you ask for them specifically though, because it's considered dishonest, since they don't have as much resale value.

HOW DO YOU SLEEP AT NIGHT?!?!?!?

I prefer on my side with a body pillow although on my back seems to give me a better nights sleep. I guess do you choose the position you fall asleep quickest in or the position you feel like you get the best sleep?

On a thin mattress in a fifth-floor walkup in the Dominican part of upper Manhattan. :)

Can a person actually save himself some money buy purchasing a diamond from a guy like yourself (hint hint) and then going to a trusted jeweler of your choice to pick out a mount and have the diamond set there? Awesome AMA too Thanks sooo much for doing this!!

Yes. That's been what most of our customers did at first, until we got to the point where we were able to post renderings of our CAD files online.

How does it feel to be a modern day slave driver?

Did you read anything I wrote? Here's an article about the diamond industry in Botswana, if you want to know how the diamond industry actually works:

http://www.gia.edu/gems-gemology/summer-2014-weldon-botswana-scintillating-moment