Internet sites may be undercutting retailers

Brad Roshto of Diamond Brokers in West Melbourne, Fla., has sent 100 fellow jewelers a letter warning that they may inadvertently be patronizing companies who are selling to their competitors.

Roshto is upset about pricescope.com, a site that compares diamond prices for consumers on sites like dirtcheapdiamonds.com and jewelryzone.com. Roshto says that most of the companies selling on pricescope.com simply use listings from Polygon’s CertNet and RapNet – which retailers use as well.

“Diamond suppliers have allowed this to happen with their goods, and most even participate with drop shipping to the consumer from these sites,” the letter says. “Diamond suppliers that are working with these sites are working against the retailers that have bought and stocked diamonds for years. They are not supporting us, they are working against us, and if we sit silent they will continue.”

The letter came with a list of 50 suppliers whose goods are listed on pricescope.com.

Roshto said he decided to send the letter out after finding his own goods on pricescope.com and other consumer-oriented sites.

“Sometimes you try and sell a stone to a customer and the customer comes in two weeks later with the exact same stone for 2% over cost,” he says. “There is no way a retailer can survive on that kind of margin. A lot of business is flying out the door because of it.”

Roshto wants Polygon to differentiate which stones will be sold to the trade and which will also be listed on pricescope.com.

In the meantime, many suppliers are unhappy about being named in his letter, Roshto plans to send it to more retailers in the future.