Myths About Buying Engagement Rings Wholesale
In shopping around jewelry stores in Utah you may have been enticed by dealers claiming to sell “Wholesale to the Public” or people claiming to have wholesale engagement rings cheaper than anyone else in Provo. They usually point to their small offices, meager selection, and budget surroundings as the reason they can sell at “wholesale”, because they have little or no overhead.
The first thing you should know is that it is illegal to advertise “wholesale to the public”. In title 16 of the Code of Federal Regulations, section 233.5 it states:
“Retailers or any entity selling to the end user may not advertise their selling price as a ‘wholesale’ price.”
The Jewelers Vigilance committee, which prosecutes ethical violations in the jewelry industry, has this to say:
“‘Wholesale to the Public’ Can you say that? No. Never. No exceptions. This violates both the Lanham Act (title 15, section 1125 (a)(1)) and the Federal Trade Commission rules.”
So, the first thing you need to realize is that these people represent themselves illegally. If you still feel you can trust them knowing this, then read on!
There are many myths about buying engagement rings wholesale. We have personally examined hundreds of diamonds bought from these little guys in Utah and we’ll tell you what we’ve discovered. You can then decide if these dealers have any merit.
Overhead is only one factor in determining price. Buying power is a much bigger factor. Look at Walmart, which has huge overhead (big stores, lots of employees, etc.) and yet has low prices. Don’t be sucked into this deception and fail to shop around. All you get with low overhead is poor selection, poor service, and poor diamonds. (Wilson Diamonds owns our own building in Provo anyway so we have no rent. This means we actually have lower overhead than they do!)
After re-grading dozens of diamonds bought “wholesale”, we found “wholesalers” are the most blatant misgraders in the industry. This is in fact how they look cheaper- they assign their diamonds better grades than they merit. The “certificates” they tout are not GIA certificates, but off brands not recognized as industry-standards. If you want to prove this to yourself, take this Quote Form to them to confirm their grading. They won’t fill it out and sign it.
“Wholesalers” are like any other retailer. Some charge less than some stores which are high priced, but by and large “wholesalers” have the same or higher prices as most full service stores.
Here’s a typical example of how they look cheaper:
“Wholesaler” shows a low grade diamond and quotes it as a high grade. Buyer takes this high quote, accepts it as accurate, and asks legitimate stores to match the price.Legitimate stores use an accurate and complete grade that matches the “wholesaler’s” quoted grade, but is in fact a much higher quality diamond. Consequently, the store’s quote looks higher priced.Buyer thinks he’s found a deal with the “wholesaler” when in fact all he’s found is a poor diamond quoted as excellent.Buyer unknowingly buys a poor diamond from the “wholesaler” and doesn’t find out until later when he notices the diamond doesn’t shine very brightly compared to other diamonds.Buyer gets a second opinion from a gemologist and discovers the scam. “Wholesaler” refuses to take it back or replace with the correct grade.We have seen this exact scenario happen many, many, many times over the years, but we have never in 36 years seen a verified price that beat Wilson Diamonds unaltered price. Never. (To avoid this pitfall, see How to Price a Diamond )
“Cheaper” is the operative word here. We have seen hundreds of people disappointed at the quality and style results of copied rings. Don’t do this! If you want to expose their lack of confidence regarding the finished product, ask them to sign this custom ring form before you begin. If they won’t sign, don’t you sign!
Most stores give substantial discounts when you buy both the ring and diamond, which will destroy any apparent savings from a “wholesaler”. Wilson Diamonds matches prices anyway, and gives a lowest price guarantee with every diamond we sell. Buying them separate will also create warranty problems down the road.
This is not true. Think about it. Wilson Diamonds has been in business 36 years, before many of these wholesalers were born. Would we be buying diamonds from someone across town that came into business just a few years ago? This is ludicrous.
“Wholesalers” are in fact the ones buying from the middleman! This is because their lack of buying power and lack of credit prohibit them access to prime sources.
We at Wilson Diamonds hope this information has been helpful. We want your diamond and ring to be everything you planned, including getting the best price.