Diamonds Wholesale and economy Bloodshed The diamond industry is worth literally billions of pounds a year in the trade of precious stones wholesale industry and the domestic market. The way these markets work vary widely, there is a strong demand for physical properties of stone as the hardest natural material, the other has a strong demand created by the opportunity of a rare and beautiful pearl.
The diamonds are actually not as rare as we are led to believe and the market is a highly organized infrastructure to maintain stable prices and strong demand. Add to that the wholesale trade in illegal activities or "blood diamonds" and the financial structure of the diamond market is becoming increasingly complicated.
Until the late 1800s, diamonds were a rare and highly prized stone. Only the rich could afford a quality gem and jewelry possess diamonds is a status symbol or a sign of wealth. There was a small commercial trade in diamonds from Africa and Australia, with more diamonds on the market used as jewelry.
The stones from Australia are renowned for their most challenging in the world, and have been designated for industrial use, while African beads are prized for their aesthetic, making for the market of jewelry. Suddenly, because of the discovery of a new mine in South Africa, the market became flooded with new stones of gem quality and value of diamonds has dropped dramatically.
It took a massive advertising campaign by De Beers Group, a global leader in the diamond mines in order to stabilize sales and persuade the public to keep their hands on the diamonds they have thus controlling the rate of large stones appear on the market. First, control of supply has been the source, only allowing a certain percentage of the mineral on the market.
This then allows the price to stabilize, because the demand was kept high by a limited supply, large companies can set a nominal value of a final product. For example, the price of a diamond engagement ring of reasonable size should remain at around three months salary.
The other factor that must be addressed was the second-hand market. The De Beers has launched so one marketing campaigns most successful of all time mainly by persuading the public that 'A Diamond is Forever ", which means that rather than ever to sell a piece of jewelry with precious stones in the, it must be preserved as a precious heir business. Starving the market for these antiquities not only stimulated demand for new rock, but increased the popularity and affected the real value of the stone at the point of wholesale.
The trade in blood diamonds, so called does not fall into this category, and where there is demand, there is the possibility of supplying the black market. How these stones differ is that the proceeds of their going into the pockets of the warlords who run the mines. People in areas where mines are little or no money to get everyone, and generally the level of conflict on the product entails bloodshed. To fight against the trade from illegal sources, a system of classification and certification was introduced.
Now, all diamonds are official recorded so they can be traced from source to sale. The stones are cataloged engraved with a laser to identify an expert with a magnifying glass. This goes a long way to ensuring that consumers are unwittingly funding criminal activity, but as with any product on the black market, a limited supply creates another request. Even though diamonds are considered the jewel of the day, there will always be those who are ready to shed blood to take their share of profits.
Posted on January 5, 2010.