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
SourcingJul 02, 2026
London Diamond Bourse Elects First Female PresidentCharlotte Rose said her election is “a sign that this is an industry capable of change.”
Supplier BulletinJul 02, 2026
Elevating Retail Showcases with Today's Necklace & Bracelet TrendsSponsored by Rio Grande Jewelry Supply
TrendsJul 02, 2026
Oscar Heyman’s Flag Brooch Celebrates AmericaThe American jewelry house, founded by Latvian immigrants, has been creating American flag brooches since 1917.
Brought to you by
Wedding Band Trends 2026: Personalization Takes Center StageColored gemstones, artisan finishes, mixed metals, and meaningful details are shaping demand in bridal jewelry.
IndependentsJul 02, 2026
D. Geller & Son Partners with KSU Art Students on Store MuralThe artwork celebrates the Atlanta jeweler’s legacy and symbolizes its commitment to supporting local artists and its community.
Weekly QuizJul 01, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Events & AwardsJul 02, 2026
Stratus Estate Buyers Offers Jewelers Turnkey Buying EventsIts team can evaluate jewelry and watches, as well as luxury handbags, artwork, and collectibles.
SurveysJul 01, 2026
Consumer Confidence Ticks Up in JuneFalling oil prices were a factor in the slight month-over-month improvement.
Brought to you by
Building the Future of Jewelry Retail: DCA Expands Education, Leadership Development, and Workforce SolutionsDCA is preparing the next generation of professionals by supporting workforce development, leadership growth, and career advancement.
CollectionsJul 01, 2026
Rio Grande Launches First Finished Bridal CollectionThe new offering comprises more than 120 bridal and engagement ring styles with natural and lab-grown diamonds.
WatchesJul 01, 2026
Rolex Unveils Clock at Rockefeller CenterThe clock is part of the celebration for the soon-to-open Rolex headquarters on New York City’s Fifth Avenue.
IndependentsJul 01, 2026
Kristen Cannon of Valobra Master Jewelers Dies at 49The public relations professional is remembered for her benevolent generosity and unwavering commitment to those around her.
WatchesJun 30, 2026
Pokémon Fans Will Want to Catch This New G-Shock WatchThe new watch commemorates Pokémon’s 30th anniversary.
MajorsJun 30, 2026
Saks Global Emerges From Bankruptcy With New NameThe luxury retailer is now called Exemplar Luxury Group.
CollectionsJun 30, 2026
Jade Ruzzo’s New Collection Embodies the Art of Being a LadyThe “Lady” collection is a new take on old beauty standards with gemstone-adorned hair pins and combs, a compact mirror necklace, and more.
SourcingJun 30, 2026
Blue Nile Introduces Montana Sapphire CollectionThe new line is included in the e-tailer’s curation of jewelry celebrating America’s 250th anniversary.
GradingJun 30, 2026
AGS Opens 2026 Recertification ExamAll active members who earned their credential or designation before Dec. 1, 2025, are required to recertify.
CollectionsJun 29, 2026
Briony Raymond’s New Collection Is a ‘Carousel’ of Hard StonesThe new jewelry collection uses a colorful palette of onyx, malachite, tiger’s eye, mother-of-pearl, lapis, turquoise, and coral.
IndependentsJun 29, 2026
Look Inside Lee Michaels’ Revamped Mississippi FlagshipLee Michaels Fine Jewelry is celebrating 30 years in the Ridgeland, Mississippi community.
GradingJun 29, 2026
National Rarities Announces New Gemology ManagerSean Milliner has joined the company.
GradingJun 29, 2026
GIA to Open New London CampusClasses will begin in August at GIA’s new Canary Wharf location.
AuctionsJun 26, 2026
‘Hogback’ Diamond Ring Finds a New Home A ring set with “hogback” diamonds, an early stone cut dating to around the 16th century, sold for more than $20,000 at a U.K. auction.
CollectionsJun 26, 2026
Strength Is Sharpened Into Beauty in Kris Averi’s ‘Prism Thorn’ RingThe rainbow version of the ring, our Piece of the Week, features angel-cut, octahedral lab-grown sapphires designed to be worn as armor.
MajorsJun 26, 2026
Rembrandt Charms Debuts ‘Charms That Give Back’The new initiative donates a portion of the proceeds from select charms to charitable causes.
TrendsJun 26, 2026
Bernard James Celebrates Knicks’ Win with RingThe Brooklyn-based jeweler created a limited-edition version of its “Aura” eternity band, set with gemstones in the team’s colors.
SourcingJun 25, 2026
ICA Names Brandee Dallow as CEODallow will lead the International Colored Gemstone Association, effective July 6.
EditorsJun 25, 2026
Out & About: How Jewelers Mutual, SCAD Are Tackling the Bench Jeweler ShortageSenior Editor Lenore Fedow headed to Savannah to learn more about the 10-year, $10 million partnership between JM and the art school.
CollectionsJun 25, 2026
Mejuri Experiments With SteelIts new capsule jewelry collection features gold-finished stainless steel pieces designed for a maximalist look without a luxury price tag.
