Role of Diamond Wholesalers in Diamond Trading

Diamonds go through the hands of many wholesale traders before reaching the retail outlets, for me and you to buy it. Hence diamond wholesalers marketing largely influences the price, quality and quantity of retail diamonds that reach the international markets.

Though diamond traders play an important role in diamond trading they are largely controlled by diamond exchanges. Since diamond exchanges are large and powerful, they enjoy a monopoly in the diamond industry.

The main reason for this monopoly is that only a few wholesale dealers are allowed to buy loose diamonds from the exchange and that too under many unprofitable norms and conditions.

These wholesalers are also referred as “sight-holders”. They have to buy the packet of loose wholesale diamond the way it is and enjoy no freedom of quality and price negotiation.

The work of popularization of diamond jewelry is also undertaken by them. In fact, wholesale dealers who are unable to increase their markets substantially loose the rights of sight holding very quickly.

Wholesale diamond jewelry is distributed sometimes by companies as well, but actually they also get the loose diamonds for processing from the wholesale dealers. Wholesale dealers hence perform a very important task of diamond popularization and hence they help to boost up the diamond trading industry.

The price of the wholesale diamond jewelry largely depends on the length of the supply chain. It means that the more number of wholesale traders involved in the whole process, beginning from the diamond exchange and ending in the retail outlet, the higher will be the retail price of the diamond jewelry.

The very same factor also influences the quality of the product as well. A long supply chain means a thorough processing of the jewel. It will yield better finished products when compared to the ones that are produced by processing in a hasty manner.

Hence a good balance is moreover maintained between the price and the quality of the product. It is not that you end up paying a large amount for a hurriedly finished product.

All the credit for this balance must go to the wholesale dealers who through their price and quality negotiating tactics regulate the diamond market. A lot of variation can be easily seen between the situations of wholesale traders in various countries.

In countries like Israel and USA, which have their own diamond exchanges, the position of the traders is better. They get more freedom in buying wholesale loose diamond.

Most exchanges tend to offer special privileges to the traders of their own country. This hence leads to an uneven regulation of markets. This clearly reflects on the importance of wholesale traders in regulating the diamond markets. Wholesale diamond trading is developing day by day and it is leading to an increased popularization of the diamond industry.