The vibrance, passion, and hues emulated by colored gemstones pales the typical diamond. Why wouldn’t every individual want a gemstone that would portray their own unique personality and passion for life? To find out more on colored gemstones, come along with us as we explore the history, market, and folklores and include the many beautiful ways you can "Light up your life with Color!".

There is a lot of interesting history on gemstones. In addition, colored gemstones are much more rare and unique than diamonds. However, there is some confusion and misunderstanding about the market and value of colored gemstones, due to the fact that there is little education and overall promotion of colored stones.

The history of colored gemstones dates back to 5300 BC. Gemstones were used for everything from medications and magic to expressing emotions. Gemologists began the practice of cutting stones, but full appreciation of them did not evolve until the science of mineralogy was developed, and the unique distinctions between numerous colored gemstones could be realized. The earliest available evidence of gemstone usage came from Spain and South West France around the ice age period. During this time man used bone, horn, ivory, and stone to carve out pictures of their surroundings. Even prior to this, man (or manlike creatures) worked with special pieces of stone which were highly valued. Since this time man has been fascinated with the beauty of gemstones and used them to satisfy many purposes including personal adornment, investment, symbols of power, and gifts.

The emerald is the most ancient recorded gemstone. The hills of Jebel Zabarah in Upper Egypt contain signs of excavation and tunnels which indicate evidence of ancient mining dating back to 1650 BC. In the early 1500’s Spanish conquerors first learned of emeralds when they were presented by the natives of Colombia as gifts. By this time emerald mining was an ancient occupation in the New World, this was evident by a prehistoric grave excavated in Ecuador that yielded a worked emerald.

An interesting aspect of colored gems is the tales or folklore’s that are associated with each stone. For example the sapphire is said to have a biblical connection. In, "The Gem Kingdom", they noted that the engraved tablets of Moses came from sapphire not from stone. Ancient Kings and Priests wore sapphire around their necks to protect them from evil. The sapphire was also believed to protect the wearer from envy and attract the favor of God. A recent, and very publicized use of the sapphire, was as a wedding stone in Princess Diana’s engagement ring. This ring has a large sapphire surrounded by smaller diamonds. This choice could have been due to the belief in the lore that states that the "sapphire refuses to shine when worn by the wicked or impure" in addition to the tale that the luster of the sapphire would be dimmed if one’s spouse had been unfaithful (http://ksc9.th.com/sonnysaw/index7.html).

Other stones and their tales include the peridot, opal and topaz. Peridot was said to be favored by pirates, because they were "powerful emulates against evil". Apparently when the peridot stone was set in gold it protected the wearer from the "terrors of the night". The opal has been said to represent hope, innocence and purity through the ages. In the Middle Ages, young, fair-hared girls wore opals in the hair to protect its lovely blond color. "Topaz holds the distinction of being the gemstone with the widest range of curative powers. It supposedly cooled tempers, restored sanity, cured asthma, relieved insomnia and even warded off sudden death. It proved the loyalty of associates by changing color in the presence of poison." (http://ksc9.th.com/sonysaw/index7.html)

The custom of relating a gemstone to a birth month is fairly recent. As early as the eighteenth century, Jewish people began an active interest in choosing a particular stone to represent a month. Early Jewish cabalist wore twelve stones on their high priestess breastplates which are believed to represent twelve mystical angels. These gemstones also related mystically to the twelve months of the year, twelve parts of the body, and the twelve hierarchies of devils. St. Jerome, at the beginning of the fifth century AD, brought together the idea of relating these twelve gemstones, of the breastplate, to the birth month and twelve signs of the zodiac. Although the twelve "birthstones" were not formally established at that time, individuals would choose stones based on the perceived powers they believed the stones emulated. For example, if a person wanted wisdom, they would choose coral; or to guard against deception they would choose bloodstone. Gradually through time the tale of each power, as it related to each stone, diminished and the emphasis changed to wearing the colored stone that represented your birth month.

The whole gemstone industry is controlled by DeBeer’s who’s major focus is the promotion of diamonds. DeBeer’s currently controls 80% of the diamond industry, and is able to control the gemstone market by utilizing the typical characteristics of a cartel, especially throughout the use of a buffer stock and site buying. These two aspects enable DeBeer’s to control which and how much wholesalers can purchase. Furthermore, they use an elaborate and costly marketing campaign to create a pull market. This has produced an extensive slant in the gem buyer’s purchase towards diamonds.

