If you like the look of diamonds, but need something less expensive, Moissanite might be the perfect fit!
How much cheaper is moissanite than diamond? A one-carat diamond with reasonable cut, color, and clarity will typically sell for $4,000 to $5,000 or more. A Moissanite of similar size and quality will typically sell for about $600. That’s a savings of at least 85%. Total savings of 90% are actually very common when buying Moissanite over Diamond.
Moissanite looks very similar to diamond and it’s also an incredibly hard stone. So, why would it be so much less expensive? Six key reasons for the substantial price gap are outlined below.
The Current Cost Gap for Diamonds and Moissanite
The cost difference between Diamonds and Moissanite is significant. In fact, I just checked with a well-respected diamond retailer that typically offers very competitive pricing. If I’m looking for a mined diamond that is a ‘G’ or better for coloring, a VS1 or better for clarity, and a ‘Very Good’ or better for cut, the least expensive diamond that they offer right now is $5,490.
A 1 carat (6.5 mm) Moissanite stone, with characteristics that are similar to the diamond mentioned above, costs about $600. That’s an 89% savings, totaling $4,890! Getting married is often an expensive proposition. Between the reception, the cake, the dress, the honeymoon, and much more—the costs pile up fast. If you can save almost $5,000 on your ring while still getting something that’s beautiful and durable (that looks very similar to diamond), you may be able to more easily cover all of the OTHER expenses that are also important components of your special day.
Six Key Reasons that Moissanite is Cheaper than Diamonds
First, What’s NOT to Blame: Production Costs
Diamonds are most commonly exhumed from the earth through mining operations. It’s estimated that 1750 tons of earth has to be excavated, on average, for every carat that’s found. While much of the work can be done with assistance from dynamite and large earth moving machinery, a great deal is still manual labor with picks and shovels.
On the surface, it’s easy to dismiss the high cost of diamonds as a simple function of the costs associated with finding and mining a diamond. When you look into the public record reports of industry giants, it’s often shocking just how low those costs actually are. After all, labor is incredibly inexpensive in most locations where these operations are taking place.
In 2015, De Beers released information showing that their average cost per carat had fallen from $111 the prior year to just $104! Remember the retail price on that 1-carat diamond that I mentioned above ($5,490)? Where is the other $5,387 going? It’s obvious that mind diamonds enjoy incredibly healthy profit margins! Costs may be a little higher for some producers, but this is probably a good ballpark representation of production cost for most mined diamonds producers.
Moissanite is a natural stone, but it’s so scarce that 100% of all Moissanite being used for rings is laboratory grown. Moissanite manufactures don’t publish their production costs, so it’s unclear how much lower they actually are than the cost of mining a diamond (if at all), but it’s clear that while production cost might account for a very small part of the cost difference between these two stones—it only has a minimal impact because diamonds are relatively inexpensive for the large mining companies to acquire.
Think about it this way, if diamonds typically cost about $104 per carat to mine (as noted above), and Moissanite only costs $4 per carat to produce (which it doesn’t … just using easy numbers for illustration purposes). That’s a large production cost difference ($100)—but not nearly as large as the price difference when they’re sold at retail (thousands and thousands of dollars). That’s how we know that production cost isn’t a big factor. We know what diamonds cost to produce, and while we don’t know exactly what it costs to produce a comparable Moissanite, it can’t be less than $0 … so the production cost gap can’t be large enough to explain the large gap on the retail end.
So if production cost isn’t the thing that makes diamonds so much more expensive, what is?
Reason #1: Moissanite Doesn’t Have Collusion or Artificial Scarcity
Folks in the diamond industry, often point to the rarity of diamonds as one of the major reasons that they are better and more valuable (in their eyes) than quality simulant stones like Moissanite. They point to the pricing trends for diamonds, over many decades, as evidence of their rarity and value.
In reality, the rarity of diamonds is mostly contrived. It’s about as real as WWE wrestling (sorry for the spoiler, if you’re a fan that didn’t know yet)!
