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
MajorsDec 19, 2025
MadaLuxe Group Acquires Ippolita The luxury goods company said founder Ippolita Rostagno will remain at the brand’s helm.
MajorsDec 19, 2025
LVMH Names New Bulgari CEOLaura Burdese, who joined the Italian luxury brand in 2022, will take on the role in July.
EditorsDec 19, 2025
2025 Jewelry Superlatives: A Yearbook-Style Year in Review The National Jeweler editors revisit the most noteworthy industry happenings and design trends from 2025.
Brought to you by
Impacting Tomorrow TodayHow Jewelers of America’s 20 Under 40 are leading to ensure a brighter future for the jewelry industry.
AuctionsDec 19, 2025
Jean Schlumberger’s ‘African Cat’ Is Purr-Fection Need a gift for the cat lover who has everything? Look no further than our latest Piece of the Week.
Weekly QuizDec 18, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
AuctionsDec 18, 2025
Audemars Piguet Reclaims Historic Pocket Watch at AuctionIt purchased the “Grosse Pièce,” an ultra-complicated Audemars Piguet pocket watch from the ‘20s, for a record-breaking price at Sotheby’s.
Lab-GrownDec 18, 2025
Kira Jewels Debuts Custom Lab-Grown Diamond Jewelry ServiceThe lab-grown diamond grower now offers custom engagement and fashion jewelry through its Kira Custom Lab Jewelry service.
Brought to you by
Roseco Releases New Full-Line CatalogRoseco’s 704-page catalog showcases new lab-grown diamonds, findings, tools & more—available in print or interactive digital editions.
EditorsDec 18, 2025
Terry Chandler Looks Back on 40 Years of Opportunity, Change, and FriendsChandler got his start at Michelson Jewelers and has served as DCA president and CEO since 2001. He will retire at the end of the month.
WatchesDec 18, 2025
Bob’s Watches to Open Store in New York’s JFK AirportThe boutique is slated to open this week inside Terminal 8, offering pre-owned Rolex watches and more to international travelers.
Supplier BulletinDec 18, 2025
Cell Jammers Are Targeting Your Business. Here's How to Beat ThemSponsored by Digital Monitoring Products
CrimeDec 17, 2025
Man Pleads Not Guilty to Swallowing Fabergé PendantThe special-edition egg pendant ingested in a New Zealand jewelry store was recovered after a six-day wait.
EditorsDec 17, 2025
2025 Jewelry Rewind: The Best Piece of the Week PicksAssociate Editor Natalie Francisco plays favorites with Piece of the Week, selecting a standout piece of jewelry from each month of 2025.
CollectionsDec 17, 2025
Lucy Hale Stars in Jacquie Aiche’s Holiday CampaignThe “Love and Desire” campaign is inspired by the magic that follows when one’s heart leads the way, said the brand.
GradingDec 17, 2025
SSEF Announces 2025 Scholarship WinnersTwo awardees will receive free tuition for an educational course at the Swiss lab, with flights and lodging included.
MajorsDec 16, 2025
Pandora’s New CEO Will Step Up EarlyBerta de Pablos-Barbier will replace Alexander Lacik at the start of January, two months earlier than expected.
AuctionsDec 16, 2025
Suzanne Belperron, JAR Shine in Sotheby’s First Auctions at New HQSotheby’s held its first two jewelry sales at the Breuer building last week, and they totaled nearly $44 million.
Events & AwardsDec 16, 2025
TJS Now Accepting Scholarship Applications for 2026Winners will receive free registration and lodging for its fourth annual event in Detroit.
Events & AwardsDec 16, 2025
Diamonds Do Good Names 2026 Award RecipientsThe honorees include a notable jewelry brand, an industry veteran, and an independent retailer.
CrimeDec 15, 2025
Men Receive Life Sentences in Home Invasion Murder of Jeweler Carlos Jose Hernandez and Joshua Zuazo were sentenced to life without the possibility of parole in the 2024 murder of Hussein “Sam” Murray.
Policies & IssuesDec 15, 2025
Sara Yood Named Co-Chair of RJC Standards CommitteeYood will serve alongside Eduard Stefanescu, the sustainability manager for C.Hafner, a precious metals refiner in Germany.
IndependentsDec 15, 2025
M.S. Rau to Open Store in AspenThe New Orleans jeweler is also hosting pop-up jewelry boutiques in New York City and Dallas.
AuctionsDec 12, 2025
13.54-Carat Paraíba Tourmaline Sets Records at Christie’sSet in a Tiffany & Co. necklace, it sold for $4.2 million, the highest price and price per carat paid for a Paraíba tourmaline at auction.
MajorsDec 12, 2025
David Webb Reveals Ice-Cold Holiday Window DisplayThe jeweler’s “Deep Freeze” display showcases its iconic jewelry designs frozen in a vintage icebox.
CollectionsDec 12, 2025
Piece of the Week: Oscar Heyman’s Sphene RingTake luxury gifting to new heights this holiday season with the jeweler’s showstopping 12-carat sphene ring.
Events & AwardsDec 12, 2025
IGI Jewelry Design Contest Now Accepting SubmissionsThis year's theme is “Unveiling the Depths of the Ocean.”
TrendsDec 11, 2025
Pinterest 2026 Trend Report: Brooches, Bold Gold, Cool BlueIn its annual report, Pinterest noted an increase in searches for brooches, heirloom jewelry, and ‘80s luxury.
