Cost of a Carat — What Goes Into Pricing a Diamond?

Cost of a Carat — What Goes Into Pricing a Diamond?

When you buy a diamond engagement ring, you’ll want a stone that’s stunning, eye-catching, and timeless. The stone is the most prominent part of the ring — and often the most valuable. But what goes into that price tag?

A Substantial Markup — at Other Jewelers
Most jewelers source diamonds in large numbers from diamond mining companies, then make them into rings that you buy straight from the store. Since they acquire the diamonds at such low cost, they make a lot of their money by adding markups of anywhere from 45 to 75 percent!

At acredo, we only source our rings from RJC-certified sources, so we know that all of our gems are mined, cut, and shipped responsibly. We don’t source bulk diamonds from operations that use exploitative labor practices, unsafe chemicals, or environmentally damaging shipping practices.

We also don’t want to break your budget by charging you a huge markup on the central stone in your ring. We know that a ring is a significant purchase, and we want you to get the best possible ring for your budget. At acredo, you’re not paying for a markup — you’re paying for the premium materials and expert design that make your ring truly one of a kind.

The Four C’s — Color, Clarity, Cut, and Carat
The 4Cs system of diamond quality was created by the Gemological Institute of America (GIA) as a universal standard of diamond quality. The 4C system is now accepted worldwide — diamond quality can be communicated in any context and diamond customers know exactly what they’re getting.

Carat Weight
A carat is a unit of weight used to measure gemstones, equivalent to 200 milligrams. Most stones are measured to the nearest hundredth of a carat, also called “points.” A 0.25-carat diamond might be referred to as a “25-pointer.”

Generally speaking, larger diamonds are more expensive. That number goes up substantially with larger stones — diamonds are cut from rough stones, and large rough stones are hard to come by. But size isn’t everything. The other three of the 4Cs are also very important.

According to the Gemological Institute of America (GIA), the world’s leader in diamond and gemstone grading: The color evaluation of most diamonds is based on the absence of color. A chemically pure and structurally perfect diamond has no hue, like a drop of pure water, and consequently, a higher value.

The GIA’s color scale starts at D for a completely colorless diamond, all the way to Z for a “light” colored diamond. The color of a stone can be hard to detect with an untrained eye, so diamonds are compared to “master” stones under controlled lighting and viewing conditions to ensure that grading is consistent.

Why start at D? Before the GIA system was established, some grading systems used words like “river” and “water” to describe perfect diamonds. Others referred to the provenance of the diamond, like “Cape” for diamonds from the Cape of Good Hope region. Still other diamond grading systems referred to “A” and “AA” stones. When GIA developed a system, they didn’t want there to be any confusion between their highest grades and those of other companies, so they started at D rather than A.

Diamonds are created deep in the earth, when carbon is subjected to enormous amounts of heat and pressure until it crystallizes. During the process, the crystallized carbon can take on small impurities and blemishes, also referred to as “inclusions.” These inclusions vary greatly, and can look like small black or white specks, clouds, or feathers.

In a small stone, these inclusions can be very difficult to spot without the trained eye of a master gemologist, but they disrupt the light-refracting properties of the stone, resulting in a less brilliant diamond.

The GIA scale uses six categories, ranging from “Flawless” to “Included” and divided into a total of 11 specific grades, to assess a stone. Flawless diamonds contain no visible blemishes, even under 10x magnification, and are therefore the most valuable.

The final aspect of a diamond’s quality is cut: the intricate, faceted shape that the stone is cut into. The reason diamond sparkles like no other substance on earth is its refractive index — the angle at which light bends when it hits a transparent substance. Diamond’s refractive index is extremely high, scattering light from any source into its component colors for a brilliant display of light.

The way that the angles of the stone interact is crucial to the appearance of the stone — even the slightest imperfection or asymmetricality can lead to dark spots or bland colors when the stone is exposed to light.

There are three major components that are assessed when it comes to cut:
  • Brilliance — the internal and external white light that a diamond reflects when it’s lit
  • Fire — the way a diamond’s shape scatters white light into all the colors of the rainbow
  • Scintillation — the light and dark areas in a stone that produce a diamond’s signature sparkle.
  • Another four considerations — weight ratio, durability, polish, and symmetry — refer to the shape of the stone itself and assess the craftsmanship of the jeweler that cut the stone in the first place. When each aspect of the stone’s cut receives an “excellent” grade, it will create the maximum sparkle.

Making an Informed Decision
The more you know about how diamonds are graded, the better you know whether you’re getting a good value. A 1-carat round diamond with J-K color and I2-I3 clarity might cost as little as $1,300, while a diamond in the same size and cut, with D color and FL clarity could go for more than $16,000.

If you’re on a tight budget or you’re shopping for the smaller accent stones that go alongside your main stone, then flawless quality and color might not be as important as the cut and weight. But if you’re buying a solitaire ring, where the main stone is front and center, then quality is paramount.

The most important thing is that you know what you’re buying. At acredo, we’ll walk you through the cut, color, clarity, and carat weight of every stone that goes into your ring, making sure that it matches your imagination, your style, and your budget. Our top priority is ensuring that your ring is just like you — one of a kind.