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How are Diamond Prices Calculated?
Diamonds are valued on a per carat basis. Carat is a standard measurement unit for weight of diamonds. Just, like kilograms or ounces for gold, the term “carat” Ct is used for diamonds. 1-carat diamond weight equal to 200 milligrams.
Diamonds price is always calculated on a per carat basis, whether you buy 0.32 carat, 1.27 CT, or 3.04-carat diamond. Let do some math to make it easy. For example,
Formula: Diamond Cost = Carat Weight * Price Per Carat
Price for 0.32 carat is 850$ per carat, 1.27 carat is 1800$ per carat & price for 3.04 carat is 4100$ per carat which means :
A ) 0.32 * 850 = 272$ Total for 0.32 ct
B) 1.27 * 1800 = 2286$ Total for 1.27 ct
C ) 3.04 * 4100 = 12464$ Total for 3.04 ct
But all the major online diamond vendors display the total price, so you don’t have to do math all the time. If you buying a diamond from diamond manufacturers, prices are quoted per carat basis. So, make sure with a salesperson before taking any further decision.
Who set these “Price Per Carat” values?
Most of you might be wondering, from where do these price per carat numbers come from? Well, there are two major organizations named RAPAPORT & IDEX. They set the price per carat from 0.01 to 10.00ct for D-to-N color and FL-to-I2 clarity. However, the RAPAPORT diamond price list (RAP List) is most commonly used in all major countries. For diamond shapes like princess, oval, heart, etc. Rapaport releases a common price list for all fancy shapes and another list for round-shaped diamonds.
Before, the Rapaport price list was only available to trade members. But, now you can buy one at 50$ from the Rapaport website. These price lists are updated weekly based on demand, supply & other factors. Don’t worry to buy a new price list every week as there are very few % changes or no changes. Or you can even simply comment below your diamond’s carat weight, color, clarity & shape. We don’t mind sharing the latest diamond price as per the RAPAPORT price list.
How To Read Diamond Price List?
So, above we have a sample copy of the Rapaport Price List. Let us learn how to read it. For eg, You have to check the price for 1.01 carat, H color, VS2 clarity stone. To know the diamond price you need to know 3 things. Weight, Color, & Clarity of diamond.
As you can see on the above price list image there are different values for every diamond. Here we have 4 different carat weight segments which further can be read in a matrix. So, For 1.01 carat, we have to look at the 1.00-1.49 ct price segment. Then, check color & clarity verticality and horizontally within the matrix.
All the values are in the hundreds. So the price for 1.01 H VS2 is 6300 USD per carat. This is an old price list just used for reference and example. The price per carat for 1.01 H VS2 is 7600 $ ar per the Latest RAPAPORT price list
These are not standard prices for the diamond, It’s just a base price list.
Rapaport price is the base price on which diamond dealers provide more discounts or ask premium depending on the diamonds. This makes diamond dealers compete with each other.
What is Back/Discount & Premium from Rapaport Diamond Pricelist?
A) Discount – Percentage of the discount applied to Rapaport base price. Term Discount, Back, Below, and Less all are the same & commonly used in trade.
B) Premium – Percentage of addition in price from Rapaport base price. This means X% addition to the list price. This happens in very fewer cases.
Example For Discount – 1.01 H Vs2 3EX ( excellent cut, excellent symmetry, excellent polish) with NONE fluorescence is available at a 34% discount. It’s similar to “15% off at Nike Shoes”. Let’s do some math and make it more simple.
RAPAPORT PRICE – % Discount = Price Per Carat * Diamond Carat weight = Total Price
6300$ – 34% = 4158$ per carat price * 1.01 Carat weight = 4199.58 Total price
In case of premium, you have to add % to the Rapaport base price and multiply with carat weight for the total value. (opposite of discount, you have to pay more than list price)
One diamond dealer might provide 1.01 H Vs2 cheap at a 40% discount and others might provide at a 32% discount.
Understanding Diamond Price & Find Real Value.
Pricing simply does not rely on the diamond’s colour, clarity, and carat. There are a lot of other factors that determine a diamond’s value. Like, you can even buy GIA 0.50 ct I SI1 at a 45% discount (cheapest) or another similar stone at a 35% discount (expensive)
What makes such a huge difference in pricing with similar certified diamonds?
Factors like diamond fluorescence, diamond cut, symmetry, polish, etc affect most. Another major factor that affects the diamond price is its “CLARITY”. A VS2 diamond with centre black crystal will be cheaper and a VS2 diamond with eye-clean will cost more. Let’s see the below example screenshot from James Allen. How price changes despite all other things ( fluorescence, cut, polish, symmetry) remain the same. It’s due to NICE VS2 and BAD VS2 in simple words.
This might shock you, but many people are paying more for BAD VS2 kind of diamonds. The above example shows how there is a 700 US dollar difference between 2 diamonds while other things remained the same on diamond certificates.
I always recommend you to sell GIA or EGL certified diamonds. Just in case if you are selling a loose diamond without any certificate, Then appraising a non-certified loose diamond on the base of the RAPAPORT price li