Lot pricing is the standard convention by which rough and graded coloured-stone parcels move at the wholesale level. Rather than negotiate every stone, buyer and seller agree a single per-carat or per-gram figure for the entire parcel; the buyer absorbs the better stones and the lesser stones at one blended rate. The convention compresses negotiation, allocates risk, and rewards the buyer who can read a parcel quickly and accurately.

How a parcel price is built

The seller usually sets an asking per-carat price grounded in the highest-yield band within the mix. The buyer pushes that figure down by reference to the tail - the proportion of stones that will not yield commercial goods. Negotiation moves between the two until a per-carat price clears the parcel. Volumes can be substantial: a single parcel of Mozambican ruby rough at Tucson or Jaipur can run from a few hundred carats to several kilograms, and a difference of a few dollars per carat translates to material money on the cheque.

Why the convention persists

Stone-by-stone pricing on a parcel of a thousand pieces is mathematically possible but commercially unworkable: the time cost would exceed the margin. Lot pricing also discourages the practice of cherry-picking, which sellers resent because it leaves them holding the unsellable residue. A buyer who insists on picking stones out of a parcel is generally quoted a substantially higher per-carat price than a buyer who takes the whole.

Buyer's discipline

The risk in lot pricing is that the buyer pays the parcel price for a mix that is poorer than the sample suggested. Experienced buyers minimise this risk by examining a true random sample of the parcel rather than a presented sub-set, by weighing parcels themselves, and by tracking the seller's reputation for parcel consistency over multiple purchases. The convention works because, over a career, the gains and losses converge for a buyer who reads parcels well.