5 ms·

We need a Warby Parker for Diamonds! 1. Oligopoly market structure CHECK 2. Insane gross margins CHECK 3. Opaque and misleading product naming CHECK 4

We need a Warby Parker for Diamonds! 1. Oligopoly market structure CHECK 2. Insane gross margins CHECK 3. Opaque and misleading product naming CHECK 4. Expensive distribution through unpleasant channels CHECK CHECK CHECK

qq66 14y ago
The problem is that a diamond is inherently a basically worthless rock, so its retail value is already a figment of the public's imagination. Blue Nile is the closest that exists today, but they are not that disruptive since the retail channels already have lots of competition -- it's the supply (De Beers) that's monopolized.
- rom16384 14y ago
  Another approach to disrupt that market is to grow the diamonds like Gemesis does, http://en.wikipedia.org/wiki/Gemesis http://en.wikipedia.org/wiki/Gemesis
- MartinCron 14y ago
  The real disruption will come in the form of widely available manufactured (not mined) diamonds. I used to think of diamonds as basically worthless rocks, until I went shopping for an engagement ring stone and looked at them under the jeweler's microscope, and thought "I want to be dressed from head to toe in these things". With mass-produced diamonds, that may become a reality.
  - qq66 14y ago
    Yes, they're nice to look at, but unlike, say, emeralds, they're not very rare -- they're simply controlled by a monopoly supplier. Manufactured diamonds will bring back a competitive supply which would exist if there was a healthy assortment of companies in the diamond mining industry today. I do question your judgment in wanting to cover yourself head to toe in diamonds :) Do you also want to drive this car? http://www.diamondvues.com/2007/04/check_out_this_diamond_studded.html http://www.diamondvues.com/2007/04/check_out_this_diamond_st...
    - MartinCron 14y ago
      No. I wouldn't drive a diamond-studded SL. I would prefer the more modest SLK, actually.
itsprofitbaron 14y ago
No. There shouldn't be a Warby Parker for Diamonds. Sure there are services like BlueNile etc but they're nothing like a Warby Parker for Diamonds. Diamonds are bought, not because of what they are but what they represent. The whole point of diamonds is to capitalise on what they're representing rather than their actual worth. Their value is created through the likes of "diamonds are a girl's best friend" which is why the price is high for them. Hence the advertisements have been developed around the whole perceived value of diamonds ala. "diamond's are a girls best friend" because when you present a woman with a diamond you're presenting her with a promise - a promise that you will look after & take care of her. Which is something that most women want.
- MartinCron 14y ago
  Imagine if the cultural norm went from spending a lot on an expensive diamond where the money went to a textbook evil corporation to spending much less on a cheap manufactured diamond of higher quality and donating the difference to the charity of the lady's choice.
  - itsprofitbaron 14y ago
    It would require an incredible amount of ad spend to change cultural norms which have been created by advertisers over generations. The chances of it happening are miniscule, and the startups who are attempting to do it would go bankrupt several times over before it was even close to being achieved. It actually reminds me of a Warren Buffet Quote “If you gave me $100 Billion and said, ‘Take away the soft-drink leadership of Coca-Cola in the world’, I’d give it back to you and say it can’t be done”
    - MartinCron 14y ago
      It's definitely more of a John Lennon kind of "Imagine" than a Steve Jobs kind of "Imagine". I like the Warren Buffet quote, though. Thanks for sharing it.
    - eru 14y ago
      $100 Billion is more than half the market capitalization of Coca-Cola. So for that amount of money, one might be able to buy considerable influence with the company (e.g. via voting rights that come with stocks), and run it into the ground. Of course, he's probably talking about using the $100 billion to build up a competitor, and make some money.
niggler 14y ago
Nice little history on Diamonds (and why trying to disrupt that market is incredibly difficult): http://www.theatlantic.com/magazine/print/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/ http://www.theatlantic.com/magazine/print/1982/02/have-you-e...
- melvinmt 14y ago
  Wow, one of the best articles that I've read in a while. Thanks.
antidaily 14y ago
And where are the flawless manufactured diamonds Wired featured 8 years ago?
- dminor 14y ago
  I bought my wife's engagement ring from them, but sadly they are no more: http://en.wikipedia.org/wiki/Apollo_Diamond http://en.wikipedia.org/wiki/Apollo_Diamond
jcampbell1 14y ago
Bluenile.com does this, and is successful. Of course they only solve the unpleasant distribution, and misleading product naming issues. They saw the problem of slimy sales tactics and gouging in the diamond business and fixed it.

