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!
More on Columnists
The Latest
SourcingOct 27, 2026
De Beers Celebrates the Holidays With New ‘Desert Diamonds’ CampaignThe “Icons” holiday campaign spotlights four classic diamond jewelry styles reimagined in “Desert Diamond” tones.
IndependentsOct 27, 2026
Solomon Brothers Acquires Mervis Diamond ImportersSolomon Brothers, which has three stores in the Metro Atlanta area, said it may continue to acquire other independent jewelers.
IndependentsOct 27, 2026
Gabriel & Co. Supports Charity Partner DKMS With Gala, New JewelsThe fine jewelry brand raised $2.3 million at its annual gala that supports the nonprofit’s fight against blood cancer and blood disorders.
Brought to you by
A Diamond Is Forever Launches 2026 Holiday Campaign Championing Natural DiamondsA Diamond Is Forever's holiday campaign reimagines natural diamond icons for a new generation celebrating individuality.
Events & AwardsOct 27, 2026
JFC Announces 2027 ‘Facets’ HonoreesThe annual fundraising event is slated for June 6, 2027, at The Venetian Resort in Las Vegas.
Weekly QuizOct 22, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsOct 26, 2026
Bliss Lau’s ‘Vantage’ Point Is the Hawaiian HorizonIn her “Vantage” collection, Lau explores heritage, identity, and inner strength through designs featuring blue-green Guatemalan jade.
MajorsOct 26, 2026
Tiffany & Co. Takes Consumers Behind the ScenesThe jeweler gave the public backstage tours of its flagship store and its design and innovation workshop as part of LVMH’s open house.
Brought to you by
Open an Account, Get $50 Off Your First Order. No Code Needed.Built on Relationships. Refined by Craft.
Events & AwardsOct 26, 2026
Support JFC’s ‘Monster Mash Challenge,’ If You DareVote for which jewelry professional should dress up as a monster to support Jewelers for Children’s annual Halloween fundraiser.
MajorsOct 23, 2026
PGI USA Set to Close at Year’s EndThe closure is part of a global restructuring that also includes PGI winding down its operations in Japan, South Korea, and Hong Kong.
SourcingOct 23, 2026
Rachel Chalchinsky’s ‘Survivor Tribute’ RingThe ring, our Piece of the Week, was designed by eight-year breast cancer survivor Rachel Chalchinsky of Color Source Gems.
TechnologyOct 23, 2026
JA Unveils New Website, LogoThe website offers enhanced member benefit access, industry directories, educational resources, a job board, and access to the MJSA Journal.
FinancialsOct 23, 2026
Kering’s Jewelry Sales Up Double Digits in Q3Boucheron and Pomellato had a strong third quarter, with Kering looking at jewelry as an increasingly important part of its portfolio.
CrimeOct 22, 2026
Jeweler Shot and Killed in His Suburban Cincinnati Store Tara Sinchuri was the owner of Everest Jewels in Fairfield, Ohio, and a father of three. He was found dead in his store on Tuesday.
MajorsOct 22, 2026
Neiman Marcus Has Gifts for the Jewelry Lover Who Has EverythingBespoke experiences from Buccellati and Verdura are on the retailer’s 2026 “Fantasy Gifts” list.
Events & AwardsOct 22, 2026
JIS Fall 2026 Reports Record-Breaking Attendance The number of participants at the fall show was up 12 percent.
CollectionsOct 22, 2026
Billie Eilish, Finneas Co-Design Collection for John HardyThe Academy and Grammy award-winning siblings have collaborated with John Hardy on a new jewelry line inspired by their personal style.
PodcastsOct 21, 2026
Episode 10: This Episode Is Haunted Diana Singer shared the stories of two “cursed” diamonds on this month’s podcast, which was inexplicably riddled with technical issues.
IndependentsOct 21, 2026
Gardner-Collier Jewelry to Close After 9 Decades in BusinessThe family-owned jeweler has three locations across Missouri and Iowa.
SourcingOct 21, 2026
Venetia Mines Final Carats Ahead of 2-Year ShutdownThe De Beers-owned diamond mine in South Africa is being put on ice as part of a round of previously announced cost-cutting measures.
CollectionsOct 21, 2026
Helzberg, Nordstrom Carrying New Jewelry Collection From Off-WhiteThe collection centers designs with clean geometric lines, chunky sculptural pieces, and recognizable details from the luxury fashion brand.
SourcingOct 21, 2026
Gemfields’ Mixed-Quality Ruby Auction Earns $52MThe miner said it saw particularly strong prices for larger, fine-quality rubies at the sale.
CrimeOct 20, 2026
Security Guard Charged With Murder in Shooting at Texas MallThe guard opened fire on a man who was smashing a jewelry display case at La Gran Plaza in Fort Worth last week, police said.
IndependentsOct 20, 2026
David Gardner’s Jewelers Unveils Newly Expanded, Revamped ShowroomThe Texas jeweler added 2,000 square feet to its reimagined showroom, complete with a new design studio and an event space.
SourcingOct 20, 2026
The $50M Victoria’s Secret ‘Fantasy Bra’ By The NumbersJacob & Co.'s diamond masterpiece is the most expensive Fantasy Bra ever worn on the Victoria’s Secret Fashion Show runway.
CollectionsOct 20, 2026
Mignon Faget’s Collection Chooses Handmade Over AIThe “Atelier” collection was inspired by the tools, rituals, and objects in an artist’s studio as a quiet rebuttal to an automated world.
MajorsOct 19, 2026
The Knot to Acquire Rival Wedding Planning Platform ZolaThe pending acquisition is an “exciting opportunity” for wedding vendors to grow their business, said The Knot Worldwide’s CEO.
