Origin of the Diamond Trade

Today, diamonds are available for purchase bybe a sightholder, a company must commit to buy
anyone who can afford them, but at thea pre-determined quantity of merchandise every
beginning of their history, diamonds were believedmonth amounting to millions of dollars and were
to be owned and adorned only by Royalty andrarely able to reject a parcel of diamonds. From
the super wealthy people in society. How did thisthe sightholders the diamonds are sold either as
gem that used to be exclusive becomecut and polished gems or as rough diamonds to
everybody's gem? This phenomenon started withrough diamond traders who in turn sell them to
a company named De Beers during the earlydiamond manufacturing companies. Manufacturing
1900s in what has become the greatestcompanies cut and polish these diamonds and then
marketing campaign ever created that changedsell them, either directly or through brokers, to
the diamond industry for good.diamond dealers located in major diamond centers
Cecil Rhodes, a young man from South Africa,around the world. The largest diamond centers
started De Beers Consolidated Mines in 1888 bytoday are located in cities such as Antwerp, Tel
buying up claims of small mining companies as wellAviv, Mumbai, and New York.
as properties for diamond mining purposes. ThisAt this point, the dealers sell the diamonds to
came to be after mines and river deposits in thewholesalers who then sell them directly to retail
country became popular for their abundantjewelry stores as loose diamonds or mounted
diamond production. With De Beers, Rhodesjewelry. This multi-layered marketing hierarchy of
became the greatest producer of rough diamondsdiamonds has taken its toll on its affordability so
in South Africa that at its peak, De Beers eventhat many companies started to immediately
managed to control up to 85% of the world'sstreamline their operations by cutting out the
diamond supply. To easily market his diamonds,middlemen and reduce costs. Jewelry
Rhodes established a strong partnership with themanufacturers began buying in bulk directly from
Diamond Syndicate based in London.diamond manufacturers and then sell them directly
Another strategy the company used was toto retail jewelry stores. In the same manner,
eliminate competition, so Rhodes either offeredsome Diamond Dealers began selling directly to
competitors who entered the market to join hisretail stores cutting out the unnecessary
operation or he simply bought them out. Rhodeswholesalers or middlemen.
believed that the only way to maintain the valueToday, the Internet has further cut many people
as well as the price of diamonds was to controlin between as diamond manufacturers are now
its supply. This principle proved to be the greatestselling directly to the consumer through their very
driving factor of the De Beers Empire until theown online jewelry stores.
end of the 1990's.In the next article we'll explore how De Beers
To control supply, De Beers mined the roughlaunched their US marketing campaign as well as
diamonds and sold them once a month to athe ensuing 1980's US diamond market revolution.
handpicked group of buyers called sightholders. To