“When lab-grown diamonds first came out, they were priced really high and I couldn’t justify selling them,” recalls jewelry retailer Shelia Bayes. “But as they dropped in price, it became realistic. And at one point, years ago, I had a retailer friend remind me, ‘they’re real diamonds, not synthetic.’ I knew that of course, but it finally hit me—they’re real diamonds. And I thought, ‘Who am I to judge what people want?’ If people want them, I want to have them.”
Now the veteran retailer carries both natural and lab-grown diamonds in her store, Shelia Bayes Fine Jewelry, in Lexington, Ky., and is the founder of Gem + Jewel, an online jewelry platform that recently debuted a wholesale lab-grown B2B diamond marketplace for independent jewelry retailers and wholesalers (The Zing Report and Gem + Jewel are both owned by Jewelers Mutual Group).
Bayes has not only found that she’s selling more lab-grown diamonds every year—she’s also been advising fellow retailers that, when bought correctly, “you can get margins on lab-grown diamonds like we haven’t seen since the ’80s. It’s a huge new avenue of profitability.”
We asked Bayes about her journey with lab-grown diamonds (LGDs) and her best advice on how to stock and sell them in-store.
How did you become so interested in lab-grown diamonds?
Because I’m always looking for vendors for myself and other retailers, I did this deep dive into lab-grown diamonds. I started connecting with producers in Hong Kong, in India, and other places. I was constantly comparing the prices I could get to those that I found online. I want to know what my competition is doing. It’s so amazing how much lab-grown has grown; a year ago they made up probably 10% of our business, and now they make up over 60% of our diamond sales. And that’s great—the price points are lower, but the margins are higher.
Here’s how I feel about it: If your customers don’t get their diamond from you, they’re going to go online to get it. This is what they need, so you need to have it. And everyone knows that if you can get that new engagement ring customer, you can have that customer for life.
What is the potential downside for retailers who don’t sell LGDs?
People’s trusted resource for jewelry is their local retailer, and if their local retailer is not making them feel comfortable about shopping lab-grown diamonds, that will lead them to the big online players that have totally embraced lab-grown diamonds and doing great business with them.
You’ve been embracing LGDs for so long, but did your staff take to selling them right away?
The funny thing is they were slower to embrace them than I was! But in general, I’ve taught my staff that when someone comes in to buy someone, we need to treat them with respect and dignity and let them make decisions on what they want to purchase. It’s kind of like the golden rule—that’s the approach I took with selling lab-grown diamonds.
Who’s been buying LGDs in your store in Lexington?
I have seen an age gap in people who are embracing them. People in 20s and 30s are totally embracing them. But the older they get, the more they want mined diamonds.
How does the lab vs. natural sales dialogue go for you in-store?
We try to tactfully bring it up, so people don’t have any uncomfortable feelings about anything. We’re getting more people in asking for labs, and if I can tell there’s some hesitancy, I just say, “just so you know we have lab grown and natural.” I want them to buy something that they love.
My close friend’s daughter was engaged recently, and I met with the couple, and we were talking diamonds; the bride wanted an emerald-cut diamond with emerald-cut side stones. We were pricing both lab and mined diamonds and she said, ‘I’m so happy you brought up lab-grown diamonds.” She was relieved. And they ended up getting a 3ct. emerald cut lab-grown diamond in a platinum setting. And we did it all for around $10,000.
What’s made it difficult for retailers to find LGDs in the near past?
It’s hard to find a single source that’s well-priced and easy to shop. It’s been really hit or miss.
How does Gem + Jewel make the process of buying lab-grow diamonds easier?
We give retailers a place where they can buy lab-grown diamonds and feel good about what they’re paying and what they’re getting. Gem + Jewel is owned by Jewelers Mutual and it’s a trusted resource. Literally, we have hundreds of diamond dealers from all over the world represented on the site to supply diamonds to every independent retailer who wants them. It’s a strictly B2B platform and its allows both retailers and wholesalers to buy lab-grown diamonds at price that makes them competitive with online brands. We don’t need consumers going to an e-tailer. We need them coming into our store and buying from us.