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Wholesale Diamonds Fact!
What are "wholesale diamonds" and what are NOT.

There are a number of wholesale markets on the Internet. The two largest ones are RapNet at www.diamonds.net and Polygon at www.polygon.net, plus many genuine wholesale web sites. All of these sell to the trade only, not to the public.

Wholesale diamond values are tabulated by carat weight, color and clarity grade in the Rapaport Diamond Report. However, all but rare wholesale diamonds are sold to the trade at up to as much as 70% below their list wholesale value. This is known as "% back of Rap" by the trade, and this % figure is listed for each diamond on the wholesale diamonds market.

But some online retail merchants justify calling a 40% diamond markup, that was bought at 50% back of Rap, "Wholesale" or even "Below Wholesale". It would be more accurate to call it "Below (Rapaport) List Wholesale", and it is actually a Retail, not wholesale price.

Retail diamond markup varies widely. The fancier jewelry stores mark up their diamonds three times (3X) the wholesale cost to cover their heavy overhead. Many department stores commonly mark up diamonds and jewelry 3X and then promote a "50% off" sale.

The markup of Clarity Enhanced diamonds, where the visible black carbon bits have been removed with a laser drill, might go like this. Take a $600 1ct H color I2 clarity diamond, convert it to a SI1 clarity with no visible inclusions and a Rapaport list wholesale value of $5500, advertize it for $3900 "Below Wholesale" (29% back of Rap), ship it to a retail jeweler in your area to view and close the sale. Then split the $3300 markup (less enhancement and advertizing cost) with the retailer. However, we sell this same type, size and grade of diamond about $1000 cheaper, because we don't have to split our markup.