How to Buy Large Volumes of Diamonds Without Disrupting the Market

Posted by:
June 14, 2023

Diamonds follow somewhat of reverse economies of scale. Unlike other industries where you get a volume discount when you buy in bulk, in diamonds, when you buy a large quantity of a similar category of diamonds, you will end up paying more than if you try to buy just one. This is because there is a limited supply in each category of diamonds, and buying in bulk ends up moving the market. This results in affecting the margins of jewelry retailers and manufacturers that are marketing a certain quality of diamonds.

In this blog, we take a detailed look at how the data-driven diamond-sourcing platform Liquid Diamonds has developed innovative solutions to this uncertainty. We also explore the platform’s unique features and capabilities that can resolve the issues of sourcing diamonds and enable jewelry businesses and retailers to purchase raw materials fast, reliably, and securely without impacting the market.

Sourcing Diamonds: The Key Problems 

The jewelry market often faces several unique problems, the solutions of which were not readily available until now. Some of these significant problems include:

1.  Access to only a few suppliers

Most jewelry manufacturing, retail, and diamond wholesalers only engage in business with a few trusted suppliers, as trust plays a significant part in the diamond industry. Purchasing from unknown and untrustworthy suppliers may result in a very risky transaction in terms of both genuineness of diamonds and the settlement of payment and delivery. 

Therefore, they rarely buy from the broader market because dealing with multiple smaller suppliers is tedious and complicated. 

2. Spiking prices

Suddenly purchasing or sourcing diamonds in bulk from a few suppliers, as most businesses traditionally do, can often raise prices sharply and adversely affect margins. Therefore, buyers must be wary of the constant risk of spiking prices during their purchases. 

When someone is looking to buy a large quantity of the same category of diamond, this will result in a spike in the price of this particular category of diamond. Therefore, buyers try to spread their purchases over a long period and hence cannot fulfill an order quickly without spiking prices.

3. Upfront capital

Further, small to medium-sized diamond businesses may not have the cash required to make a large downpayment at the time of purchase compared to large corporations. This makes it difficult to avail of volume discounts.

Additionally, Small to medium-sized diamond businesses often don't have access to finance from lending institutions. Consequently, they are limited to financing by the limited set of suppliers with whom they have built relationships and that too at higher rates and lower credit.

Due to these rigid payment options, they often have to wait until they sell a large amount of stock to collect cash to buy, disrupting the smooth flow of sourcing diamonds.  

4. Deadstock

Lastly, to avail of the bulk discounts, diamond businesses often have to buy stones, they may not even need. They may also be required to buy their inventory in a single go. This often leads to being saddled with unsold inventory or dead stock, which hampers revenue. 

Buyers have faced these persisting issues for years. And have long been looking for options that enable them to source bulk diamonds without these issues and without disrupting the market. 

Revolutionizing Diamond Sourcing: Liquid Diamonds' Proven Expertise

In the domain of diamond sourcing, challenges such as limited access to suppliers and market disruptions have consistently plagued buyers. To solve this, as a trusted co-pilot for diamond sourcing, Liquid Diamonds makes it easier to buy diamonds in bulk, regardless of the order size, without the endless hassles of negotiations with sellers. 

Let's dive into how Liquid Diamonds has successfully tackled these challenges and empowered businesses to source diamonds at scale in the past.

Case in point: Preserving Margins, Sourcing Brilliance with our Reverse Auction for a leading jewelry manufacturer

When it comes to sourcing diamonds in large quantities without disrupting the market, let’s take a real-life example of Liquid Diamonds’ capability.

Our platform successfully assisted a leading US-based jewelry manufacturer where in sourcing a substantial quantity of diamonds for a bridal program order with the following solutions:

1. Patented Reverse Auction

The patented Reverse Auction system allows the Liquid Diamonds platform to bring together hundreds of verified smaller and medium-sized diamond suppliers to bid their best prices and fulfill buyers’ orders in bulk. 

As a result, the jewelry manufacturer could purchase large volumes of diamonds to fulfill their orders at competitive prices while protecting their margins and increasing GMROI.

Moreover, Liquid Diamonds puts all verified diamond suppliers into open competition without revealing details of the buyer. Hence, sellers don’t know whether the demand comes in from single or multiple buyers. Therefore, it doesn't disrupt the market as it would have if a large jewelry retailer or manufacturer had directly procured from the market.

Reverse Auctions can also help buyers to-

  • Get the best and fairest wholesale prices.
  • Access the long tail of supply- more suppliers to choose from.
  • Derisk their dependency on a handful of suppliers.

2. Spreading the Purchase Over a Period of Time

By strategically timing the acquisition, they ensure that market fluctuations and potential disruptions are mitigated, allowing the diamond buyer to maintain stable margins and optimize their investment. 

3. Get First Dibs on Stones

The remarkable matching engine seamlessly connects buyers with recently listed diamonds from suppliers' inventory. By leveraging this technology, bid notifications are promptly dispatched, allowing you to access these stones before they become available to the broader market. 

A Hassle-free, Modern Approach to Sourcing Diamonds in Bulk

Liquid Diamonds leverages real-time data and cutting-edge technology to empower buyers to source the diamonds they want at the right time and the right price. 

We aim to bring price transparency and liquidity to the diamond industry, enabling our clients to buy quickly and easily at fair market value and allowing suppliers to liquidate their inventory instantly.

Here are a few of our key offerings that can help you buy diamonds in bulk:

1. Single window for shipment and returns

We consolidate the stones from multiple suppliers into a single shipment and provide a one-stop shop for payment, delivery, and returns (in rare cases, our clients are not satisfied with the stones they have received).

2. Data-driven solutions 

We offer solutions backed by market trends and internal company data that eliminate blind spots and detect new opportunities in the broader market and find better value for bulk deals. Consequently, the buyers replenish their stock with only the best stones from trusted suppliers’ inventories.

3. Third-party quality checkers

We employ a team of trusted third-party quality checkers to examine the stones. This guarantees our buyers only get the highest quality stones, with no room for mechanical errors.

Final Note

In conclusion, the process of sourcing bulk diamonds can be a tedious, expensive, and risky undertaking. However, buyers can acquire diamonds at wholesale prices without disrupting the market with Liquid Diamonds.

Our AI-powered, data-driven solution allows our clients access to a long tail of supply, obtaining the best prices and highest quality stones and protecting the margins of diamond buyers. 

Most importantly, buyers can finally say goodbye to the hassle of dealing with multiple suppliers. Overall, this technology offers a seamless and efficient solution for those buying large volumes of diamonds.

Look no further if you want to source diamonds in bulk and reap the benefits of buying wholesale with zero hassle. 

Stay ahead of the curve and seize the opportunity to secure your desired diamonds through our innovative platform. Say farewell to missed chances and embrace a new era of diamond selection.

Get in touch with us today!