Let the Games Begin: How to Buy Gems Cheaply in a Bargain Culture

For most people who are born into a fixed price culture, it is an entirely new experience to make purchases without having a sticker price on the coveted object. Worse yet, if you ask for “the price,” the seller may look at you like you are from another planet. That’s because there is no “THE” price, other than the number arrived at after an exchange between the seller and the buyer. If you insist on a price, you will get “a number” but that number is not (necessarily) intended to be the price of the object that the seller wants to sell at. Nor may he or she even know (yet) what that price is. Because that depends on a lot of factors that are not technically tied to the object itself.

Value is not just determined by the cost of goods plus a markup in a bargain culture. It is the result of an exchange during which buyer and seller evaluate one another for their expertise, their financial ability, and where in the chain of ownership buyer and seller are located. I.e. if the seller is a miner and the buyer is a retail buyer from another country, the profit to be had is very large. But if the seller is a broker who has to pay the miner and the buyer is a wholesale buyer, the profit margin decreases.

However, in wholesale, purchases are based on quantity – where that is either the result of several smaller purchases on repeat business, or a larger one-time purchase of a parcel, or both.

The video above shows Yvonne's friend, Jochen of Jentsch Mineralien, buying minerals on location near Muzo in Colombia. 

It is very important for a gemstone seller, especially if they are in a developing country, to know what type of buyer you are. If you are visiting just once, making one purchase, and do not know gems or their prices, then you will have to pay top dollar. To avoid being pigeonholed as an easy target for a larger paycheck, here are some tips and tricks.

1.      Know your stuff! That is the single most important rule that you must follow. If you want to buy a no heat blue sapphire in Sri Lanka and you are not known to the seller or introduced (this gives you safety), then you need to know how to identify that the gem is heated. Even a Sri Lankan lab report is no guarantee, because most labs do not have the latest, most expensive scanning equipment you might find at GIA. I am not very good at knowing whether a gem is heated (many experienced buyers make very accurate guesses but I am not one of them), so I will not buy unheated material on location. I will go only through sources I trust. But, if you want to buy a garnet, and they are traditionally not treated, then you just need trained eyes to look for window and flaws, and you need to have researched the prices for comparable gems on some websites that have fixed prices.

2.      Show you can use your tools. Your ability to handle a loupe and tweezer, as well as when you need to use either, will be evaluated. The more experience you have with tools, the better your prices will be.

3.      Use recommendations whenever possible. If you got information about a specific seller from another seller, mention their name. Even when I do not have that, I will mention the names of well-known buyers that I have done business with, just so they know I am in the trade, and I have recourse to complain to one of my “colleagues” if I am given exorbitant prices.

4.      Buy a parcel! Single stones always go at a premium. Parcels are much cheaper and you will verify the price per carat, rather than by checking every single stone. The idea is to look at a parcel and just study the finest material in there. Don’t make that too obvious as you wield your tweezer. Look at each gem in the parcel and count in your mind how many good stones there are and how they should be valued. Parcels may include useless material and you may need to eyeball the percentage of that before you decide if the parcel price is good.

5.      Become a repeat buyer. Make a smaller purchase first to show your willingness to interact and then come back at a later point. I’ve done it where I would look at emeralds in Bogota first, get an idea of what people want to quote me, and then let them know I will buy once I return from my excursion to the mining villages. Then I purchase a week later, and during that week I will have got an idea of price and availability. This helps when I cannot return to the country another time. Leaving even a couple of days between your initial request and your purchase can help. But: don’t make the mistake of driving the price down too much or doing too much comparison shopping. Word gets around and that can be good or bad. Essentially you need to decide what kind of information about you you want to spread and you are the only one in control of that.

I realize these are tall orders. None of these tips and tricks are easy to follow. They also tell you why wholesalers get better prices than one off retail buyers. That said, you can certainly work on some of these tips. You can go online before you travel and do some research, you can bring a sample stone you want to match (maybe a small purchase from a reliable US seller). You can make sure you have cash on hand, and you want to give yourself a little time to get a feel for the trade on location.

Last but not least: what about buying ONLINE from an international vendor? You can, after all, bargain on sites like Instagram, as well as connect to a small seller in the middle of nowhere, as long as that seller has a cell phone and internet (hint: they all do!). My advice? If you don’t know the seller, then forget it. I wouldn’t do it, and neither should you. That’s just a recipe for getting ripped off, and it is totally obvious why.