Here’s the deal, the laws of supply and demand tell us that prices go up when supply is less than demand. Knowing this, the diamond industry (led by De Beers and its related companies) has strategically controlled the quantity of diamonds that they release into the market every year. In that sense, they operate very much like the oil cartel. When gas prices go up, it isn’t necessarily because oil has become rare—it’s because the cartel decided to drive prices up by releasing less oil. Whenever they choose, they can release more of their reserves to bring costs back down too.
Here’s an interesting case study in using supply and demand as weapons in another industry. These same tactics are being used by key players in the mined diamond industry as they try to ward off the threat of competition.
The oil cartel also uses the principle of supply and demand as a weapon to chase off unwelcome competition when needed. Several years ago, companies in states like Utah and Colorado began producing crude oil from oil shale. Technology had improved, and prices had risen, to the point that the economics of the process made sense. The oil cartels took notice and decided to release a lot more oil into the market, for a time, to drive prices down. Yes, that means they get less per barrel in the short term, but it also means that oils share production will become unprofitable.
Over a relatively short period of time, fuel prices fell from more than $3 per gallon to about $1.60 per gallon. With prices that low, the companies producing oil from oil shale were losing money on every barrel that they produced. The cartels were sure that they would soon close up shop and be driven out of business. In reality, that period of economic struggle just made those producers more dangerous. They were forced to get leaner and more efficient. Once the cartels slowed the flow of their oil, prices were, of course, driven higher again. the shale oil producers were more profitable and resilient than ever.
I mention that because De Beers is fighting against the exploding lab created diamond industry in a very similar way. About a year ago, they shocked the industry by announcing that they were going to start producing and selling lab-grown diamonds under a new sister-brand. Their aim is to scale production of lab grown diamonds, so they can flood the market with them to drive costs down (making supply outpace demand). Does the strategy sound familiar? As a side benefit, De Beers is able to profit from the production and sale of lab created gems for bracelets, earrings, necklaces, and such in the meantime.
If they’re successful in ruining the lab grown diamond industry, the very same tactic could potentially be used against other less expensive offerings that they find threatening—like Moissanite.
As you can see, scarcity often has more to do with gaming and perception than reality. Moissanite is produced and distributed freely without industry interference or collusion to artificially raise prices. If diamonds were released into the market as quickly as they were mined, without strategic throttling, the price gap between diamond and Moissanite would be MUCH smaller.
Reason #2: Moissanite Has Lower Overhead and Sometimes Fewer Middlemen
Before the internet, if you wanted to purchase a diamond ring, you had to visit a local jeweler. The jeweler doesn’t buy directly from the mining company, or diamond cutters, in most cases. The diamond supply chain has several layers, and each one adds cost to the final product. That’s true even when diamonds are purchased online. Buying online adds convenience, but it doesn’t always eliminate the layers of middlemen involved in the process of bringing a diamond to market.
- Producer: Mines rough diamonds
- Cutters & Polishers: Turn rough pieces into the gems you recognize as diamonds
- Manufacturer: Creates finished rings by combining diamonds and various settings
- Reseller: Sells diamonds at retail prices to end users
Moissanite generally costs less to run through those various stages. Cutting and polishing can be less expensive, for example. Resellers also typically don’t need ornate displays, fancy showrooms, or commissioned salespeople when they sell Moissanite. A great deal of Moissanite is now sold online, rather than through the neighborhood jeweler, and manufacturers sometimes save money by pulling cutting and manufacturing in house, or by selling direct-to-the-public online. All of these efficiencies create opportunities to be more competitive with other providers in terms of price.
Reason #3: The Diamond Industry DOESN’T WANT Diamonds to Become Widely Affordable
Because of the psychological implications of diamond pricing on our desire to own them, the diamond industry WANTS them to be extremely expensive. If they weren’t, people wouldn’t desire to have them as a status symbol.