qq66 14y ago

The problem is that a diamond is inherently a basically worthless rock, so its retail value is already a figment of the public's imagination. Blue Nile is the closest that exists today, but they are not that disruptive since the retail channels already have lots of competition -- it's the supply (De Beers) that's monopolized.

rom16384 14y ago
Another approach to disrupt that market is to grow the diamonds like Gemesis does, http://en.wikipedia.org/wiki/Gemesis http://en.wikipedia.org/wiki/Gemesis
MartinCron 14y ago
The real disruption will come in the form of widely available manufactured (not mined) diamonds. I used to think of diamonds as basically worthless rocks, until I went shopping for an engagement ring stone and looked at them under the jeweler's microscope, and thought "I want to be dressed from head to toe in these things". With mass-produced diamonds, that may become a reality.
- qq66 14y ago
  Yes, they're nice to look at, but unlike, say, emeralds, they're not very rare -- they're simply controlled by a monopoly supplier. Manufactured diamonds will bring back a competitive supply which would exist if there was a healthy assortment of companies in the diamond mining industry today. I do question your judgment in wanting to cover yourself head to toe in diamonds :) Do you also want to drive this car? http://www.diamondvues.com/2007/04/check_out_this_diamond_studded.html http://www.diamondvues.com/2007/04/check_out_this_diamond_st...
  - MartinCron 14y ago
    No. I wouldn't drive a diamond-studded SL. I would prefer the more modest SLK, actually.

itsprofitbaron 14y ago

No. There shouldn't be a Warby Parker for Diamonds. Sure there are services like BlueNile etc but they're nothing like a Warby Parker for Diamonds. Diamonds are bought, not because of what they are but what they represent. The whole point of diamonds is to capitalise on what they're representing rather than their actual worth. Their value is created through the likes of "diamonds are a girl's best friend" which is why the price is high for them. Hence the advertisements have been developed around the whole perceived value of diamonds ala. "diamond's are a girls best friend" because when you present a woman with a diamond you're presenting her with a promise - a promise that you will look after & take care of her. Which is something that most women want.

MartinCron 14y ago
Imagine if the cultural norm went from spending a lot on an expensive diamond where the money went to a textbook evil corporation to spending much less on a cheap manufactured diamond of higher quality and donating the difference to the charity of the lady's choice.
- itsprofitbaron 14y ago
  It would require an incredible amount of ad spend to change cultural norms which have been created by advertisers over generations. The chances of it happening are miniscule, and the startups who are attempting to do it would go bankrupt several times over before it was even close to being achieved. It actually reminds me of a Warren Buffet Quote “If you gave me $100 Billion and said, ‘Take away the soft-drink leadership of Coca-Cola in the world’, I’d give it back to you and say it can’t be done”
  - MartinCron 14y ago
    It's definitely more of a John Lennon kind of "Imagine" than a Steve Jobs kind of "Imagine". I like the Warren Buffet quote, though. Thanks for sharing it.
  - eru 14y ago
    $100 Billion is more than half the market capitalization of Coca-Cola. So for that amount of money, one might be able to buy considerable influence with the company (e.g. via voting rights that come with stocks), and run it into the ground. Of course, he's probably talking about using the $100 billion to build up a competitor, and make some money.

niggler 14y ago

Nice little history on Diamonds (and why trying to disrupt that market is incredibly difficult): http://www.theatlantic.com/magazine/print/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/ http://www.theatlantic.com/magazine/print/1982/02/have-you-e...

melvinmt 14y ago
Wow, one of the best articles that I've read in a while. Thanks.

antidaily 14y ago

And where are the flawless manufactured diamonds Wired featured 8 years ago?

dminor 14y ago
I bought my wife's engagement ring from them, but sadly they are no more: http://en.wikipedia.org/wiki/Apollo_Diamond http://en.wikipedia.org/wiki/Apollo_Diamond

jcampbell1 14y ago

Bluenile.com does this, and is successful. Of course they only solve the unpleasant distribution, and misleading product naming issues. They saw the problem of slimy sales tactics and gouging in the diamond business and fixed it.