ColumnistsJun 30, 2025
The Smart Lab: Why Q3 Is the Secret Weapon For Holiday Jewelry SalesColumnistsJul 08, 2025
Peter Smith: Why Jewelers Struggle With Premium Pricing
Luxury brands charge thousands for their shoes and handbags. Jewelers pricing diamond products should take note, Peter Smith writes.
Peter Smith is an industry consultant, speaker, sales trainer, and author. He can be reached via email at TheRetailSmiths@gmail.com.
I saw a post on LinkedIn recently where someone from the trade was questioning the logic of natural diamond pricing.
He posited that since diamonds cost just “hundreds of dollars” to extract from the ground, and since they sell at retail for “thousands of dollars,” he wondered who was getting all the money, the implication being, “How can they sleep at night with all those profits!”
What he didn’t ask was how much it cost to make Louis Vuitton bags and why they sell for thousands of dollars, despite being crafted of materials that are decidedly less than rare.
He didn’t mention anything about the fact that LVMH CEO Bernard Arnault has become one of the richest people in the world off the back of those substantial profits from manufacture through retail.
He didn’t ask what Ferragamo shoes cost to make or why they sell for hundreds or thousands of dollars.
He didn’t even ask why Elsa Peretti open-heart pendants can cost thousands of dollars and why Tiffany & Co. (oops, back to LVMH again) commands so much money for such a basic product.
He posited that since diamonds cost just “hundreds of dollars” to extract from the ground, and since they sell at retail for “thousands of dollars,” he wondered who was getting all the money, the implication being, “How can they sleep at night with all those profits!”
What he didn’t ask was how much it cost to make Louis Vuitton bags and why they sell for thousands of dollars, despite being crafted of materials that are decidedly less than rare.
He didn’t mention anything about the fact that LVMH CEO Bernard Arnault has become one of the richest people in the world off the back of those substantial profits from manufacture through retail.
He didn’t ask what Ferragamo shoes cost to make or why they sell for hundreds or thousands of dollars.
He didn’t even ask why Elsa Peretti open-heart pendants can cost thousands of dollars and why Tiffany & Co. (oops, back to LVMH again) commands so much money for such a basic product.
“In a business where we command, in my view, appropriate price premiums for brands such as David Yurman, Roberto Coin, Marco Bicego, and even Pandora, we continue to tie ourselves in knots at the prospect of doing likewise with diamond products.”
— Peter Smith
I mean, have you ever even put those pendants on a scale?
In a business where we command, in my view, appropriate price premiums for brands such as David Yurman, Roberto Coin, Marco Bicego, and even Pandora, where the suggested retail pricing has virtually no bearing at all on the cost of materials and manufacture, we continue to tie ourselves in knots at the prospect of doing likewise with diamond products.
It’s as if even thinking about making margin on diamonds is crossing a moral rubicon.
Instead of asking ourselves what we should price the goods at, we gingerly tiptoe upwards from our costs and then, even after arriving at the minimum level of acceptable pricing, often allow discounting, further eroding essential margins.
Why do we do that? Why don’t we lean confidently into premium pricing and embrace the value proposition?
The science of pricing psychology is clear in showing that customers use prices as a proxy for quality. This is especially true when they don’t have a clear sense for the products or category in question.
The higher the price, the better the perceived quality. The higher the perceived quality, the greater the level of consumer satisfaction.
Do customers really care what your margins are or what you paid for a diamond or a piece of jewelry?
Do they know what the price of gold is before they visit their local jewelry store to mark a special occasion?
In “Unleash Your Primal Brain,” Tim Ash wrote, “If something is thought of as being cheap, our conscious mind will associate it with being less effective and substandard as well. Our brain can force us to undermine its objective qualities.”
It seems to me that retailers lose entirely too much sleep fretting over whether they are charging customers too much for product, instead of focusing on the most important task of inspiring customers to want to spend more.
Monsieur Arnault and Signore and Signora Ferragamo? They sleep just fine.
Happy retailing!
Editors' Picks
Sponsored by
More on Columnists
The Latest
PodcastsMay 20, 2026
Episode 5: Sotheby’s Frank Everett Puts the Auction Market in PerspectiveEverett covers colored stones’ surging popularity, the mellow return of the “Mellon Blue,” and his “The Devil Wears Prada” doppelgänger.
CrimeMay 20, 2026
NYPD Warns of Jewelry Swap Scams Targeting SeniorsThe NYPD is warning elderly New Yorkers to keep their jewelry hidden when walking outside to avoid being a target.
IndependentsMay 20, 2026
Adornment & Theory’s New Store Feels Like Home Designer Viviana Langhoff has realized her dream of owning a space for her Chicago jewelry store that looks and feels like her brand.
Brought to you by
All Eyes on Gold Prices. Alternatives to Look For. And What to BEWARE of in VegasAs gold prices rise, today’s retailers are looking for alternatives at prices that will appeal to wider audiences.
