Diamonds are truly eternal. A Hong Kong based businessman just bought a $48m diamond for his 7-years old daughter. Not judging the fact that this might be a pricey gift for such a young kid, we are reminded that the diamond business can be an excellent one.
As every commodity, the price of diamonds fluctuates over time. However, what makes this industry truly unique is that the demand for diamonds will always exist. People get married all the time and will always do. It’s an industry where you know that a large number of new customers will automatically appear every year without the need to create that demand. Furthermore, once a customer has purchased its first diamond, there is a high likelihood that he/she will repurchase in the future at least one more diamond at a higher price as time generally leads to more wealth.
Obviously, the diamond business is very competitive with many jewelers fighting fiercely for market share around the world but at least the demand side is guaranteed. And this is fantastic in business.