Because of this, if any layers of middlemen were cut out of the diamond supply chain somehow, the savings would likely benefit the seller—not you. Their diamonds would still sell at highly inflated prices, and the seller would have even healthier profit margins. When De Beers sells diamonds direct to the public, through their retail locations, they aren’t 25% less than when you buy a De Beers diamond for through another jeweler for example (even though they own the full supply chain when they sell direct-to-the-public).
Reason #4: Diamond Marketers Link Diamonds to Strong Emotions and Desires
Prior to The Great Depression, diamonds were rarely given as part of the engagement or marriage process. Other stones, which were much less expensive, were far more common. Women weren’t even interested in getting diamonds. They were just stones, like crystals, in the eyes of many. They certainly didn’t have the same ingrained meaning or significance that they carry today.
In the wake of The Great Depression, most women preferred far more practical gifts. They would prefer something useful like a car, an electric washing machine, or a new oven to a diamond ring. It wasn’t until De Beers hired the N. W. Ayer advertising agency, and started linking diamonds to feelings of love, self-worth, and significance that sales took off.
The agency made a detailed marketing strategy to lead to broad adoption of diamonds in the U.S. for engagements and weddings. As part of that plan, he observed that because “young men buy over 90% of all engagement rings” it was “crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship.” Their aim to carefully ‘romanticize diamonds’ called for “subtly altering the public’s picture of the way a man courts — and wins — a woman.”
A detailed plan was then laid out to accomplish this and drastically increase demand for their goods. Diamonds were given to movie stars to wear. These stars of the silver screen were idolized and emulated. This would help diamonds to be seen as symbols of love and status. They also leveraged the popular newspapers and magazines, of the day, to print pictures and stories that would “reinforce the link between diamonds and romance. Stories would stress the size of diamonds that celebrities presented to their loved ones, and photographs would conspicuously show the glittering stone on the hand of a well-known woman.”
Diamonds soon became a way to express your love, value, and commitment. Before long, if you didn’t give a diamond when you proposed, it was a sign that you don’t love her very much, or that your prospects as a provider aren’t very good.
Here’s the key—once deep emotions and elements of self-worth are culturally tied to a product like diamonds, we become less price conscious. People that are normally very frugal will spend thousands, and even borrow if necessary, to meet societal expectations and avoid internal or external judgment.
As diamonds became more culturally integrated, a small and simple diamond ring was no longer acceptable. The diamond had to be big enough to impress—preferably something larger than any of the bride’s friends have. A strong cultural expectation became ingrained in our society as a result of constant marketing efforts. As that expectation became more established, men found a way to buy diamond rings in order to meet those expectations and prove themselves.
The messaging was incredibly effective. In fact, over the three year period that spanned 1938 to 1941, diamond sales increased by 55%!
Diamonds aren’t something that we, as a society, just organically decided to start giving as part of engagements and weddings. We were conditioned to associate very intentional and specific meaning to them. In his book, The Seven Lost Secrets of Success, Joe Vitalie says
“Cosmetic companies don’t sell lipstick; they sell romance (and sex). They know women want to love and be loved. Lipstick is a device to attain the desired end.”
De Beers and the marketing agencies that they’ve used since 1938 have understood and exploited those deeper needs that we all have. The meaning and emotion that they successfully link to diamonds make us feel that we NEED them, regardless of cost. The marketing tactics that changed our thoughts, opinions, and buying habits are now, very successfully, being directed toward countries like India, China, and Japan as well.
Diamond alternatives, like Moissanite, allow you to present a beautiful and durable ring without incurring debt or blowing your budget. They also allow you to push back against marketing manipulation—choosing the stone that works best for you, rather than the one they’ve tried to condition you to see as your only real option.
