Buying Diamonds in the Diamond District – A Diamond Buying Survival Guide

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What is it? Where is it?

What is a diamond district? It is a clustering of diamond cutting houses, diamond wholesalers, jewelry manufacturers, and street level retail jewelry stores. These companies group together, usually in downtown areas, this is done in order to have a complete jewelry making and distribution machine with each company being a different cog within that machine.

If it were not for the street level retail storefronts, you probably would never know that you were in a diamond district. The diamond cutters, diamond wholesalers, jewelry manufacturers, etc. do not hang out any signs advertising their businesses. They do this by design because they want to be as “low key” as possible. Security is always a prime concern when it comes to diamonds and jewelry. There are security cameras everywhere, along with uniformed and undercover police throughout the area, and to enter many of the buildings is just as difficult as going through security at the airport. There are people walking around on the street that might have tens or even hundreds of thousands of dollars in diamonds that are carried in special vests that are under their coats.

What’s the big draw?

The most famous diamond district, the one that comes to mind when the term is even mentioned, is the one block section of West 47th Street between Fifth and Sixth Avenues in New York City. This is the place that also has street signs labeling it as “Diamond and Jewelry Way”. There are other “diamond districts” in other cities in the US as well as other cities around the world… but there is only one 47th Street!

The reason that West 47th Street is the best-known diamond district is because of its size and location. It is truly impressive! With the long line of store windows that have so much bling that you need to wear sunglasses just to look at all the jewelry on display in the windows. New York City has long been an important hub in the distribution of gemstones and jewelry on a wholesale level but because Manhattan is within commuter distance of many other states it has given 47th Street a special advantage. For many years, some people who lived within a few hours travel to Manhattan’s diamond district would come to shop there because it was like shopping on the Internet (and this was even before Al Gore invented the Internet)!

Huh?, How is New York’s diamond district like the Internet? OK… let me explain.

Two of the biggest advantages of shopping on the Internet have been the vast selection of goods at lower prices and many times the savings of not having to pay sales tax on the items that you purchase from a merchant who does not have a “tax presence” in your state.

People shop on 47th St. and then because they have their merchandise sent to their homes in New Jersey, Connecticut, Boston, Philadelphia, Washington, DC, etc. they do not have to pay NY sales tax. This normally works out OK but it has presented problems over the years because there have been cases where a customer has walked out of the store with the jewelry but they never paid any NY state sales tax. The merchant performs this “special service” for them by mailing an empty box to their home in another state in order to avoid paying NY sales tax. This does get into the serious problem of US federal mail fraud (because the merchant mailed an empty box and insured it for the dollar amount of the jewelry that was purchased) not to mention having NY state being interested in collecting their tax bite, this is a problem that you should avoid.

What to expect….

When you walk down the street it does have a 3-ring circus feel to it, with what seems like non-stop action! A common term that you will see everywhere will be “wholesale to the public”. Among the places where you will be able to buy diamonds and jewelry, will run the from very nice “high-end” retail jewelers to tiny little booths packed into “diamond exchanges”. Because there are many of these small booth owners who are competing for your business, don’t be surprised to see aggressive salespeople trying to drag you into their store to show you the “great deals” on their diamonds. The diamond district can be pretty intimidating!

In general, if you go shopping in the diamond district it will not be like shopping at the local mall. This is shopping with an edge! There are many shops selling the same type of products and the salespeople will aggressively sell their products so you will need to be prepared if you would like to give it a try. You will need to do a lot of comparison shopping and most likely do some haggling in order to find the best prices. You might be more comfortable to shop with a friend, especially if your friend loves this type of shopping.

A few dos and don’ts!

Do not buy from the first person that you talk with, be prepared to walk away.

Do your homework before you make any purchase. It is quite easy for the salespeople to sense if a customer is clueless.

Do try to get a referral from someone who has previously purchased from a trusted shop in the diamond district.

Do not buy if you feel uncomfortable… this might not be the right place for you to buy.

Do consider paying in cash… please be very careful with this idea! It is generally not a good idea walking around in a big city with a bunch of cash, but as we all know “cash is king”, and it will motivate the salesperson to give you the best possible price.

Do not think that you are automatically getting a wholesale price just because they have a “wholesale to the public” sign.

Do get a receipt, written guarantee, diamond grading report, appraisal, etc. when you pay for your item.

As with any situation involving an expensive purchase of something that not many people are well versed in, education should be an essential part of your plan. This is even more important if you plan to venture into the diamond district.

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write by jones

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