When shopping for a diamond or an engagement ring, you may wonder: Should I buy online or from a retail store?
Overall, we’ve found that buying diamonds online is far better. Specifically, buying a diamond online is cheaper than buying in a store. Because of the way that wholesalers distribute and sell diamonds, the process is less expensive for online retailers. By shopping online you’ll also have a larger selection of well-cut diamonds.
In this guide, we:
Discuss the best places to buy conflict-free diamonds online
Some people are nervous about buying diamonds online, but there are several reputable vendors that make online ring shopping a safe choice. For example, James Allen and Blue Nile have exceptional imagery that allows you to view every diamond up close before purchase. These vendors also have excellent return policies, so you’re never stuck with a diamond you don’t want.
Wondering how the shipping works? Shipping from these vendors is secure. They include insurance on all of their packages and make sure the box won’t give away what’s inside. You can have your ring shipped to your home address, where a signature is required for drop-off, or have it sent to a FedEx location for safe pickup.
Yes, you can buy a beautiful engagement ring online. In fact, there are countless options — from classic solitaires like this platinum engagement ring to custom designs like this vintage Round Cut in yellow gold.
First, select your stone from loose diamonds like this 1 Carat Princess Cut. Second, choose your setting. Overall, buying an engagement ring online will give you the widest selection and the most competitive prices.
In most cases, engagement rings are 30-40% cheaper online than they are in physical stores. Because of the way diamonds are sold and distributed, diamonds are less expensive for online vendors.
By shopping online, you’ll get a large selection of conflict-free diamonds and beautiful settings at competitive prices. For example, this 1 Carat Cushion Cut engagement ring from James Allen is $6,080. And this 2 Carat micropavé engagement ring from Blue Nile costs $16,566.
When shopping for diamonds online, you should evaluate each stone based on its beauty and the 4 C’s (Cut, Color, Clarity, and Carat).
Here’s a step-by-step guide to help you wade through the online options and end up with a truly stunning stone.
For more tips, check out our 1 Carat Diamond Buying Guide. You can also read about how to find conflict-free diamonds here.
Throughout our many years of experience in the industry, we’ve vetted dozens of vendors across the globe. We know which vendors you can trust and which ones to avoid.
In 1999, Mark Vadon revolutionized the diamond-buying landscape by starting Blue Nile. There were other sites out there, but Blue Nile had a great business model. They were the ones that made buying online mainstream. They created a market with two major advantages.
The major revolutionary concept they have is that they don’t own their diamond inventory. The biggest cost for a diamond store is inventory. And Blue Nile cut that out. With the advent of internet shopping, Blue Nile decided to make deals directly with the manufacturers and wholesalers of loose diamonds. They’re able to list their inventory of well-cut diamonds directly from those suppliers without actually purchasing the diamonds.
This helps both Blue Nile and their suppliers (which in turns helps the consumer). Blue Nile gets to list thousands of conflict-free diamonds in “their” inventory without having to sink any money into it. The wholesalers, in turn, get to make sales with minimal effort and are paid right away.
The second advantage is the low-cost overhead. Blue Nile doesn’t need to pay rent for a nice store. They don’t need to constantly update the furnishings. All they need to pay for is office space and warehouse space (for order fulfillment). This is far cheaper than a nice store. And what about employment costs? A typical store that sells $10 million a year has about 30 employees. That comes out to about $333,000 per employee. Blue Nile sells almost $500 million a year with only 300 employees. So each BN employee accounts for $1.65 million of sales.
What does this all mean to you, the consumer? Fundamentally, Blue Nile can afford to sell the same loose diamonds to you with a much lower markup than a physical store can. Simple as that. Your typical store needs to make 30-50% margins on its products to have a healthy business. Blue Nile is able to sell you a diamond with only 15% margins. That is a significant saving for them — and ultimately: you. Make sure to read our comprehensive review of Blue Nile.
The next revolution that made buying online a better choice was started by James Allen. James Allen is the second largest online retailer. When they rebranded and relaunched in 2005 as James Allen, they introduced a great new feature: photos of each specific diamond.
The biggest flaw in Blue Nile’s business model used to be that you couldn’t see the diamond. As we explain in our Clarity article, it doesn’t matter if a diamond is a VVS1 clarity or SI2 clarity. If the diamond is eye-clean, it’s eye-clean. (Although 90-95% of SI2 diamonds are not eye-clean).
