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The Case Of The Missing Diamond & The Problem With Buying Diamonds From A "Drop Shipper".
We have blogged here and elswhere many times in the past, regarding the perils of purchasing a loose diamond from an internet store who does not physically own or view the diamond in person before you receive it.
Diamond "drop-shipping", is where an internet website selling diamonds, showcases many thousands of diamonds they do not own or have in their physical possession.
The diamonds are comprised from lists of wholesale diamond databases supplied to these vendors by the respective manufacturers who do not deal directly with the public.
When a diamond is sold via the website, the stone is shipped out directly from the manufacturer to the customer, without passing through the hands of the middleman (drop-shipper) first.
I have previously pointed out why buying diamonds this way (to the tune of thousands of dollars) is a recipe for absolute disaster, since the diamond vendor is clueless about the quality of the diamond he has never seen and cannot possibly vouch for the stone in confidence, based upon the limited info. (diamond grading report) provided to him by the manufacturer.
Certainly, if you wish to know actual details regarding the look, brilliancy, inclusions, etc. of the diamond, you are literally on your own.
Indeed, there are only a handful of companies selling diamonds on the internet, who actually have the ability and inclination to personally inspect every single diamond they sell, even when it is one outside of their own manufacture.
Well, here is another reason to be careful when purchasing a loose diamond from a website that acts as a middleman to sell a diamond they have never seen.
The case of the missing diamond.
A very upset customer posted today on the popular diamond discussion forum, Pricescope, regarding her experience with a diamond "drop shipper" who was supposed to ship two diamonds (which she paid for) but only sent one!
She writes: " remember my thread about me buying my 2 stones from BlueNile from my Blue Amex. Anyway got the package today and it only contain one stone but 2 cert. from GIA. I call their customer service and hopefully they will call me back soon . Okay , i'm freaking out and piss at the service don't they check before shipping it out? We talking about diamonds for god sake. "
Well, unfortunately, the answer is no, they do not "check" before they ship out, simply because they do not do the shipping. In fact, they never saw the diamonds which were not of their own manufacture and were never in their physical possession in the first place.
Sure enough, she posts a bit later with the following update:
"Got a call from Mike at Blue Nile after i call them to follow up, he told me to look everywhere in the box, vendor said it might be pack in a little plastic bag or sometime wrap up in a piece of paper or bubble wraps. I told him my package have no bubbles wrap no little plastic bag or piece of paper, i also told him that i only get one plastic pouch that the GIA cert. supposed to come with. So he ask me to wait and will get back in 1 hr or so.
Bingo!
Blue Nile proceeded to call the wholesaler (who actually shipped the diamond (s) to the customer) in order to find out what happened to the missing stone. Wholesaler responds by saying they are pretty sure the second diamond was included in the package and asks Blue Nile to request that the customer "look a bit harder".
Customer is confident that only one diamond was shipped and no other.
Major Problem!
Now the reality is that mistakes do happen and Blue Nile is a reputable company. Hopefully, they will get to the bottom of this and make sure the customer gets the second diamond she paid for.
However, the bigger problem (and one that the customer was clearly unaware of, by the way she posted..) is that Blue Nile never actually inspected the two diamonds they sold this woman.
They therefore had no way of discussing the quality or beauty of the diamond with any authority.
Obviously, they also have no idea how many diamonds were actually shipped with the package.
Sure, they offer return polices and are backed by an honest reputation. However, it is still important for customers to be informed and aware of the way they are purchasing diamonds over the Internet.
To be clear, many loose diamonds are sold over the Internet every single day by honest and reputable companies who never get to see the stone. These companies offer return polices and customer service guarantees which are designed to foster trust and quality assurance. Additionally, there is nothing inherently wrong with acting as a middleman to sell wholesale diamonds at a profit. This is called capitalism; everyone does it and many of these companies are completely honest and reputable.
Still, it is important to realize that Diamonds are not all created equal.
It is important and crucial to inspect a diamond for its structural integrity, cut precision, quality and beauty/light performance, before making a purchase of this magnitude.