DeBeer’s spends anywhere between 70 and 100 million dollars on marketing it’s diamonds. The GIA plans on spending 300 thousand dollars marketing stones of color in 1997. Therefore, due to the advertisement bombardment from DeBeer’s consumers are under the impression that diamonds are the preferred gemstone. In reality, many colored gemstones are much more rare and mysterious, which should make them more desirable. If it were not for DeBeer’s total control of the gem industry, many colored gemstones would carry a greater economic value because of their smaller supply and uniqueness. Colored gemstones have an intrinsic value, they have and hold a true price in the market, unlike diamonds who’s price is manipulated by DeBeer’s ebb and Floods to the gem market.

Gems are found all over the world. Our first assumption had been that they were mostly found in Africa. We discovered that gemstones are mined from Brazil to Thailand. Colored gemstones are rare and usually discovered in small amounts in a wide variety of locations throughout the world. For example, in Ethiopia peridot is found in "basalt balls which are scattered around the desert plain"

(http://www.gemstone.org/95mining1.html). We think the misconception of how gemstones are mined and where they are found is prevalent among consumers.

Finding the actual size of the colored gemstone market was difficult. It is possible that this is due to the disagrigate information relating to this topic. However, we were able to obtain some figures regarding the United Sates (US) market over the last five years. According to the Gemstone.org website, the US has the most demand and largest consumer market of all gemstones, consuming 37% of the worlds carat weight. Unfortunately, these studies do not differentiate between the diamond market and colored gemstone market, they put these two very different industries together as one.

The importation and consumption of polished colored gemstones has been steadily increasing over the 1991-1996 period that was studied. The experts predict that it will double in the next five years.

Comparing the rest of the world market to the US, we found a sharp contrast between Japan and Europe’s consumption and the consumption of the US. Japan and Europe imported less carat weight (by 9% and 22% respectively) than the US, but spent more money on the quality of the stones they imported. This tells us that the US market is more quantity, and possibly variety based, in their marketing of colored gemstones. This evidence and concluding theory would coincide with our differences in culture and values regarding possessions.

There are new discoveries being made of colored gemstones and mines which are bringing new life to the market. It seems that the colored gemstone industry has quite a lot to look forward to with the discovery of new stones, such as the new color change garnet from Sri Lanka. However, the ever present gem giant De Beer’s has only the typical diamond to offer. One color, one element, and one supply, that is controlled by them.

Each stone is classified prior to reaching the retail market. This is done by running each stone through equipment which tells what properties it is comprised of. Precious stones consist of diamonds, rubies, sapphires, emeralds, and natural pearls. All other stones are referred to as semi-precious. Debbie Hiss from the Gemoligical Institute Association states that the purpose for the two categories was established hundreds of years ago when countries established tariffs on imports and exports. Precious stones had a higher tax rate than semi-precious stones. Today jewelers are instructed to refrain from the use of these two terms because consumers tend to place value upon them. For example, because semi-precious stones are not listed in the same category as precious stones, then a consumer will perceive it holding a lesser value. Debbie Hiss noted that there is an optimum color for every stone, but you should find the best color for you. Retailers shouldn’t sway you on color purchase you should be an individual when it comes to purchase, just like the stone itself.

The North West typically sells the big three: Emeralds, Rubies, and Sapphires. Although other stones are sold here, these three are sold in much larger quantities due to their popularity. Local jewelers rank the types of jewelry sales of colored stones first as rings, second as earrings, and lastly as pendants. Pieces of colored stones are shown in a variety of ways from pre-mounted rings, earrings, pendants, and bracelets, to loose, either in trays or individually in small containers. Loose stones are found in predominately privately owned stores because they have the ability to customize jewelry, and are able to travel and purchase colored stones at a significant savings.

A major concern of consumers about purchasing gemstones is their value retention. Barry Whittle stated that gemstones have never decreased in value. The wholesaler or stone dealer has never seen prices decrease, but consumers do not believe that gemstones will hold their value as well as diamonds, even though many gemstones are more rare than diamonds. Obtaining pricing information in the gemstone industry was one of our most difficult task. Many jewelers would inform us that diamonds and gemstones were priced on cut, clarity, carat weight, and color, but beyond the most basic information jewelers were very reluctant to discuss pricing, even Roger Frost and Barry Whittle were hesitant and apprehensive about discussing price. We were able to speak to one wholesaler who did speak candid about prices and price information.

An anonymous wholesaler with over 20 years experience informed us that during the 1980’s the standard markup in a retail jewelry ( Zales, Ben Bridge, or Weisfield’s) store was 300%. If the jeweler spent $1000.00 on a ring, then that jeweler would price the ring at $3000.00. That is why jewelry stores can advertise 50% off sales and still generate profit ($3000.00 - 50% or $1500.00 = $1500.00). Today jewelers, retailers and wholesalers, are more willing to negotiate the price of jewelry and many set there bottom line price at 2.2 or 220% ($1000.00 * 2.2 or 220% = $2200.00 ). The reason that jewelers have lowered their markups and bottom line prices is because of the increase in the numbers of retailers and wholesalers in the gemstone industry.