The photographs allow consumers to sift through all the SI2 diamonds out there, for example, and pick the one that is eye-clean. This new business model paired the fundamental advantages of Blue Nile (no inventory and low overhead) with the ability to use your own eyes to pick out your diamond.
Since then, James Allen has continued to hone their technology. They currently have the best 360-degree video technology for viewing loose diamonds. Go check out our full review of James Allen to learn more.
For a full rundown of where to buy well-cut diamonds online, check out the best places to buy an engagement ring. We summarized our reviews so it’s easier to figure out where to buy a ring.
You can also contact us, and our diamond consultants will help you with more personalized advice.
We often receive emails from our readers who are hesitant to buy online, despite the fact that they know it will be cheaper. For that reason, I think it’s important to explain why we understand those concerns, but why we think those concerns are misguided.
We’ve found that far more people get taken advantage of by going into a store than purchasing online. Diamond buying is confusing and, deep down, you may realize that you’ll never know as much as the professionals selling the diamonds.
Many of our readers spend hours pouring over our numerous diamond reviews and diamond education articles. You can learn all the ins and outs of diamond buying. But when you walk into a store, you have to be 100% sure you aren’t forgetting any minor detail (a single quality may seriously impact the value of the diamond). After all, you’re facing off against someone who is more prepared and more incentivized to make sure you walk out of that store with a diamond on their terms.
When you purchase online, you have the advantage of going at your own pace, cross-referencing (with a site like ours) and checking off all the boxes. We’re also able to help with somewhat unbiased opinions. While we usually get paid by the online vendors we recommend, we have no reason to recommend one diamond over the other unless it’s the better choice for you.
The opposite is the case for a retailer. When you walk into a store, the less desirable the diamond, the more incentive the owner of the diamond has to sell it. Which item would a jeweler prefer to sell you? The highly desirable, well-valued one that he can sell to anyone? Or would they rather sell the less desirable diamond that is dead weight in their inventory box and on their cash flow sheet?
There have been countless readers who I’ve started the diamond selection process with. Partway through, they send me a message along the lines of ‘we went to this store and found this diamond that was such a great deal, so we snatched it up.’ I then feel bad when I have to point out things they missed — things that turn it from a good deal to a terrible deal (improper certification inflating the quality, strong fluorescence, yellow fluorescence, even artificial treatment). Unfortunately, most stores make it very difficult to return a diamond ring.
It’s possible to find a good deal at a store (and by a good deal, I mean that it’s not much more expensive than an online retailer), but you are far more likely to fall into a sales trap. I’m not saying that you should unequivocally stick with online purchasing, but in general, online shopping will give you the best price and allow you to shop at your own pace.
Running a physical jewelry store is incredibly difficult. Bear with me as I provide a little background. The typical apparel retailer runs a store on 40-50% gross margins. This gives them enough money to cover all the expenses a retailer incurs and, hopefully, leaves some leftover for profit. While this is a typical profit margin for the store, bear in mind that the wholesaler/manufacturer who sells them the product also has healthy profit margins.
The truth is that the raw materials for clothing are only a fraction of the total cost of the product. That is certainly not the case when it comes to diamonds and diamond jewelry. The actual cost of the goods makes up a much larger percentage of the price than in most industries.
Another issue is the cost of stocking a store. How much do you think it costs to fill up all the racks in a store? Tens of thousands of dollars? A couple hundred thousand dollars? A typical diamond jewelry store needs to have a couple of million dollars of inventory on-hand. The overwhelming majority of stores don’t have enough spare cash to pay for that inventory up front. They either borrow money from a bank, buy the diamonds on credit from the wholesaler or just take the product on consignment. In any of those cases, the price has to be higher to cover the additional cost.
In addition to these costs, they still have the regular overhead that any retailer faces. Rent and maintenance of a storefront (given that they are selling luxury items, this is pretty significant) and the cost of having a fully-staffed store. Diamonds are not a simple item where people can start selling them after a few hours of training. So the staff costs are pretty high.
Overall, buying a diamond online will garner you a better price and better selection. If you want help finding well-cut diamonds or evaluating diamonds, contact our experts.
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