Wholesale as we all most probably are already aware revolves around buying goods or products in large quantities to reduce unit cost. The diamond industry is no different and when gemstones are purchased in significant amounts from diamond suppliers for retail resale, the buyers can increase their bottom lines and gain a competitive advantage over competitors. In essence, it is a business model that allows retailers to gain access to a wide variety of diamonds at a lower cost compared to buying individual stones.
Among the primary advantages of wholesale diamonds is the potential for significant cost savings as we all know when a business entity can front a large amount of capital, it retains the power to negotiate for lower prices because of its capacity to purchase higher volume. Generally, when the cost advantage is achieved (due to the high volume of purchases), the retailer can offer his or her customers better prices which increases the retailer’s competitive advantage. In short, it can be said that wholesale diamonds are an attractive option for those looking to purchase high-quality gems at more affordable prices.
Although lower prices are the primary objective within the context of buying diamonds at wholesale prices, buying diamonds online from a diamond wholesaler also offers buyers or retailers access to a much wider range of choices. It is due to these reasons that retailers choose to buy diamonds at wholesale prices as they are given access to an extensive inventory of diamonds in a wide variety of shapes, sizes, cuts, and qualities, which is a critical element for retailers as they would be able to cater to all the different customer preferences that they deal with.
Another advantage of purchasing diamonds wholesale is the assurance that the buyers receive related to the authenticity and quality of the diamonds as reputable wholesale diamond suppliers are bound to contracts that require them to provide only certified diamonds that meet industry standards.
Other aspects of buying diamonds wholesale include the fact that relationships are built that give retailers ‘special services’ after some time such as customization and even valuable advice. However, the disadvantages of buying diamonds at wholesale prices include the capital required and because these diamonds cannot be returned if they are unsold, unsold diamonds are basically ‘assets’ that are just idle and not generating revenue.
Such scenarios are seen as negative elements for a business simply because their ROA (Return on Assets) reading reflects negatively in their books which might deter investors from investing in the business.
In summation, it can be said that with proper inventory management and diamonds obtained at wholesale prices retailers will eventually gain a competitive advantage over their competitors as they will be able to not only offer lower prices, but they would also be able to provide customers with a much wider range of high-quality diamonds.
What is crucial within the context of buying diamonds at wholesale prices is the ability of the buyers to establish a balance between the volume of purchase and the ‘quality of purchase’.