Lab-Grown Diamonds 2025: Pricing, Margins, and ERP Controls for Manufacturers & Wholesalers

If you’re in jewelry manufacturing or wholesale, you’ve probably felt the tremors. Lab-grown diamonds (LGDs) have moved beyond novelty—they’re now a core product line, and their pricing is shifting beneath our feet. In Q2 2025, wholesale LGD prices declined about 6.7% quarter-over-quarter, per Edahn Golan’s LGD Wholesale Price List. Over 1–3 carat rounds, the year-on-year drop is even steeper—some sizes down 42%.

That’s not a gentle breeze—it’s a market storm. Margins are under pressure, inventory valuations are shifting, and the manufacturers & wholesalers who don’t adjust risk being squeezed.

To stay ahead, your systems—the backbone of your business—must evolve. You need precise cost tracking, bill-of-material (BOM) controls, dynamic margin safeguards, and visibility into every part of your operations. That’s why jewelry ERP for manufacturers is no longer a “nice to have.” It’s a lifeline.

Let’s walk through what’s happening, what risks to expect, and how ERP-level controls (and a solution like Luxare) can help you navigate this era of disruption.

What’s Driving the LGD Price Drop

The 2025 pricing trend isn’t random—it’s driven by structural forces. A few key contributors:

1. Manufacturing Efficiency & Scale

As LGD production technology (CVD, HPHT) continues improving and global capacity expands, unit costs drop. More producers enter the market, supply rises, and marginal cost falls—pushing wholesale prices downward.

2. Oversupply & Market Saturation

Many producers scaled aggressively anticipating demand. But demand hasn’t kept pace. Excess capacity leads to pricing pressure to move inventory.

3. Competitive Pressure & Retail Markdowns

Retailers respond by promoting LGDs aggressively. That squeezes wholesale margins. Some retailers renegotiated with wholesalers or asked for discounts.

4. Relative Value Perception

LGDs are sliding toward commodity-like behavior. Buyers compare by price per carat, color, clarity—less about “mine vs lab” prestige. As LGDs become more interchangeable, differentiation comes through cost, logistics, and branding.

Thus, you’re no longer just selling sparkle—you’re managing cost, margin, and efficiency under a tighter squeeze.

Margin Dynamics & Inventory Risk

Let’s consider the margin math. Suppose you manufacture a 1-carat LGD ring:

• Raw LGD price was $200/ct last year; now it’s $185/ct.
• Your cost includes setting, finishing, metal, labor, overhead.
• You apply a markup or margin target (say +60%).

In this environment, a slip of $5–10 in component cost or inefficiency can flip margin by several percentage points. Worse, if you overpay for LGDs when prices are falling, your costed inventory basis becomes a liability—you’ll be forced to discount or lose margin on a sale.

Manufacturers & wholesalers holding LGD stock risk inventory write-downs; outdated cost bases can mislead decisions. That’s why costed BOMs (the ability to assign component-level cost and variance) and margin control rules must be baked into your ERP.

Why Generic Manufacturing ERP Isn’t Enough

You might be running a generic manufacturing or ERP platform. It may track raw materials and assembly flows, but it likely isn't tuned to the demands of jewelry and diamond manufacturing. Here’s where generic systems typically fail:

• Lack of fine granularity for gemstone cost, certificate, lot, or cut details.
• BOMs that don’t support subassemblies, wastage, yield loss, or rework flows.
• No margin validation or safeguards when cost inputs shift.
• Weak audit trail for price changes or cost updates.
• Difficulty in reconciling open inventory cost vs actual material market shifts.
• Poor vendor / subcontractor cost tracking especially for diamonds and gem cutting.

You need a jewelry software for manufacturers that understands gems and metals—not just parts. Book a demo with us!

How ERP Controls Can Protect Your Business

The right ERP system can give you tools to manage this turbulence rather than be buffeted by it. Here’s what you should demand:

1. Multi-Level, Costed BOMs with Variance Tracking

Your ERP must let you build multi-stage BOMs: raw LGD → cut stone → setting → finished ring. For each stage, you should capture cost, waste, rework, and actual vs standard cost variance. That way, when market prices shift, you can trace where margin leak occurs.

2. Material Lot / Certificate Traceability

Every LGD should carry metadata: lot number, certificate, cutting yield, vendor cost. In your ERP, you should be able to trace which lot went into which SKU, reverse via audit, and revalue inventory as prices change.

3. Dynamic Cost Updates

When wholesale LGD pricing changes (as it did ~6.7% drop in Q2 2025, your ERP should allow you to update component cost globally or in targeted SKU sets, triggering warnings or repricing flows.

4. Margin Rules & Safeguards

Define minimum margin floors per product or category. If updated costs push margin below threshold, the system should block sale or flag for review—never allow a sale that destroys profitability.

