Death of the online diamond site in Australia ?

The early to mid-2000 proved to be the heyday for Australian diamond selling sites. At its peak, there were a few major re-listing sites – MDX or diamond exchange, Diamond Specialist‎, Wholesale Diamonds and Jogia amongst others.

Diamonds sold by these sites in Australia originally competed with chain stores and high end retailers. Nowadays, the popularity of these sites has dramatically declined.   

At least one of the aforementioned sites has been liquidated and reopened under new ownership, but not before taking millions of dollars from customers and suppliers around Australia.

The reasons for this decline is not because of the quality of the diamonds, which are generally just same diamonds re-listed off Rapnet or other industry platforms. BUT as the diamonds are not owned only offered by these sites and merely re-listed at varying mark-ups. Consumers have caught on to the methology. 

Also feeble attempts at simulating a type of cut by using the words “Fire” in the brand name hasn’t been successful in fooling discerning public into thinking it’s an actual brand like “Hearts On Fire”.

Most of these sites simply don’t market their services well enough. It’s one thing to set up a site with fancy looking pictures and logos, but it’s another thing to build trust with consumers. One site is the same as the other, with all the same diamonds. Professionally designed pages with shiny graphics, international recognition, pictures of bogus marketing equipment and numerous media links were part of a superior marketing strategy that built trust with consumers.  At one stage, MDX looked like becoming the Australian version of BlueNile.com. However, their marketing strategy was perhaps too good - it alienated a lot of wholesalers, retailers and jewellers, not because they were wrong, but because of the way they priced the diamonds. Eventually, a series of mis-steps on their part set in motion their bankruptcy.

The rise of www.bluenile.com is commonly cited as the main reason for the decline of Australian local sites. The reason behind this is that consumers are at least looking to the internet to research, and buying a diamond or diamond jewellery and 99% of the internet sites will be cheaper and better without any question. Secondly, Blue Nile’s expansion has allowed a massive decrease in turnaround times In the US and around the globe including Australia. That meant a diamond manufactured and listed only on the Blue Nile today could be on your finger in five to seven days. 

Lastly, for the most part because Australian sites simply re-listed the same diamonds and didn’t innovate or create a point of differentiation, they are simply compared on value added costs. 

Whilst Blue Nile only list goods which are made available by the factories to the company, and nowhere else, The rest of the sites list diamonds off a common data base. Simply their only differences are the margins added to their prices. 

Australian sites could have done better, but unfortunately, like sheep followed each other by simply re-listing someone else’s diamonds, which from a consumer’s perspective, is possibly is the worst way to buy. 

Whilst Australian diamond listing sites still exist, some are a shadow of their former selves. Even though overseas diamond sites now dominate the industry, these sites play diminishing role in diamonds.

In Australia there are two sites where the diamonds listed belong to the site owners, they are GP Israel and Diamond Imports.


Source: Diamond man USA