Reason #5: We Fear Labels and Judgement (Ring shaming)
Fear is a STRONG motivator! It can guide important purchase decisions (even if only subconsciously). Recently, there have been a number of stories popping up across the web about ‘ring shaming.’ This happens when someone rejects and embarrasses someone else for trying to give them a ring that doesn’t live up to their expectations. We probably hear more about this type of thing today, because YouTube can be a really effective medium for publicly shaming others.
I recently read the story of a woman that found a ring box in her boyfriend’s nightstand. When she opened the box to see the ring, she threw a fit. The three stone diamond ring was far more simple and smaller than she was expecting. Instead of addressing it directly with her boyfriend, she went on YouTube to publicly call him out and seek advice on how to confront him about the ring. As you can imagine, there were some pretty strong responses to the video, but the most common theme to the responses was disgust over how shallow and materialistic she was being.
Ring shaming is a growing trend, so is it any wonder that people often feel incredible pressure to impress with the rings they present? If their ring is disappointing, they risk judgment, rejection, and shame—things we naturally want to avoid (at almost any costs).
A recent state-by-state study found that the average engagement ring that’s given in the state of California, is now more than $10,000! Fear of rejection (shaming), combined with a desire to ‘keep up with the Joneses’ is certainly fueling that average to climb steadily higher.
A Moissanite ring that has the look of that $10,000 diamond, could be purchased for roughly $1,000. The bigger issue though, is probably being careful about the person you’re giving a ring to. Marriage isn’t about the ring. It’s about the union (love). When that isn’t the focus (the very most important thing) for both people in the relationship, it could be a real warning sign.
Reason #6: Diamonds Are Treated Like ‘Investments,’ While Moissanite Isn’t
Consumers can often justify spending $5,000 or $10,000 if they look at the expenditure as an investment that will appreciate over time. The misconception, that all diamonds appreciate, can be dangerous and is FAR from reality.
The first, and most major, issue with the insinuation that the diamonds in a typical ring are investments that will grow in value (outpacing inflation), is that it’s simply not true. The type of diamond that comes on your typical engagement ring won’t see appreciation. If you have hundreds of thousands (or millions) of dollars to invest in extremely rare and unusual diamonds, then you might see some worthwhile appreciation over time. Outside of those unusual circumstances, buyers tend to lose money when they resell. Even if they hold on to their rings for many years before selling.
You will end up losing value on your diamond ring when you go to resell. How much? I actually did some research to find out. I also looked into how much of a discount sellers might have to provide when reselling a used ring. I evaluated both Moissanite and diamonds separately. I analyzed local listings for previously owned rings that could give me insight into the kind of discounting that sellers were having to do in order to move their rings. The findings were really interesting!
Here’s what we observed for used diamond rings.
Real Examples of Diamond Resale Value
|Used Rings For Sale:||Original Price:||Asking:||Total Loss in $:||Discount %:|
|Diamond Ring #1||$1,275||$795||$480||38%|
|Diamond Ring #2||$1,700||$1,100||$600||35%|
|Diamond Ring #3||$1,999||$400||$1,599||80%|
|Diamond Ring #4||$2,200||$1,550||$650||30%|
|Diamond Ring #5||$2,200||$700||$1,500||68%|
|Diamond Ring #6||$4,000||$800||$3,200||80%|
|Diamond Ring #7||$4,600||$1,500||$3,100||67%|
|Diamond Ring #8||$5,000||$2,250||$2,750||55%|
|Diamond Ring #9||$6,700||$3,000||$3,700||55%|
|Diamond Ring #10||$6,828||$3,000||$3,828||56%|
|Diamond Ring #11||$7,200||$3,000||$4,200||58%|
|Diamond Ring #12||$7,600||3,000||$4,600||61%|
|Diamond Ring #13||$18,000||$6,499||$11,501||64%|
The following table outlines our findings for the Moissanite rings we found.
|Used Rings For Sale:||Original Price:||Asking:||Total Loss in $:||Discount %:|
|Moissanite Ring #1||$1,005||$700||$305||30%|
|Moissanite Ring #2||$1,200||$900||$300||25%|
|Moissanite Ring #3||$1,200||$790||$410||34%|
This process made two things very clear for us. First, diamonds (the kind that most of us have in engagement and wedding rings) are terrible “investments.” They’re an almost sure way to lose SIGNIFICANT money if you buy believing that they’re going to appreciate (or even keep up with inflation).