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Comments
Actually there was no mistake, the lady found the diamond back in the package.
You just want people to buy directly from you, but fear is not what will show them the way to you. Let's be honest Blue Nile is just a company like Ebay. A good tool for many resellers. I also prefer to grow my own name.
Keep up the good postings.
Posted by: Danny Diamonds on August 8, 2007 3:58 AM
This type of thing isn't new. A couple of months ago we ordered a stone from a wholesaler only to be told that they had lost it. Yes, that's right, they thought they had it, but couldn't physically locate it.
Just last Friday we got a stone from a wholesaler. The cert and the packet both said 0.51ct, with a 41.0 pavilion angle and 34.5 crown angle. One look at it with an Ideal-Scope revealed that was not the case. On the scale it said 0.53ct and the Megascope said something like 41.6 pavilion angle and 36 degree crown angle.
At the end of the day, it's checking these things will add a lot of value to the end product and prevents a lot of pain when things do go wrong.
Posted by: Nikhil Jogia on August 8, 2007 7:34 AM
Danny, Nikhil,
Thanks for your comments and perspectives.
Danny,
I respect your point even as I believe you failed to see my own.
I think I made it very clear that mistakes do happen, that Blue Nile is a reputable company, and my hope for a positive outcome to the story. I also went out of the way to indicate that most reputable Internet companies do sell diamonds this way and will offer return polices designed to protect the customer.
However, the fact that she subsequently found the diamond in the package does not negate or diminish the veracity of my points (or Nikhil's for that matter).
The fact is, buying expensive and nuanced diamonds from a middleman who never sees the stone, not only places an extra layer of confusion, obfuscation and potential "buck passing" when a problem arises, it also means that you cannot be confident in the quality of a diamond the seller has never seen.
This was my point and not to attack Blue Nile.
These points stand on their own merits, period.
As far as any perceived "agenda" and your stated desire to "grow your own name"...
...in fairness..and only because you brought it up....
..I have duly noted your prominent feature of Blue Nile on your own diamond information website as one of your select few "preferred diamond dealers" with a direct link to their website.
Undoubtedly, this ad/link for Blue Nile, nets you a nice commission every time a sale is consummated on their website by a customer who was tracked (via cookies) entering their website via your own website...
Seems to me that you are the one with the "horse, in this race". ;-) ;-) ;-);-)
Regards and thanks for reading and contributing!
Your comments are always welcome.
Posted by: Judah on August 8, 2007 11:00 AM
Judah
I like your respond to Danny, short and to the point. Now regarding Bluenile this is one company that makes sure to be on top of there wholesales to the last detail, they have there suppliers check every diamond plus make sure to ship the stones with the cert., As you can see this lady found her second diamond. I know there are our biggest competition but we need to give them credit when its due.
Posted by: Moshe on August 8, 2007 12:12 PM
Moshe,
...Credit was given.
Posted by: judah on August 8, 2007 12:34 PM
The point here is not the missing diamond. As Judah has said mistakes happen, stone was found, end of problem.
The point is really the added oppourtunity for problem. If the seller is not the sender, nor has even held the stone, then who has? Another dealer, the dealer's shipping clerk, the dealer's secretary, who?
To whom should the customer address her questions? Is the buyer buying with confidence that all has been answered or are they buying the best price according to a piece of paper?
We have allowed diamonds to be turned into a commodity. If all you want to sell is paper, why not become a stock broker? A diamond and the jewelry it is set in, really is wearable art.
When we allow the human factor to be removed from the equation, when the ability to personally describe the stone to the customer is removed, then it is just price. We will be left with a race to the bottom as everyone starts cutting price.
Larry Horowitz
www.gersonandhorowitz.com
Posted by: Larry Horowitz on August 8, 2007 2:18 PM
Larry,
Excellent points.
"Prostituted" diamonds, or as my Dad says, "virtual diamonds (VD)", where the vendor is simply hawking paper, is a recipe for disaster in more ways than one.
