From the moment a gemstone is extracted from the earth to the moment it is set in a piece of jewelry or displayed in a collector's cabinet, it undergoes a long and complex journey. This journey, known as the gemstone supply chain, involves a number of different stages and stakeholders, each of which plays a critical role in bringing these beautiful and valuable treasures to market.
In this blog post, we will explore the supply chain of some of the world's most prized gemstones, including sapphires, rubies, spinels, tsavorites, and chrysoberyls. We'll start with the first selling point and work our way through the various stages of the supply chain, discussing the challenges and opportunities that arise at each step along the way.
First Selling Point: The Local Market
In many cases, the first selling point for a gemstone is the local market where it is mined. This could be a local trading post or marketplace, where gemstone traders and dealers come to buy and sell stones. In some cases, gemstones may be sold directly to tourists or collectors who visit the area.
For many small-scale miners, the local market is the only outlet they have for their stones. These miners may lack the resources or connections to access larger markets, which means they may receive lower prices for their stones than they would if they were able to sell them to a larger buyer.
Intermediate Markets: Traders and Wholesalers
From the local market, gemstones typically move up the supply chain to larger traders and wholesalers who have access to a broader market. These intermediaries may purchase stones from a number of different sources, including small-scale miners, other traders, and even larger mining companies.
The role of these intermediaries is to aggregate and sort the stones, often by quality and size, and then sell them on to larger buyers such as gemstone dealers, wholesalers, jewelers or retailers. The intermediaries play a critical role in the supply chain by providing a bridge between the miners and the larger market, helping to ensure that stones are valued and distributed fairly and efficiently.
Main Market: Gemstone Dealers and Jewelers
Towards the end of the gemstone supply chain are the main buyers: gemstone dealers and jewelers. These buyers purchase stones in large quantities and often have long-standing relationships with intermediaries and mining companies.
Gemstone dealers and manufacturers typically have the resources and expertise to sort and grade stones with a high degree of accuracy, ensuring that each stone is valued fairly based on its size, color, and quality.
Once the stones have been sorted and graded, they are typically sold on to manufacturers who use them to create finished gemstone products such as jewelry, watches, or other luxury goods. These manufacturers may be based in countries such as USA, India, Thailand, or China, where there is a long tradition of gemstone manufacturing.
End Markets: Retailers and Collectors
The final stage of the gemstone supply chain is the end market, where gemstones are sold to consumers. Retailers such as jewelry stores or online marketplaces sell finished gemstone products to customers.
In some cases, gemstones may also be sold directly to collectors, who may be willing to pay a premium price for rare or unique stones. These collectors may attend auctions or visit specialized gemstone dealers who deal in high-end, one-of-a-kind stones.
The Evolution of the Gemstone Supply Chain
The gemstone supply chain has evolved significantly over the years, driven by changes in technology, globalization, and consumer demand.
The rise of e-commerce has had a significant impact on the gemstone industry, with more and more consumers buying gemstones online. Online sales have made it easier for consumers to access a wider variety of gemstones from all over the world, and has also allowed small-scale miners and artisanal gem cutters to reach a global market.
One of the key advantages of online sales is the convenience it offers. Consumers can browse through a wide range of gemstones from the comfort of their homes, without having to physically visit multiple stores or marketplaces. In addition, online retailers are often able to offer lower prices compared to brick-and-mortar stores, due to lower overhead costs.