After speaking to fifteen different retailers, wholesalers, and stone dealers we realized that besides diamonds, there are no clear cut ways to determine the value of a colored gemstone. A few jewelers we spoke to informed us that it is difficult to be consistent from one appraiser to another. One appraiser might state the value of a one carat blue topaz at $2500.00 and another would say the stone is worth $1800.00. This is a problem that gemstone dealers need to rectify. The colored gemstone dealers need to develop color and clarity scales similar to the ones used in the diamond industry.

Flawless VVS1 VVS2 VS1 VS2 SI1 SI2 I1 I2 I3

Invisible To Unaided Eye Visible To Unaided Eye

D E F G H I J K L M N O P Q R S T U V W Y Z

Through our pricing research we learned that gemstone and diamond prices are determined by using the "4 C’s", but there are a two other factors that can effect the price of a particular stone. First, how and where the gems are purchased. Two of the jewelers we spoke to said that by the time a stone reaches a jewelry store it has been handled by approximately ten different people, each who has added their own markup. One of the jewelers David Fiske eliminates four to six different handlers by traveling to the gemstone mines throughout the world. David’s prices will remain relatively close to his competitors, but profit margins will be higher.

Out of the established ninety-two colored gemstones only three are within the pricing range of diamonds, rubies, emeralds, and sapphires. All other gemstones are priced well below this range. Lack of pricing information and pricing standardization is one of the factors we think has hurt the colored gemstones industry.

The promotion of colored gemstones has been left up to the individual retailer in the jewelry industry. There is little advertisement, yet any that is done is accomplished via the push strategy. What advertisements are out in the market are generally photos in magazines or radio commercials. A new emergence of promotion has been through television shopping. QVC and HSN have recently broke into the gem market with their direct visual marketing of colored gems and diamonds. However, very rarely do you see a typical television ad. If there is one it usually comes on around the Holiday season, and is generally promoting diamonds as well as colored stones.

Another emergence is gem promotion on the internet. Shopping through the internet has become a very big industry. We visited the "Jewelry Mall" and received a list of Jewelers home pages categorized by average price of store items. This was a very interesting and informative site, which directed us to the individual found retailers. However, once we visited individual sites we uncovered a plethora of information, from education to a variety of styles and stones for sale. The most important aspect of shopping via the internet is knowing your product. If you know what type of gem you want and exactly what budget you are shopping with you can successfully maneuver your way through the internet. Although if you are not knowledgeable about colored gemstones you could easily get confused and frustrated with the purchase process.

Jewelers can promote gems through brochures, but the stores that we visited did not use this tool wisely. We had to ask for brochures, or if literature was displayed it would be found behind the counter, which makes it difficult for the consumer to obtain. We concluded that brochures must be a rather expensive marketing tool for the gem retailer, otherwise they would be more interested in promoting this way.

There is very little excitement drummed up by this industry and even less knowledge conveyed to the end consumer. Because of these two reasons there is a stigma attached to the purchase of colored stones. One myth that promoters have to combat is the "fake factor" and economic value regarding colored gems. For the most part consumers have a fear of buying a stone and "losing" money or finding out that they have been duped and purchased a fake stone. This problem is due to the fact that there are no standards set to benchmark or comparison shop when it comes to these particular jewels. How could there be? Each colored gem is an individual, there are no two gems that are alike, even within the family and species of a particular gem. In reality this is the same for diamonds, yet with the knowledge and promotion that has been brought forth to the public via DeBeer’s there is less mystery, fear, and timidness when people purchase diamonds these days. In addition, there has been a reputation of prestige and status associated with the wearing and purchase of a diamond.

Regarding the structure and placement of this product we have found that there are wholesalers, stone dealers, retailers, and departments stores, as well as internet direct sites and home shopping networks(TV). The distribution channel is varied when it comes to gems. Once the stone is mined it generally goes to a wholesaler and from there it is possible that it is handled by several wholesalers, independents and retailers alike. One example of a stones birth into the market as told to us by a wholesaler that we visited is :

• Mine
• DeBeer’s
• Lot purchase
• Stone cutter
• Stone dealer
• Swiss wholesaler
• American wholesaler
• Retailer
• Customer

Stones are not a typical consumable item. The path a stone takes from mining to customer has many variations, there is no standard distribution channel in the gem stone industry.