5. SKU-Level Pricing Override / Versioning

You should maintain multiple price versions—base price, promotional price, margin-adjusted price—yet never lose visibility on which cost basis drove which pricing.

6. Inventory Revaluation & Write-down Management

When the market falls, your ERP should support inventory revaluation, write-downs, and reserve accounting without breaking audits.

7. Vendor Contract & Pricing Management

Track vendor-level cost agreements, discounts, volume incentives. As LGD pricing declines, renegotiation matters. The system should tie vendor pricing to BOM cost entries.

8. Analytics & Alerts

Dashboards showing margin erosion, SKUs under pressure, slow-moving LGD lots, variance hotspots. Alerts when a SKU’s margin is trending negative.

How Luxare Builds These Controls Into Jewelry ERP

At Luxare by Diaspark, our ERP platform isn’t a generic tool patched for jewelry—we design for gemstone-intensive workflows, including LGDs, from day one. For manufacturers & wholesalers across U.S. and Canada, our system offers:

• Detailed BOM Engine tailored for jewelry and gemstone products (metals, stones, settings).
• Certificate and lot tracking for each stone or gemstone component, so you never lose trail.
• Mass cost update tools to import new wholesale LGD pricing and cascade updates.
• Margin enforcement rules built natively so no sales slip below threshold unintentionally.
• SKU versioning & price version history ensures that previous pricing logic remains auditable.
• Inventory revaluation / write-down support, so you can adjust book values with controls.
• Vendor cost module to capture negotiation, discounts, and trace vendor-to-SKU cost.
• Alerts & analytics dashboards geared to diamond margin risks, price volatility, and inventory pressure.

We’ve seen manufacturers adopt Luxare and reduce margin erosion, improve accuracy in costing, and gain confidence in pricing decisions—especially during volatile price periods.

A Realistic Scenario

Let’s paint a scenario to bring this to life:

You’re a wholesaler-manufacturer supplying LGD jewelry to retailers across North America.

• In January, you purchase a batch of 1-carat LGDs at $200/ct.
• Your BOM includes these stones plus metal, setting, labor, overhead. You price a ring at $1,200, targeting ~60% margin.
• By Q2, wholesale LGD market price drops 6.7%. You’re now holding inventory with cost basis above market.
• Some customers demand discounts; others return old inventory.
• In Luxare, you import updated LGD wholesale cost, cascade updates to SKUs. The system flags 120 impacted SKUs whose margin dips < 50%. Sales of those SKUs must slip to “review only.”
• You reprice, adjust discounts, maybe write down some slow-lot inventory.
• Analytics dashboard shows which SKUs are now margin pressure points, which vendor lots are least profitable, and which designs can absorb higher cost.
• You negotiate vendor rebates or future discounts based on performance.
• Over time, your margin stability improves instead of being surprised by a collapse.

Without those controls, you might accidentally sell below cost—or miss that your inventory basis is out of sync with market reality.

Strategic Moves in Light of Price Volatility

Beyond ERP controls, manufacturers & wholesalers should consider strategic shifts:

• Focus on mid-size diamonds (1–2 ct) where supply/demand balance is less extreme than ultra-large stones.
• Shift design emphasis toward creative settings or mixed-material designs that reduce stone exposure.
• Bundle value services like certificate upgrades, extended warranties, or customizations to differentiate beyond pure cost competition.
• Inventory hedging—hold lighter LGD inventory, rotate fast-moving lots, and avoid accumulation of slow-moving heavy stones.
• Vendor diversification—don’t rely on a single stone supplier; source globally so you can respond to regional fluctuations.
• Cost leadership—invest in operational efficiencies, lower labor waste, reduce rework, so that your margin cushion is stronger.
• Transparent communication with retailers—educate them about cost input volatility so they understand your repricing logic.

All of these moves, however, are only actionable if your systems (ERP, BOM logic, analytics) support them.

Summary & Takeaway

In lab-grown diamonds, 2025 is the year of reckoning. Wholesale prices slipping ~6–7% quarter-on-quarter, steep year-on-year declines for popular size categories, and shifting demand dynamics are compressing traditional margin models.

If your manufacturing or wholesale business doesn’t embed rigorous cost tracking, BOM controls, margin safeguards, and responsive pricing logic in your ERP, you risk falling behind.

Jewelry ERP for manufacturers is no longer optional—it’s the foundation you need to make confident pricing decisions, protect margins, and stay agile in market turbulence. With Luxare, you get a system built for gemstone realities, not generic part lists.

If you’d like a walkthrough of how these controls work, we’d love to show you how Luxare helps make this margin storm manageable—not devastating. Book a demo here.