Unfortunately, this is one area where the Internet diamond stores who typically sell diamonds this way, need to catch up with the traditional jewelry stores who never would.
Can you picture a couple walking into an upscale jewelry store and buying an expensive diamond which neither they, nor the jeweler has/have ever seen (or ever will..)??
No pictures, no information; nothing but a copy of the certificate and a promise to "have the stone shipped" (from the wholesaler directly..shh...don't tell..)??
Highly unlikely. Preposterous, yes?
What about the diamond itself? Where are the inclusions? How does the stone face up? Are the inclusions detrimental to the stone? Is the diamond eye-clean? Can the inclusions be covered by a prong? Is the stone white? Is it brilliant? How does it compare with a comparable diamond?
Seller cannot answer any of these questions, simply because he never sees the diamond.
This is why I am unimpressed and frankly don't give a damn when I see some of my colleagues on the Internet featuring 50,000, 60,000 70,000, 100,000, 150,000 loose diamonds for sale.
They get so caught up with promoting themselves and patting themselves on the back for all the gazzillions of diamonds they offer for sale, that somehow the salient and crucial fact that they do not own, possess, or ever see/inspect any of these diamonds gets lost in translation.
Customers never realize that they might be purchasing a diamond from a middleman who operates a diamond website out of his basement somewhere in ---- and is having the stone shipped to the customer directly from the wholesaler located thousands of miles away.
Anybody can open a website, set up an account with every diamond wholesaler on the planet and comfortably sell virtual diamond lists out of his pajamas from a laptop computer.
Some reputable companies will do this on a larger scale with better infrastructure, a sales staff and from a nice office suite. Many, also offer comprehensive polices that are friendly to the customer; as I mentioned previously.
However, how many of these companies are actually backed by knowledgeable diamond experts, professionals and manufacturers, who own their own inventory and commit themselves to inspecting and personally evaluating each and every diamond (not of their own manufacture) which they offer for sale and prior to the sale??
The answer is very few and maybe only a handful of companies who sell diamonds on the net.
IMO, this approach to customer service and diamond selling, adds much more real/tangible value to the consumer shopping experience, than featuring a database of a billion virtual diamond listings....
Posted by: Judah Gutwein on August 8, 2007 3:15 PM
Hi Judah,
First of all I love your postings, they're logical and right to the point. I'm also looking for a diamond ring and am seriously considering buying from Blue Nile. Your posting sure has shed some much needed light into how companies like Blue Nile work.
I've been wondering how reliable their (eg Blue Nile) diamond certificates are?
Keep up the good work.
Posted by: Anya Shen on August 8, 2007 6:45 PM
Anya;
The GIA and AGS lab reports posted on the Blue Nile website are provided to them directly by the Manufacturer/Wholesalers.
You can check the veracity of the GIA reports by going to the GIA website (gia.edu) and typing in the GIA Report number (found vertically on the upper left hand margin of the Report)in the appropriate area provided by GIA. The GIA lab report data will appear and you can match that up against the numbers listed on the Blue Nile website.
AGS, I believe, provides a similar service.
I'm sure that BN being the reputable company that they are, checks this out.
As far as whether you should purchase from BN, it is is really a matter of your comfort level knowing that they provide no information or performance data on their listed diamonds beyond the scanned lab report given to them by the manufacturer. Insofar as their listed categories of "Signature" diamonds, it is really their own in-house definition backed up by no data at all.
As Larry mentions above, this is commoditizing and de-valuing the intrinsic beauty of diamonds to the Nth degree.
Gabi Towlkowsky, one of the World's greatest Diamond Cutters, remarked at a recent GIA Symposium that every rough diamond is infinite beauty waiting to be unleashed and brought forth into the world by the skills and the empathy of the diamond cutter. The maximizing of a diamonds light refraction to your eye critically depends on the Cutter polishing the facets to the correct angle, size, and alignment.
Whether or not he has succeeded can not be gleaned just by looking at the lab grading report.
Posted by: Barry G. on August 8, 2007 10:51 PM