【Los Angeles,】Deciphering the Diamond and Gem District

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Editor’s Note

This article delves into the professional techniques used to authenticate diamonds and gemstones, offering readers reliable methods to verify their purchases in a market where even experts can face challenges.

David Brancaccio, an older man with white hair and a light blue button-up sits at a white table holding a microphone. He is looking at and speaking to Dave Bindra, a man with a beard, pink turban and pink shirt, who is speaking into a boom mic being held over the table.
Tricks of the Trade

Even professionals can struggle with certain pieces of jewelry. However, there is at least one reliable method to verify what you’re purchasing.

Today, we explore the tricks of the trade within the world of glitz and glamour: diamonds, jewelry, and gemstones.

The trading floor of the Pacific Stock Exchange, once located just across the freeway from the Marketplace headquarters in Los Angeles, is long gone. But a short walk in the other direction leads to a cluster of very much alive retail trading floors: approximately 1,500 jewelry shops housed primarily in art deco buildings.

How do all these businesses survive? Experts note that many shops sell on consignment, avoiding the enormous inventory costs associated with outright ownership of the diamonds, rubies, sapphires, and other precious and semi-precious items they sell. To truly understand this market, one must take an elevator 20 floors up to B&B Fine Gems. This company is a wholesale professional and a major player, currently preparing air cargo shipments of gems to Hong Kong for an upcoming trade show.

Dave Bindra, Vice President and Head of Acquisitions at B&B Fine Gems, displays sapphires from Sri Lanka, rubies from Burma, and a 90-carat peach tourmaline from Mozambique in a conference room at their office.

“You never see these stones in this size, so clean, so rich in color,” he says.

Bindra’s father, Ruben, founded B&B 40 years ago after immigrating to the U.S. from Punjab in Northern India. Dave learned the trade from his father and also completed the graduate program at the Gemological Institute of America (GIA), where he now serves on the board of governors.

“You’re sitting under a microscope from 8 a.m. to 3 p.m. every single day looking at — at the end of the program — looking at hundreds of stones and identifying them,” he says.

The GIA is one of the few institutions that issue authoritative laboratory reports on gemstones.

“I would say, if it’s something of significance, it should have a gemological report,” Bindra says. “Without that document, you don’t really know what you’re buying.”

This is a key Trick of the Trade: If you are spending a significant amount of money, insist on that certificate. For those without years of expertise, he advises against making such purchases while traveling abroad.

“Someone will grab me in an alley and, you know, see me walking across the street and say, ‘Hey, I’ve got something for you.’ You got to take a look, and we have to move quickly to seize opportunities quite often in our space,” Bindra says.

However, maintaining a good poker face is also crucial.

“That’s the first thing that my dad taught me,” Bindra says. “He said, ‘You love stones too much. You get too excited. You can’t — you’ve got to hide that emotion when we’re negotiating.’ And I said, ‘Well I don’t wanna hide my emotion. I love the stones, you know?'”

The poker face is useful in any market. Another key takeaway is to avoid being pressured into a purchase by a random stranger.

“Trust is the very fabric that really holds our whole industry together,” Bindra says.

This sentiment is echoed by Mike Fried, CEO of The Diamond Pro, an online guide for buying diamonds—typically for engagement rings.

“Unfortunately, there are also some less-than-savory characters in the diamond business,” Fried says.

Fried also has extensive experience in the field. He spent considerable time learning to select the best diamonds during his tenure at the renowned diamond house, Leo Schachter.

“I spent six months in a sorting room where they would just pour thousands of diamonds onto my desk every day,” Fried says.

One theory for how this jewelry district can support so many shops relates to Los Angeles’ status as an international tourist destination. Gems and jewelry are easily portable stores of value, which might appeal to shoppers from countries with unstable economies. However, Fried argues that the real selling point should be beauty, pure and simple. If you need a portable store of value, he suggests gold—a standardized commodity with a clear market price.

“Compare that with ‘when you walk into a jewelry store and you purchase that diamond, no matter how nice the guy is, he’s looking to make a profit. So you’re paying significantly over trade value for that diamond,'” Fried says.

The age-old wisdom for buying diamonds is to remember the four Cs: cut, clarity, carat, and color. But if you’re not a professional, how do you apply this in practice?

“Well, in practice, you can’t,” Fried says. “And even an expert, once a diamond is in a ring, you can’t take precise measures there. Which is why a lot of people actually call them the five Cs instead of the four Cs—and the fifth is certification.”

There are good certifications, and there are less rigorous ones. The Diamond Pro is a helpful resource for determining which is which.

Dave Bindra, of B&B Fine Gems, is our guide to the gemstones and jewelry.
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⏰ Published on: November 13, 2024