By Julia Griffith FGA DGA EG
Founder & Course Creator
THE GEM ACADEMY
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Laboratory-grown diamonds (LGDs) are often quoted as being 30% cheaper than their natural counterparts. This was certainly true in 2018. Let's find out if this is still the case.
A bit of history:
Laboratory-grown diamonds (also known as synthetic diamonds) were priced at an average of -16% compared to their natural counterparts at the beginning of 2016. This reduced to approximately -29% in early 2016 before a steep increase to -40% by mid-2018 (Paul Zimnisky, 2018).
Graph by © Paul Zimniksy, 2018
Huge surges in awareness, advertising and production volume have occurred since this time. As their popularity and production continues to increase – this gap in retail price is widening. Let’s have a look at the value of laboratory-grown diamonds today.
The following prices are based on retail prices taken from two online diamond retailers; James Allen and Brilliant Earth. The prices are a median average of prices available for each size to the following criteria: Round brilliant cut, Ideal/Excellent cut quality, G colour, VS1 clarity with none-faint fluorescence. These prices were obtained online on June 2nd 2021.
Based on the above figures, you can see the average price difference of LGDs compared with natural diamond is now much greater than 30%. Let's see this in graph form...
If we take all weights into consideration, the average difference in retail price for laboratory-grown diamonds is -66% compared with natural diamonds. An interesting trend that I noticed whilst looking at the average prices for these stones is that there is generally a smaller difference in price for smaller laboratory-grown diamonds (0.50-0.80ct), which was as low as 55% in some individual cases.
There are a few variables to consider if we were to assess the market at large. Key to the comparison of price is the source of information. For example, if I was to compare the cheapest available LGD to the most expensive available natural comparable - the price difference would be much greater, and visa versa for comparing more expensive LGDs to lower priced natural comparables. I obtained the median average of all diamonds available in each category in attempt to minimise this variable in this study.
Another variable may be differences between retailers, as they may have different markups, pricing structures and overheads. This research reflects many stones across two online jewellery stores, which sell goods at a relatively cheaper prices than brick-and-mortar stores. Despite these difference, the results in this study should reflect the industry at large as the price differences are relative.
One brand that does have a different pricing structure to all others is Lightbox (by DeBeers), whose stones are priced up to -80% cheaper than comparable natural diamonds. It is key to note that Lightbox do not supply laboratory-grown diamond reports with their stones and sell a minimum range of qualities equivalent to; near colourless, VS clarity with a "very good" cut quality. This approach contributes to their lower price-points, which is a set per carat (p/ct) price of $800p/ct.
You may wonder how strictly I adhered set criteria (G, VS1, Ideal, None-faint fluorescence). I stuck to the size and quality exactly as stated and the prices reflect the exact weight as stated (eg. 1.00ct). It is interesting to note that such stones, especially those of natural origin, often are slightly lower in price compared with a stone of 1.02ct (Why? In the instance a 1ct stone is chipped - it likely results in a 0.99ct stone which DRASTICALLY affects its price). This could be considered another variable as many buyers would prefer a stone just over a key carat weight.
Are there bigger differences for price higher quality stones? Let's find out.
The following prices are based on retail prices taken from two online diamond retailers; James Allen and Brilliant Earth. The prices are a median average of prices available for each size to the following criteria: Round brilliant cut, Ideal/Excellent cut quality, D colour, VVS2 clarity with none-faint fluorescence.
As you can see from the above table, there is a greater difference in price when it comes to larger, higher quality stones. This reason for this could be two-fold. Firstly, natural large, high-quality diamonds are very rare and, so, carry a premium price. Also, the price of laboratory-grown diamonds is likely to plateau with larger sizes as, after all, this is a man-made product and needs to be accessible for its customers. Which brings us to a final thought...
Is it right to compare natural and lab-grown diamond prices?
It is important to remember that nobody is "saving" money when buying a laboratory-grown diamond as opposed to a natural diamond as these items are two distinct products. One is a natural, rare product and the other is artificial (meaning man-made), and replicable product. As a result - they have different values. Whilst the current retail price for LGDs gives consumers “more bang for their buck”, it is key to understand that one is paying a fair retail price in return for this product.
As the prices differences are vast, it may be time for laboratory-grown diamonds to stand on their own two feet (LGDs have feet, right?) and to have their prices advertised for what they are - accessible and wallet-friendly. Of course, LGDs can't do anything for themselves as they are inanimate objects and, so, it is up to the jewellery industry at large to make this change.