Wholesale lab-grown fell 96%. The retail markup moved 1 to 2 points

§1The cost fell. The markup did not.

The figures below are nine days old and that is stated rather than smoothed: JCK published them on 10 August, drawing on Edahn Golan's second-quarter wholesale price list of 7 July. They are carried today because this paper marks a lab-grown reference price every morning and has never printed the wholesale series that sits underneath it. The wholesale lab-grown index fell 13% in the year to the second quarter of 2026, after 26% across 2025, and is down 96% since tracking began in July 2018. Over the same period the retail markup held above 80% over wholesale, and the difference between the 2025 and 2026 markup is one to two points. The wholesale price collapsed and the counter price did not follow it down.

Inside the wholesale series the decline is not uniform, and the exception is the size this paper marks. One-carat rounds rose 1% year on year in the second quarter. Stones of 1.50 to 1.99 carats fell 11% and two-carat stones fell 20%. A three-carat VVS D colour round was quoted at $126 a carat, about 30% cheaper than in 2025. The pattern is consistent with a floor forming at the small end, where production cost is closest to price, while the large end still has room to fall. It also means a retailer's average selling price can hold while the cost of the goods behind it drops, which is the mechanism the markup figure describes.

§2Half a year of sales on the shelf.

The inventory line is the one this desk would put in front of a retailer first. The lab-grown inventory-to-sales ratio at US jewellery retailers has climbed from single digits in 2020 to nearly 50%. That is the ratio that turns a price decline into a loss rather than a margin. Goods bought at last year's wholesale and sitting on a shelf against a series falling 13% a year are being written down while they wait, and at a ratio near 50% roughly half a year of sales is exposed to the next print. Edahn Golan has warned of a bullwhip effect and a possible offloading of memo goods; the inventory ratio is what would make that arithmetic rather than a forecast.

Against this paper's own tape the gap is visible without any modelling. The lab-grown one-carat reference on the Carat Capital tape read $704 this morning, unchanged from yesterday, sourced from CaratRadar. That is a consumer-facing asking price, not a wholesale one, and it should sit above the wholesale series by definition. What the markup figure says is by how much, and that the how-much has barely moved in two years while the input fell. This paper's own six-retailer sample on 25 July found $550 for the same stone, 28.0% below the $704 the tape carries, and that dispersion is the retail end of the same fact: where the cost of goods stops setting the price, the price is set by whatever the counter will bear.

Two named analysts disagree about where this ends, and the disagreement is worth carrying rather than resolving. Paul Zimnisky's view is that retail margins remain too high. Farshid Roshanravan of Rayan Gems takes the harder line on the asset itself: "There is no resale value for lab-grown diamonds." Those are compatible positions and they point at the same exposure from opposite ends, one at the margin and one at the residual.