Where do you typically shop for diamond engagement rings? Cartier? Harry Winston? Tiffany's? James Allen? Jared? COSTCO?

Yes, it looks like Costco is competing with the other high-end diamond jewelry retailers in the market. While it's definitely not the first place one would think of when they think of diamonds and engagement rings, Costco has carved an enviable niche in the diamond market.

Costco, the largest warehouse retail chain with membership, has established a veritable line of wedding gowns and now it's also selling a 6.77-carat diamond solitaire engagement ring for a cool $1 million.  While some may gasp that it's too pricey (of course, who but Nicole Richie, Kim Kardashian and Heidi Klum could afford such a stunner, the ring is ironically being sold at a bargain.  The International Gemological Institute has declared the flawless diamond ring to be valued at $1.6 million.

No, it's not the first time Costco has had diamonds in its inventory, but it IS the first time it's selling one at such a high price.

Now why would a bargain store include diamonds amongst its budget selection? Well, the shop exists that there is a market for diamonds there because Costco is popular with high-end shoppers looking for a bargain.  And I guess that statement does have some feeling behind.   I know that I used to live near a Costco in New Jersey and I remember my relatives from New York coming in just to shop at the store because it had everything and it was all a bargain.

But would those people be the kind to shop for diamonds? Maybe not, but it's an interesting experiment. 

"Why not? We have upscale customers who know that we offer value and an unconditional guarantee," says Richard Galanti, a Costco executive.

Will Costco prove to be major competition for jewelry stores like Tiffany's and online diamond retailers like James Allen?  Galanti says they already do "substantial business, selling about 100,000 carats of diamonds a year."
It seems like it could work. After all, Costco is going to include these diamonds found elsewhere, but they're going to sell them at much bigger bargains than their competition. 

Besides diamonds, Costco stocks clothing, appliances, furniture, electronics, and  wine.


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