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
SurveysJan 30, 2026
These Are the Top Brands of 2026, Says YouGovFrom tech platforms to candy companies, here’s how some of the highest-ranking brands earned their spot on the list.
CollectionsJan 30, 2026
Follow the Beat With Etiq’s ‘Khol’ RingThe “Khol” ring, our Piece of the Week, transforms the traditional Indian Khol drum into playful jewelry through hand-carved lapis.
MajorsJan 30, 2026
Arch Crown’s 2026 ‘Tag & Label’ Catalog Is HereThe catalog includes more than 100 styles of stock, pre-printed, and custom tags and labels, as well as bar code technology products.
Brought to you by
The MJSA Mentor & Apprenticeship Program: Attracting & Training the Next Generation of Bench JewelersLaunched in 2023, the program will help the passing of knowledge between generations and alleviate the shortage of bench jewelers.
CollectionsJan 29, 2026
Ghirardelli’s ‘Chocolocket’ Returns for Valentine’s DayThe chocolatier is bringing back its chocolate-inspired locket, offering sets of two to celebrate “perfect pairs.”
Weekly QuizJan 29, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
AuctionsJan 29, 2026
These Were Bonhams’ Top 10 Jewelry Lots in 2025The top lot of the year was a 1930s Cartier tiara owned by Nancy, Viscountess Astor, which sold for $1.2 million in London last summer.
SourcingJan 29, 2026
Stuller Website to Mark AGTA-Sourced GemstonesAny gemstones on Stuller.com that were sourced by an AGTA vendor member will now bear the association’s logo.
Brought to you by
How Jewelers Can Fight Back Against Cell JammersCriminals are using cell jammers to disable alarms, but new technology like JamAlert™ can stop them.
WatchesJan 29, 2026
Audemars Piguet Opens AP House in AtlantaThe Swiss watchmaker has brought its latest immersive boutique to Atlanta, a city it described as “an epicenter of music and storytelling.”
SourcingJan 28, 2026
Ethical Gem Fair to Debut Designer Showcase in TucsonThe new addition will feature finished jewelry created using “consciously sourced” gemstones.
SurveysJan 28, 2026
Consumer Confidence Falls Below Pandemic Lows in JanuaryThe index fell to its lowest level since May 2014 amid concerns about the present and the future.
IndependentsJan 28, 2026
Foundrae Heads to Aspen for Latest Store OpeningThe new store in Aspen, Colorado, takes inspiration from a stately library for its intimate yet elevated interior design.
FinancialsJan 28, 2026
Tiffany & Co., Bulgari Sales Resilient as LVMH’s 2025 Sales SlipThe brands’ high jewelry collections performed especially well last year despite a challenging environment.
CollectionsJan 27, 2026
De Beers London, GemFair Debut New Collection Highlighting Artisanal DiamondsThe collection marks the first time GemFair’s artisanal diamonds will be brought directly to consumers.
SourcingJan 27, 2026
GemGuide Launches Pricing for Montana SapphiresThe initial charts are for blue, teal, and green material, each grouped into three charts categorized as good, fine, and extra fine.
TechnologyJan 27, 2026
Clientbook Launches Appointment Booking ToolThe new tool can assign the appropriate associate based on the client or appointment type and automate personalized text message follow-ups.
SourcingJan 26, 2026
Tucson Preview 2026: Earthy Tones and Innovative Shapes Buyers are expected to gravitate toward gemstones that have a little something special, just like last year.
SourcingJan 26, 2026
Angolan Diamond Cos. Join NDC as Rio Tinto, Murowa Exit Endiama and Sodiam will contribute money to the marketing of natural diamonds as new members of the Natural Diamond Council.
MajorsJan 26, 2026
Francesca’s To Close All StoresThe retailer operates more than 450 boutiques across 45 states, according to its website.
MajorsJan 26, 2026
BIJC Names 5 New Board MembersThe new members’ skills span communications, business development, advocacy, and industry leadership.
CollectionsJan 26, 2026
Tiffany & Co. Celebrates 189 Years of Love StoriesThe jeweler’s 2026 Valentine’s Day campaign, “Celebrating Love Stories Since 1837,” includes a short firm starring actress Adria Arjona.
GradingJan 26, 2026
DCA Updates Colored Gemstone CourseThe new features include interactive flashcards and scenario-based roleplay with AI tools.
MajorsJan 23, 2026
Watches of Switzerland Acquires 4-Store Jewelry Chain in TexasFamily-owned jewelry and watch retailer Deutsch & Deutsch has stores in El Paso, Laredo, McAllen, and Victoria.
WatchesJan 23, 2026
Damiani Group to Acquire Baume & MercierThe Italian luxury company purchased the nearly 200-year-old Swiss watch brand from Richemont.
TrendsJan 23, 2026
Martin Katz’s Earrings Call to Mind Wintry Weather Micro-set with hundreds of diamonds, these snowflake earrings recreate “winter’s most elegant silhouette,” and are our Piece of the Week.
MajorsJan 23, 2026
Rembrandt Charms Names New Director of Creative, Brand StrategyElla Blum was appointed to the newly created role.
Supplier BulletinJan 22, 2026
The Rise of Centralized Sourcing in the Colored Gemstone MarketSponsored by RapNet
