Where are the highest profits realized on the diamond value chain?

• A. During mining
• B. In marketing only
• C. At the two ends of the supply chain
• D. In midstream

Answer: (C)

Profits are created but not equally distributed along the diamond value chain; the biggest opportunities to realize high profits come at the two ends of the chain. At the upstream end, mining and rough trading can capture strong margins when the market conditions favor high rough prices relative to production costs and when quality premiums apply. At the downstream end, finished jewelry sold to consumers carries substantial value and branding premiums, allowing retailers to command large markups beyond the cost of the stone and setting. The middle segment—cutting and polishing, grading, and distributing—adds essential value but faces tighter margins due to processing costs and competition. Taken together, the ends offer the greatest profit realization, which is why they’re identified as the two ends of the supply chain.