Lab-Created Diamonds Offer Entrepreneurs Entry Into an $80 Billion Market
By Space Coast Daily // March 29, 2018
For generations, diamonds have retained a high value as luxury items
When you think of diamonds, you probably think of their visible qualities; things like cut, carat weight, and brilliance. It’s also likely that you think of a commodity industry that is older than almost any other, with roots dating back for thousands of years. Chances are, you don’t think of small business opportunity, though.
The worldwide diamond market is worth approximately $80 billion, and it’s an intensely competitive one. There’s been a recent innovation, though, that provides a unique opportunity for entrepreneurs to carve out a slice of that enormous pie. The means they can use to do so is through lab-created diamonds.
A Man-Made Alternative
For generations, diamonds have retained a high value as luxury items. The reasons for it are plentiful, but the most obvious one is that they are beautiful. That isn’t the primary cost driver, though.
The main reason that diamonds are valuable is that they are seen as rare (spoiler alert: they’re not). The problem for anyone looking to enter the business is that there are a handful of big companies that control the global diamond supply, which keeps supplies tight and prices high. That doesn’t have to be a hindrance anymore.
Since the 19th century, scientists have been trying to create diamonds in a laboratory setting. In recent years, these efforts have paid off, and scientists can now grow diamonds that are indistinguishable from mined stones.
These lab-made gems cost between 30% and 40% less than mined diamonds, so the potential profit margin is tremendous. There’s also a ready-made market that is primed to buy them.
A Socially-Conscious Generation
Much has been said about the Millennial generation. What is beyond dispute is that they represent a rising portion of the global consumer goods market. That means that they are the present and future target market for the diamond industry.
This bodes well for entrepreneurs looking to break into the market through lab-created diamonds. That’s because Millennials are also one of the most socially conscious generations in history.
Diamond mining has had a long, troubled ethical history. Even today, there are instances of diamonds being used as money laundering commodities, and the stones are still used to finance genocides and other human rights violations across Africa.
Efforts to stem the abuses, like the Kimberley Process, have largely failed. Millennials are aware of this track record and are more than willing to vote with their wallets when a viable alternative is available.
A Rare Ground Floor
There hasn’t been an opening like this in an established industry this large in a very long time. The industry incumbents know it, too.
Reports commissioned by the diamond mining industry itself already cite competition from lab-created stones as one of their primary challenges in the coming years. That means that now may be the perfect time to begin a new venture in selling lab-created diamonds and jewelry.
The potential rewards are quite attractive when you consider that if lab-created diamonds manage to capture .1% of the total market, they’d be worth $80 million. That’s a value proposition that isn’t likely to present itself again anytime soon.
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