Second, that the MUCH lower cost of Moissanite means you’re taking on less risk from the very start, and as you can see, average discounting is also lower. In the end, it looks like you would come out further ahead buying, and later reselling, a Moissanite ring than you would buying, and later reselling, a similar diamond ring. Your loss as both a total and percentage are likely to be lower with a Moissanite ring, based on our findings.
I wrote a full article on the resale value of Diamond and Moissanite recently, that you may want to review for additional insights.
To be fair, Moissanite isn’t the right fit for every person. There could be scenarios where someone may want a diamond in spite of the cost difference. To acknowledge some of those instances, I’ll cover the advantages that each of these ring options could offer.
Advantages of Diamond Over Moissanite
Diamonds are more well-known and more culturally ingrained. Diamond is a harder stone, which makes it more scratch resistant (but also more brittle). Diamond gives some people a sense of self-worth and exclusivity that they may not be able to get from a less expensive ring like Moissanite.
Because diamonds are the ‘norm’ that’s been hammered into us since the end of The Great Depression, it’s often easier to show your ring off to friends and family when you can tell them it’s a diamond. Again, going with the flow of cultural expectations is, of course, the path of least resistance.
There’s a sense of history and wonder when you think about the conditions and time that it took for the earth to form a diamond. Some people genuinely love that aspect of the gem.
Advantages of Moissanite Over Diamond
Moissanite typically costs about 90% less than mined diamonds. While it isn’t as hard as diamond, it is the second hardest stone in existence, which means it’s both extremely scratch resistant, but also less brittle than diamond.
Moissanite is a pretty incredible stone with a really unique and interesting history, but it’s often thought of as a diamond simulant. While the two stones are composed of different things, they do look remarkably identical. Moissanite can provide a diamond-like look and durability, combined with a price that won’t blow your budget or lead you into deep debt.
As mentioned above, resale value is also an important advantage of this stone. While no one buys an engagement ring with the belief that they’ll end up reselling, a short time later, that does happen on occasion, for a variety of reasons. The evidence that we shared earlier, suggests, that you would lose a lower percentage of your original purchase price reselling a Moissanite ring, than you would reselling a diamond ring.
Less Expensive Rings Can Lead to Longer Marriages
Spending less (not going overboard) is more than practical for your budget—it seems to protect your relationship. A study came out of Emory University, that tracked how much couples spent on their rings and overall marriage, and then how long their marriage ultimately lasted. Guess what they found. Frugal marriages lasted longer.
Advertising agencies, and our society, seem to suggest that the bigger our diamond is, the more our partner loves us, and the happier we’ll be in our relationship. While that’s the programming that we’re given, consciously, most people realize that can’t be true. Many Hollywood marriages (with multi-million dollar rings), for example, seem to fall apart as soon as they begin.
This study found an inverse relationship between wedding-related spending and marital success. The LESS you spend on your rings and wedding, the better your odds for ‘making it’ as a couple. If Moissanite is 90% less expensive than a traditional diamond of comparable size—that seems like a much better start to matrimony, in light of the findings from this study.
Moissanite is drastically less expensive than diamond, but has many impressive qualities. Because it’s beautiful, durable, and affordable, it isn’t really a sacrifice, it’s a choice that comes with many attractive rewards.
The hard reality, is that the composition and size of your ring, really says nothing about your individual value—and means absolutely NOTHING regarding the depth of your love or the quality of your relationship. If you can see past the self-serving advertising messages of the diamond industry, you may find Moissanite to be a better overall fit.