Net price, in the language of the gem and jewellery trade, is the actual figure the buyer pays the seller for a stone or piece, after all negotiated discounts and adjustments have been applied to whatever published or asking price the conversation began with. It is one of those terms whose meaning is straightforward inside the trade but which is frequently misunderstood by buyers entering from outside, and the misunderstanding has practical consequences. The net price is the number that matters; the asking price, the list price, the tag price, and the various reference prices that pricing conversations refer to are starting points or benchmarks rather than transaction figures.

How the term is used in diamonds

In the diamond trade, net price is most often expressed in relation to the Rapaport Diamond Report, the weekly price list published by Rapaport USA. The list quotes a per-carat asking price for each colour and clarity grade in each weight category, and the trade then negotiates a percentage discount or premium against that list. A stone offered at minus thirty per cent off Rapaport (written -30 or -30%) is offered at a price thirty per cent below the relevant list figure for the weight, colour, and clarity. The figure that emerges from the discount calculation is the net price.

The Rapaport list is not a market price in the strict sense. It is a published reference that the trade uses as a coordinate system for negotiation. Real transaction discounts vary from list by stone characteristics that the list does not capture — fluorescence, cut quality below the broad GIA grades, polish, symmetry, milkiness, the specific cutting style — and by market conditions, dealer relationship, payment terms, and quantity. Net prices on identical-grade stones can vary by twenty per cent or more depending on these secondary factors.

How the term is used in coloured stones

Coloured stones do not have an equivalent of the Rapaport list, and the trade in coloured stones runs on parcels and individual specimens negotiated case by case. The asking price quoted by the seller is the starting figure; haggling is expected and conventional, particularly in the Bangkok, Jaipur, and Hong Kong wholesale markets that move most of the world's coloured rough; and the net price is the figure agreed at the close of the negotiation. There is no public reference list, and the gap between asking and net is therefore much wider and more variable than in diamonds.

For coloured-stone wholesale buyers, building a sense of net price across the market is a function of experience, volume, and relationship. The major Bangkok and Jaipur wholesalers each operate within understood ranges for material of given quality, and the trade moves stones in both directions across the dealer network at internal net prices that may be substantially below the figures quoted to retail buyers.

Memo, consignment, and net

The term net price is used in distinction from memo price and consignment price. A stone sent on memo — borrowed by a retail jeweller from a wholesale dealer for presentation to a client — has a memo price that the jeweller would owe if the stone were sold or lost, but the net price for the eventual sale is the figure the dealer expects to receive after the jeweller's mark-up. The memo system is the principal way that fine coloured stones move from wholesale to retail in the American market, and the negotiation of net price between dealer and jeweller is a standing part of the process.

What the price excludes

Net price typically does not include certain ancillary costs unless explicitly stated. Shipping, insurance, sales tax, customs duties, and laboratory fees are usually charged separately. Where the term is used in international transactions, customary trade incoterms apply — ex-works (the seller has the stone available at their location, the buyer arranges everything thereafter), free on board, cost-and-freight, delivered duty paid, and so on — and a careful invoice will identify which incoterm applies and which costs are accordingly included.

Retail mark-up is, by definition, not included in net price. The mark-up between net and retail varies widely — generally narrower at the very top of the market and wider in mass-market retail — and the relationship between net price and final retail asking is the principal driver of retail-jeweller margin.

Confidentiality

Net prices in the trade are conventionally treated as confidential between buyer and seller. Disclosure to third parties without consent is regarded as a breach of trade practice in most major markets, and the published prices in catalogues, online listings, and retail tags are deliberately presented as ranges or asking figures rather than as net transaction prices. The convention has practical consequences for buyers attempting to benchmark prices: published reference points are useful as starting positions but should not be taken as the actual market price for the underlying material.

In the trade

For a buyer dealing with a reputable wholesale source, the negotiation of net price is straightforward. The opening offer establishes a position, the discussion clarifies the qualities and any documentation, and the agreed figure is recorded on the invoice as the net price. The buyer at this point owes that figure plus any explicitly added charges. The discipline that the trade expects is that the agreed price is the agreed price, that variations after the fact are unwelcome, and that the relationship between dealer and buyer is built on the consistency of net pricing across multiple transactions over time.

Further reading

• GIA Gems & Gemology — diamond pricing and trade practice
• ICA — coloured-stone trade references
• AGTA — coloured-stone trade practice and disclosure
• Rapaport — diamond pricing reference