FROM THE 5Cs TO A DIAMOND PRICING SYSTEM

 

Combining his personal vision with decades of expertise and insight, Ehud Arye Laniado has developed state-of-the-art pricing systems for both rough and polished diamonds.

POLISHED DIAMOND PRICING SYSTEM

The polished diamond pricing system uses detailed criteria which enable a buyer to ask a seller key questions remotely over the phone and confidently know whether a stone is appropriately priced, without seeing it in person.

Diamond pricing system

There are 3 pivotal factors which ensure Laniado’s polished diamond pricing system operates with precision.

1. Comprehensive classification of diamond types

The system covers over 18,000 diamond categories across the 4Cs, taking in diamonds up to 30 carats, with clarity ranging from Flawless to I3 and colour from D to P. When factors beyond the 4Cs are brought into the picture, the system covers millions of additional price points.

2. Comprehensive classification of diamond pricing factors

The system takes into account all factors affecting a diamond’s price, considering the 4Cs as well as comments irregularities which are not systematically considered by other diamond pricing systems. For example, an irregularity called a crystal can create a considerable price differential on two diamonds both deemed to be of the same quality when evaluated purely on the basis of the 4Cs. For a 2.5 – 2.99 carat stone, a crystal at the centre generates an important discount to the price of the stone’s top quality equivalent, while if the crystal is on the culet (the flat face on the bottom of a diamond) and reflecting it, this can generate a much higher discount which can go from 10% to 15%.

3. Innovative data collection and assessment

The fully automated and traceable system methodically gathers a vast amount of diamond market pricing data, including real market transactions and final market asking prices, from a variety of sources on like-for-like diamonds from precisely defined criteria, based on the 4Cs and over 400 irregularities.

Then it uses a proprietary process of association to evaluate the prices of other diamonds. It does this based on the established industry principle that price changes at certain points are closely linked to price changes in other similar stones.

ROUGH DIAMOND PRICING SYSTEM

The uniqueness of Laniado’s rough diamond pricing system is its ability to comprehensively price diamonds across all the run-of-mine types in terms of sizes, shape, colours and quality.

Diamond pricing system

Its starting point is the price that a rough diamond is expected to fetch once polished, and it estimates a value according to the characteristics of the rough stone.

Two key aspects of the system enable it to comprehensively price all rough diamonds from the cheapest to the most expensive in a unique way.

First, it has developed a proprietary method to estimate the typical composition of a run-of-mine parcel, based on a statistical prediction of the composition of the aggregate run-of-mine production reflecting Laniado’s decades of experience. This method enables an intelligent forecast of the polished stones that a rough parcel can be expected to contain.

Then to estimate the prices within this parcel, it uses a reverse engineering matrix based on Laniado’s own Polished Pricing system which, due to its comprehensive coverage of polished diamonds, is able to classify the prices of all diamond types across run-of-mine.

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