Rough diamonds are usually channeled through the CSO (Central Selling Organization)--a De Beers affiliate, from the mine to the cutting and polishing centers. The role of CSO has significantly changed and the system of single channel marketing has more or less become obsolete.
A sightholder may be a diamond manufacturer with large cutting facilities or rough diamond dealer, who may resell rough diamonds to small dealers, or Diamdel, a CSO affiliated rough trading company
Rough diamonds are sold ten times per year at gatherings in London known as sights. Attendance to sights is by invitation only. Buyers who attend the sights are known as sightholders. Sightholders go through a broker who acts as a mediator between the CSO and the sightholder. A 1% commission is paid by the sightholder to the broker based on the value of their sights. Most sights are approximately US$500000 to millions, in cash. The estimated time it takes for diamond to get from mine to producer is approximately 2.5 years.
The diamond pipeline is pretty much the same, but the role of the CSO has changed. It has subsequently been renamed the DTC (Diamond Trading Company).The new business strategy for DTC is to monitor the rough all the way through to retailing. The greatest value addition is between diamond manufacturing and retail sales, which has a mark up of more than 100 per cent. The DTC is now involved in diamond processing, jewelry manufacturing and marketing.
The new sightholder requirements are:
1. The sightholder must have solid financial standing and reliability.
2. The sightholder must have the ability to efficiently distribute diamonds to other dealers and manufacturers.
3. The sightholder must have the marketing ability on their own or together with retailers aimed at increasing consumer demand.
4. The sightholder must have a strong geographic market position.
5. The sightholder must endorse and comply with best practice policy (BPP).
6. The sightholder should not deal in synthetic diamonds.
7. The sightholder must have personal integrity and technical expertise with respect to particular diamonds.
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