It is often said, in jewellery circles, that if you go shopping and you chance upon some diamonds necklaces being sold very cheaply, you need to raise your ‘authenticity antennae.’ This is in recognition of the fact that genuine diamonds necklaces are not expected to come cheap, so that if people see you selling such items at ‘truly low prices’ they are likely to become suspicious, rather than rushing to take advantage of the ‘offer’ as would probably be the case with other types of products.
So why are diamonds necklaces expected to cost that much?
Well, the reasons as to why diamonds necklaces are expected to cost a lot can be as falling into two categories, namely the objective reasons that have to do with the diamond necklaces (and precisely the material they are made from), and subjective reasons that have to do with the reputation of diamonds necklaces.
Taking the objective reasons as to why diamonds necklaces cost what they do, it is an undeniable fact that, for starters, diamond is a rare mineral, present in very few places on the world – and this scarcity makes it a rather dear material. After all, useful resources that also happen to become scarce are likely to see their prices hike, and this is a basic fact of life about which nobody can really do anything.
Rarity aside, it is worth mentioning that even in the few sites where diamond is to be found in the world, getting to mine it is usually quite a tricky idea (as very deep mines, typically running into thousands of meters below the ground have to be dug to reach the diamond). Now to get guys to go into these types of mines, you have to motivate them with good sums of money, because coming out after going in is not always guaranteed! It is a huge risk they are taking for you, in going there. And once the diamond is gotten, it cannot typically be used in its ‘raw’ form, meaning that it has to undergo some processing, again at not very small cost. With most mining products, refinery would be the last major cost component that goes into determining what they are ultimately sold for. In the case of diamond, however, other post-processing issues, things like the transportation and storage of the diamonds necklaces ultimately made out of it, all add to making them quite expensive. This is because items like these diamonds necklaces are ‘high risk’ items, particularly prone to theft, which means that they can’t be stored ‘anyhow.’ They have to be transported and stored under top security – and all this adds to what they are ultimately sold at.
Turning to the subjective factors that account for what diamonds necklaces cost what they do, we would be looking at things like the fact that one of the benefits that people purchase the diamonds necklaces in search of is exclusivity (which basically means having something that not everyone has) –and this can only be obtained if the diamonds necklaces are sold at higher prices. So we have a situation where even if someone was to discover a way of making diamonds synthetically at a much lower cost, the necklaces diamonds would still have to be sold at hiked prices to main the ‘exclusivity’ – also called prestige.
