Online Diamond Jewelry Shopping – Pros And Cons Of Virtual Inventory Models

Information Overload

Every consumer shopping for diamond jewelry is faced with endless diamond details and combination possibilities. In fact, if you are shopping online you may be seeing the exact same diamond on numerous web sites at different prices, or the identical picture of a ring offered by many merchants at varying price levels. The Internet, while offering consumers so many more choices with in-depth education, has also introduced the concept of “virtual” inventory for merchants. You only need a website, picture and database and just like that you are in business. The barriers to market entry are so low; the Internet is inundated with jewelry web sites to the tune of more than 600,000 online jewelry retailers!

False Branding

For loose diamonds what this means is that most online retailers are all selling the same diamonds. Think of it this way, there is one database where all “wholesale” diamond dealers list their inventory and a price, the online retailer gets a feed of that inventory and presents it on their web site with their mark-up. Thus to differentiate the product, the retailers have developed branding to create the illusion that it is different than what their competitor is offering, so when you see “Signature Collection” or “Premium Cut” realize this is only branding and should have no impact on the price for any given diamond with identical characteristics, the 4Cs are the 4Cs. If you’re planning to make an online purchase of fine quality jewelry, then the differentiating factor to look for is added value of service.

Mass Marketing, Mass Production

For diamond jewelry, virtual inventory is created when wholesale jewelry manufacturers create electronic catalogs and then give them to their retail partners. The retailer’s job is then to mass market the product as best they can; the only differentiator is price. I refer to this jewelry as “mass produced”, typically it is manufactured overseas in large quantities and the quality is typically much lower. And unfortunately like any industry this model is vulnerable to “bait-and-switch.” Consumers should beware of web sites that have limited detail about the product or are vague about the diamond quality, such as using ranges VS-SI or near colorless. In mass produced jewelry the diamond quality is usually very low (I2-I3) and actual metal alloys used can be suspect. Mass produced jewelry has a place in fashion, but has no real long term value. Fine quality jewelry is never mass produced.

Many brand name jewelry manufacturers are resisting the virtual inventory model because of the price dilution and susceptibility to “knock offs.” Shoppers need to beware of web sites with brand name claims that are not commonly available on the Internet.

Made-to-Order Virtual Inventories

Another kind of virtual inventory that is great for the consumer and is growing on the Internet is that of CAD design. This is where a real jeweler develops his/her designs on a CAD design system and renders an image of what the piece will look like. Watch a CAD design video demonstration to learn more. The consumer is able to modify the design if needed and the diamonds and gems are hand selected for highest quality, the precision of this approach results in a superior piece of jewelry.

This virtual inventory, made-to-order model is the most desirable for fine quality jewelry shoppers because they get the best of both worlds, high quality, service from a jeweler and the best price. This is the approach we use at Diamond Design Co.


As with any business model, there are pros and cons to “virtual” inventory. The benefits are obvious; better prices for shoppers due to price competition and lower overhead equals less mark-up. The downside of course is finding trustworthy merchants, sorting through the minutia can be daunting and sometimes frustrating in a crowded marketplace. You can start by eliminating the businesses that don’t offer a full range of services and/or are not jewelers, but just resellers of virtual inventory.

If you are shopping for a fine quality piece of jewelry online, my advice is this; if you merely shop on price then you will get what you pay for. A better approach is to develop a relationship with a merchant who you can trust, who can answer your questions about selecting the right diamond, and who can provide the services you need, like annual inspections, appraisals, and resizing or redesigns. Only companies with staff jewelers can do this well. For more information, learn how fine quality jewelry is made.

Virtual inventories are here to stay; the smart shopper will know how to choose the right online jewelry company and benefit from it.

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