Events & AwardsMay 20, 2026
Here Is Couture’s 2026 Education Lineup The sessions will run from Friday, May 29, to Sunday, May 31, with one being a live taping of an episode of Couture’s podcast.
Weekly QuizMay 14, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Lab-GrownMay 20, 2026
Savannah Friedkin Jewelry Names New CEOFormer Stephanie Gottlieb Fine Jewelry executive Morgan P. Richardson is joining the lab-grown diamond jewelry brand.
WatchesMay 19, 2026
Here’s the AP x Swatch Pocket Watch That Caused PandemoniumThe $400 pocket watch is a blend of Audemars Piguet’s iconic eight-sided Royal Oak and Swatch’s unserious Pop watches from the ‘80s.
Brought to you by
How Modern Training Is Becoming a Competitive Advantage for Jewelry RetailersWith the trade and customer trust in mind, GIA® developed NextGem™ – on-demand training designed specifically for retail.
CollectionsMay 19, 2026
Chris Ploof’s New Collection Makes an Ancient Medal ModernWith gold prices on the rise, the “Modern Electrum” collection uses an alternative, non-tarnishing metal alloy composed of gold and silver.
IndependentsMay 19, 2026
Ellen and Michael Fruchtman Retire, Sell Marketing Agency Fruchtman Marketing has new owners, Erin Moyer-Carballea and Manuel Carballea, and will relocate to Miami.
CollectionsMay 18, 2026
Foundrae’s New Collection Taps Into JoyThe “Limitless Expansion of Joy and Hope” collection evokes summer through colored gemstones and motifs of butterflies and florals.
CollectionsMay 18, 2026
Hancocks London Acquires Historic ‘Inchiquin’ EmeraldThe jewel, circa 1890, is from the late Victorian era and was owned by descendants of the last high king of Ireland.
Events & AwardsMay 18, 2026
Here Are the 2026 JCK Industry Fund Grant Recipients This is what the nine recipients plan to do with the funds.
AuctionsMay 15, 2026
American Collector Ponies Up Almost $17K for John Wayne’s RingThe Western star’s 14-karat gold signet ring sold for six times its low estimate following a bidding war at U.K. auction house Elmwood’s.
Events & AwardsMay 15, 2026
JA, MJSA To Sponsor Roundtable at TJSThe discussion, "Rebuilding the Jewelry Workforce," will take place on Saturday, May 16, in Troy, Michigan.
SourcingMay 15, 2026
State of Diamonds: The Way Forward for Natural DiamondsThe jewelry industry is reassessing its positioning as Gen Z reshapes the retail landscape and lab grown continues to gain market share.
AuctionsMay 14, 2026
White Diamonds Lead Sotheby’s Auction, Blue Diamond Does Not SellA matching pair of 18.38-carat, D-color diamonds from Botswana’s Jwaneng mine sold for $3.3 million, the top lot of the jewelry auction.
Supplier BulletinMay 14, 2026
A Diamond Is Forever Continues Desert Diamonds – Bridal ReinvigoratedSponsored by A Diamond Is Forever
SourcingMay 14, 2026
State of Colored Stones: The Spirit of Young American Gemstone CuttersThe next generation of lapidarists are entrepreneurial, engaged online, and see the craft as a means for artistic expression.
AuctionsMay 14, 2026
‘Ocean Dream’ Makes Waves at Christie’s, Fetching $17MIt was the second auction appearance for the fancy vivid blue-green diamond, which sold for $7.8 million at Christie’s Geneva 12 years ago.
CrimeMay 14, 2026
Second Man Arrested in Florida Pawn Shop Shooting Members of the U.S. Marshals Task Force took a 22-year-old man into custody. He was charged with tampering with evidence.
CrimeMay 13, 2026
JSA’s 2025 Crime Report Shows ‘Concerning’ Rise in ViolenceWhile the overall number of crimes was down, there were more incidences in which robbers pulled out guns, mace, or rammed cars into stores.
IndependentsMay 13, 2026
New Orleans Jeweler Closing Canal Place StoreJack Sutton Fine Jewelry is closing its store inside the downtown shopping center after 40 years in business.
SourcingMay 13, 2026
Smithsonian Acquires ‘Winston Red’ Diamond PaintingReena Ahluwalia’s painting of the rare red diamond is the first contemporary painting to join the National Gem Collection.
TrendsMay 13, 2026
State of Design: Only the Innovative Will SurviveThe price of gold has risen, affecting the number of pieces designers make, the materials they use, and how they position themselves.
ColumnistsMay 12, 2026
It’s Official: We’re Getting ‘Brain Rot’ From Watching Short-Form Videos Peter Smith gives tips on leading meetings, developing marketing, and making trade show appointments in the age of short attention spans.
CollectionsMay 12, 2026
Jessica McCormack Debuts Antique Coin-Inspired Medallions for SummerThe 11-piece “Medallions” capsule collection features five motifs: a crying eye, a heart on fire, a spiral, a flower, and a swallow.
