Lessons - Avoiding Getting Scammed When Buying a Diamond | Olivia Landau - Founder and CEO of The Clear Cut

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importance of transparency and building trust with consumers when you when you got into that you've been in this industry for a long time so you're obviously very well aware of what's what's good value what's good quality what's what's real what's not in terms of lab-grown but is there in this particular industry because like in all luxury good industries there's a certain amount of fraud is there a significant amount of fraud in this industry or is it not because of GIA and other sort of bodies like that you know I think there's a lot of there's a lot of ways that customers can get taken advantage of but there have been a lot of elements in place to protect customers like GIA certificates I think right now with the lab grown and natural I think there's a lot more fraud going on because it's harder to detect the differences like we have a machine that every single piece of jewelry we make goes through so it can detect if there's any like mixing in like parcels of lab-grown with natural I think you know I've seen a lot of people trade in their natural diamonds for larger lab-grown diamonds which I believe in and of itself is fraud because that jeweler is taking something with value and giving them something bigger that's worth zero dollars and misleading the customer so in terms of fraud I think that's the most rampant thing that's happening and it's I think you know our responsibility as like anyone in the industry that if you're dealing with the consumer directly like it's your responsibility to be honest and upfront but unfortunately that's not not the case a lot of the time so let's talk about let's talk about lab-grown so maybe just give a brief just like a brief explanation as to how they're actually made for people that don't understand and what they are I am curious about why why you feel that they're worthless how they're priced I'm curious about profit like the the points that you can make on a lab-grown versus a natural so let's just go into it and this can be like a master class on you know candlely why not to to buy a lab-grown diamond so like start off with how they're made because I don't even know so basically natural diamonds are formed under the earth's service near camera light pipes can relate to positive over you know in very specific circumstances under high pressure high temperature over billions of years it's kind of like a natural miracle that occurs there are no new diamonds that are being formed all diamonds the natural diamonds have already been formed we're just extracting them so most diamond mines will be depleted in the next 20 or 30 years and some of the largest diamond mines like the Argyle mine Narshalia and a very large mining canada have already been depleted so I think it is a misconception to think they're unlimited supplies of natural diamonds and they're not a rare and finite resource because they are and that's why they maintain value lab grown diamonds mimic this natural formation process but in a laboratory there are two main ways of creating lab-grown diamonds there's chemical vapor deposition CVT or high pressure high temperature HPHT basically you know slight nuances and differences between how to make them most of them come with a carbon or diamond seed and then it is built the lab-grown diamond is built around that and then basically most lab-grown diamonds are mass manufactured right now most of them are being produced in China and in India the rough which is no before the diamond is cut and polished obviously a rough natural diamond looks a very very different than a rough lab-grown diamond lab-grown diamonds are kind of like in these cookie cutter sheets they're cut into these like perfect squares and then they're polished and cut so obviously the inclusions in lab-grown diamonds are going to be very different than natural diamonds because natural diamonds have natural like organic inclusions that you know you can't you can't replicate or they would they're not trying to replicate those natural inclusions but chemically if you're going to go to the chemical level like yes they are chemically the same thing in terms of carbon their growth structures are different there are ways of telling the differences through machinery but if you are looking at your friend's ring and you're not inspecting it you're probably not going to be able to tell the difference the main difference is their mass would you be able to if I'm insisting would you be able to do yes but if I'm just looking at it like like I probably couldn't tell the difference between a real Birken bag and a fake Birken bag if someone was burning it all be there but the main difference is it's a mass manufactured product there's unlimited supply a lot of people have the misconception that it's more ethical or more sustainable which is the fact that is I mean like that bothers me so much because like they use an insane amount of greenhouse gases especially methane it's basically the fast fashion of diamonds once you purchase the edges worth the zero there's zero resale value it's not like they're less value they are completely worthless and it's not going to help those diamonds aren't helping anyone whereas with the natural diamonds like I've been to Botswana I would say three times in the last 18 months and that's one of the locations where most of our natural diamonds are mined from and the fact that an entire country like relies on a natural resource that they have you know have you know used to better like their people and their economy they were one of the poorest countries pre 1960s after independence they found their natural diamond deposits and have used that to become a very wealthy nation every single person in the entire country goes to school for free anywhere in the country through graduate school they free healthcare they've amazing infrastructure and I think that us as Americans which and we are the largest consumers of of diamonds in general we like to think of Africa as one place and it's bad and like their children dying in these minds it's a highly technical operation and you need you know very skilled labor to extract the diamonds it's not like they're like children digging holes so I think that you know we grew up with that narrative of blood diamond but it's really actually doing actual Africans into service to blanket everyone together and just be like well I'm going to buy a lab ground because it's it's more ethical or more sustainable when in fact it's not at all a huge shout out to bank on yourself for supporting today's episode entrepreneurs here's the retirement secret that Wall Street doesn't want you to know while you are pouring everything into growing your business they want you gambling your future in their 401k casino with no guarantees as a business owner you already take enough risks why gamble with your retirement too it is time to discover the financial strategies smart entrepreneurs are using to protect their wealth 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bank on yourself dot com slash Scott and you know and I want to just sort of paint this picture because you are in this industry and you're in this business and several and you have this stance but I want to make sure people understand that this stance is not biased and what I mean by that is I know several of your competitors are probably very happy to just go with the market and to sell lab grown and to make money on it because you can you can make a good margin on lab grown and you can build a good business so it's not like oh I started in natural and that's why I don't like lab grown it's really you you have strong convictions for a reason and it's and it and you could in theory overnight start selling lab under the clear cut and make money on it and and and it could turn right you have the customer base you have everybody set up we have left millions and millions of dollars on the table like the reason why we decided not to sell lab grown when I mean it would have been the easy thing to do to just be like yeah we'll sell lab grown it's like oh you can make so much more money on it because you have like 300 percent margins on lab grown diamonds right now you is that the case is that actually the case when that's how much money you can make on it yeah right now so we we were the first people to launch a free lab grown travel ring to like show the value I'm purchasing lab grown diamonds right now for about a hundred a hundred and fifty dollars per carrot more traveling and these are these are like I so a two-carat diamond would be let's conservatively say like three hundred dollars whereas some of my competitors are selling that exact same diamonds same quality for last year like fifteen thousand dollars maybe now like five thousand dollars so it's an insane margin that's why like the misinformation is really being perpetuated by the industry and a lot of people are like you know what I don't really care about you know my consumer or like the long term you know value of my brand I just want to make money now so you know the reason why we decided not to sell lab grown is because when we first started the whole goal was I will never recommend something to one of my customers that I wouldn't recommend to my best friend or it was built on education and that's something that we felt very strongly that we still wanted to empower our customers and really give them the proper information to make the right types of purchases so it didn't feel right to you know to sell lab grown even though that is the easiest way to make money right now for sure thanks for tuning in if you found this valuable don't forget to hit that subscribe button so you never miss an episode and if you want to dive deeper into this conversation check out the links in the description to watch the full episode see you in the next one