- December 18th, 2018
ROUGH DIAMOND AUCTIONS
BACKGROUND INFORMATION
In the past 10 years, the rough diamond industry has changed more than it had in the previous 100 years. Most people know, or think they know, about the DeBeers diamond cartel. For a long time this was true, DeBeers owned a world-wide monopoly on the rough diamond supply, dictating the prices and quantity that they would sell to the cutters. But all that changed in the 1990's with the discovery of rough diamond mines outside of DeBeers' stranglehold. Mines in Russia, Australia, and Canada opened the supply of rough diamonds and ushered in a new era of rough diamond pricing.
DeBeers' traditional "pricing" mechanism for rough diamond sales was a strict "take-it-or-leave-it" option to buyers. You could buy at the price DeBeers was offering, or you could never buy another rough diamond again. This wasn't exactly the free market adjusting diamond prices based on supply and demand curves.
With the influx of a new diamond supply network, and with 50% of the world's rough diamond supply coming from outside DeBeers mines, the world needed a new pricing mechanism for rough diamonds, one that reflected supply and demand and market conditions. But, with such a tough to price object like rough diamonds, where each diamond was unique, pricing was difficult using traditional means. Additionally, rough diamond miners were not always in touch with the market for cutters who were selling to the jewelry shops like Tiffany's and Wal-Mart.
This is where Optimal Auctions stepped in to fill the gap in the rough diamond industry. We created the first multi-round rough diamond auction for the diamond industry in 2013. It revolutionized the way rough diamonds were sold in the world, with hundreds of bidders bidding on bags of stones, creating a true market for the rough stones and creating a true market price as well. Since we started the rough diamond auction industry, almost all rough diamond miners, including DeBeers, have begun selling their rough stones using auction software.
TYPICAL AUCTION FORMATS
In the Multi-Round SMR Auction format for rough diamond auctions, stones are grouped together based on their color, clarity and carats. Imagine a bag of 200 rough diamonds of about the same value in a bag. The auction is then set up to sell between 20-100 of these bags in a single auction. Hundreds of bidders will take part in the auction, bidding on the bags of stones that interest them. The auction takes place in a multi-round format. Each round, every bag of stones is a given a price. A bidder must decide to either bid or not bid on the product. If more than 1 person bids on a bag of stones, the next round the price will increase and bidders who previously bid "yes" will be asked to bid again. This continues until there is only 1 bidder on each bag of stones, and then the auction ends. This multi-round format finds the true market prices for these rough diamonds.
- Easy to Set-Up for Regulators
- Easy to Understand for Bidders
- With Exit Prices, Finds the True Market Price
- Can Be Run Extremely Quickly, 30 Minutes or Less
- Allows Smaller Bidders to Compete Fairly With Smaller Bidders
ROUGH DIAMOND AUCTION PROJECTS
RIO TINTO DIAMONDS AUCTIONSAntwerp
Multi-Round SMR Auctions selling bags of similar stones to highest bidders. Also Single-Round Sealed Bid auctions when stones are sold individually.
CHOOSING OPTIMAL AUCTIONS
They say a diamond is forever. If they truly are forever then they will be mined and sold forever as well. We revolutionized the rough diamond industry with our multi-round auctions, and we will be supplying our auction software for rough diamond auctions forever as well. As long as people want diamonds in the world, we will help sell them.
We would be incredibly happy to show you a demonstration of our software. We are confident that once you see how the software works, and how easily it controls every aspect of your auction, you will never go back to using an Excel spreadsheet. Our software takes care of everything you could imagine - exact timing of rounds, ensuring bids are received in time, ensuring bids adhere to eligility rules, and thousands of other things. Plus, it runs right in your browser, so anyone with a desktop, laptop, or even a smartphone can use our software.
We will be happy to talk with you about your auction software needs, and will help answer any questions you might have. We know that our rough diamiond auction software is the best the world.
Who We Are
We are responsible for a wide range of auctions for national governments and private corporations - everything from pricing 10% of the world's diamond supply to billions of dollars worth of electricity in for states in the United States.
When you are running the most important auctions in the world you have to choose the best auction software provider in the world, Optimal Auctions.
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Our Software Provides
- Multiple Auction Formats
- Bank-Level Security
- Beautiful User Interface
- 100% Reliability
- Blazing Performance
- Massive Scalability
- Total Auditability
- Complete Test Coverage
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