Friday, 15 August 2014

How To Buy a Diamond Ring (Part 3)

If you are looking to buy a diamond engagement ring for your girlfriend it is probably best to start with Part 1 of 'How to Buy a Diamond Ring' guide which covered Knowing your Girlfriend and Setting and Sticking to your budget.  Part 2 covered the 4-C's of buying a diamond and the research you should do before going into a jeweller.

In this part of the guide (Part 3) I will be covering:

  • Finding a diamond jeweller or a jewellery store
  • How many should you visit and what should you say?
  • How to negotiate the price of the ring down
I should address one point upfront.  I do not cover how to buy a diamond ring online in this guide.  I didn't go through that process myself.  I thought about it however preferred to examine the ring and the diamond myself my before buying it and you can only do this at a physical jewellery shop.

Step 5: Finding a Diamond Jeweller

When you decide you have done enough research and actually want to get out there and actually buy the diamond you will realise that every jewellery store you can think of sells engagement rings.  So which ones should you go to?

A. Get recommendations from friends (or online)

I highly recommend getting recommendations from friends.  Ask them where they went, what their experience was, how helpful the person that served them was and whether they seemed to know about diamonds.

Most guys that have gone through the same process you are have done heaps of research and are more than happy to help you in your search.

If you are the first one getting engaged go online.  I found that diamond jewellers are the one type of store that people are happy to post both positive and negative comments about online (unlike most other stores where there is an inherent bias).

B. Visit several stores...

Never just visit one store.  Diamonds are different, as are the settings and stock that different stores have.  Just because one store doesn't have what you are looking for doesn't mean another wont.  

Going to multiple stores will also give you a good feel for prices.  Don't be afraid of asking for prices on everything and writing it all down.  It will help you realise what is a good price and what you should be negotiating down.

The benefit of visiting multiple stores cannot be overstated.  For example Tiffany was probably the 6th or 7th store I visited and because I had a good idea of prices I saw pretty quickly that their prices were approximately double for exactly the same piece of jewellery.

Step 6: What should you say when you visit?

A. Make sure they know what they are talking about

After you have a few recommendations you want to walk into the store and make sure the person you are talking to knows what they are talking about.  If you have researched the 4C's it should become pretty obvious whether they know about diamonds or not.  

For example one store I walked into I asked about a few rings and asked what the cut grade was on a ring I was being shown.  The assistant told me that "they don't look at that when pricing their diamonds"...which was a massive red flag.  I made my excuses and left pretty soon.

You will not have a problem in most speciality stores however if you go into a bigger chain you definitely want to suss this out early.

B. When you are first visiting don't be afraid to tell them you know nothing about diamonds

It is ok to admit that you know nothing about diamonds...they generally don't expect you to.  Ask them to show you diamonds of different colours and cuts and clarity.  Ask to see the diamonds under a magnifying glass so all that stuff you researched actually makes sense.

Also ask whether you can look at different settings and stones and sizes.  But make sure you look at the rings on their own.  A better diamond will always look better but you will be surprised how good lower quality diamonds look when they are not next to a higher quality / bigger stone.

At this stage you don't want to tell them your budget.  Say you haven't really decided yet.  You will reveal it later when you are actually negotiating for the ring.  Given that you have looked at diamonds online you should know the kind of size you are looking don't ask to see 1 carat diamonds when you are only going to be buying a 0.5 or 0.6 carat diamond.

C. Tell them what your girlfriend is like and what she wants

Telling them everything you have discovered about her tastes will help them recommend things that will be more suitable for you.  You don't want them to be showing you three stone rings when you really just want a solitaire. 

D. Write EVERYTHING down

Make sure you write everything down including everything you see and like.  You will be visiting a lot of stores and it is easy to forget to take a notepad along and make sure you get all the specifications of the rings you like.

Step 7: How to negotiate when buying a diamond ring

So you have done your research, visited a heap of stores and decided on the ring you want.  Now is the time to actually buy the ring.  And now you need to STOP.  Don't go in and pay the sticker price on that ring.  You can always get the price of the ring down.  Sometimes by a little and often by a lot.  But you need to have a plan for doing so.

This is the case even if the ring is within your budget.  Assume you want to spend $5,000 on a ring and the one you love is only $4,500.  This doesn't mean you shouldn't haggle.  Even if you only get another $500 off this is $500 that could be used for something else.

A. You can always negotiate on a diamond ring

You should never ever pay sticker price for an engagement ring.  The prices are much higher than they need to be because they expect people to negotiate the price of the ring down.  The first thing to remember is that they expect you to negotiate so don't be shy about doing so.

B. Spin the process out a bit

Ask a million questions and get the sales person to invest in the sale they are about to make.  The time they invest will make them more likely to want to close a deal with you.  I spent a good 3 hours (in a couple of sittings) with the sales person I ended up buying my ring from.  I got him to explain everything...multiple times.

C. Ask them whether they can do better

Ask them the price of the ring... and then ask them if they can do better.   The answer will always be 'yes'...but don't accept yet.  This isn't the end of the process.

This is why you don't reveal what your budget is yet.  They will not bring their price down if they know that the price is within your budget.

D. Follow up with "I really didn't want to spend more than X"

How you play this is up to you.  Some people like to go with an amazing deal and then negotiate their way up and others like to actually state a price they think they will end up with and not budge.  You can often get a lower price the former way but I prefer the latter (I know my bargaining style).

In my example above.  Assume the ring costs $4,500 and you ask them whether they can do any better and they come back with "I think we may be able to do it for $4,200" your follow up should be something along the lines of "Look my budget is actually $3,800 and I really didn't want to spend any more than that".  Maybe you'll end up paying $4,000 or perhaps you'll get it for $3,800...either way you've got a significant amount off your starting price.

E. You have to know your prices to be able to negotiate

What price should you pay for a diamond?  The only way to know this is to know what the prices are (both online and in the real world) of the exact diamond you are looking to buy.  This will help you get a good deal while at the same time not trying for something rediculous which will stop the salesperson dealing with you.  It will also mean that you wont start haggling for a $20,000 Tiffany ring that should be priced at $10,000...because they are never going to drop the price by 50%.

Good luck with your diamond buying!

You will rarely spend so much on something you will use so little yourself and hopefully this guide made the whole process that little bit easier.  If you have any questions or want to ask me where and what I did comment below and I'll try and help you out.  

If you have bought a diamond ring and have any advice for people out there looking please also contribute.

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  1. I recently helped a friend from interstate purchase an engagement ring for his now fiance. I have a family jeweler in Sydney who operates on a different mark up structure than most retailers who normally have massive margins!
    After shopping around, his best quote for the ring he wanted came to $26k! We ended up getting his ring made to the same specifications for $8k and he recently obtained an independent insurance valuation of $20k. This shows how highly priced some retailers can be.

    After this experience, we researched wholesale suppliers online and to my surprise was easy to find. There are several wholesalers who sell loose diamonds but also offer ring making services.

    My advice, if going down an online/wholesaler approach, is to ensure the main diamond is certified by either GIA or one of the other major bodies.

    1. Hi Raxi! That's amazing that you got the $26k ring made for $8k. I did look into going down the online / wholesaler approach with the GIA certification but in the end I decided that I really needed to see the diamonds and the ring first.

      I've always found the insurance valuations really curious. I have never heard of one that is even close to the price the person paid (even from the shop front). The insurance valuation for the ring I bought was done by the same guy that sold it to me...for almost double what I paid for it and ~30% higher than the original list price...I really want to get to the bottom of that particular mystery