Before we explore the skill sets you’ll need to succeed at negotiating gem prices, you must understand the following four principles. These apply to any negotiations in any business. In addition, don’t underestimate the importance of your reputation and credibility, especially in the people-oriented gemstone business.

1. Be Willing to Walk Away

My father once taught me the negotiating principle that “he who cares less, wins.” In other words, the person who cares the least about making the deal — the person willing to walk away — will likely “win” the negotiation.

Good gem investors say no to good deals all the time. If they can’t get a great deal on material that they know very well, they wait until they can. You’ll run out of money long before you run out of “good deals,” so be patient. Wait for the deals you know will be profitable.

How much you care about the deal depends on your other available options. If you have no other options, then you’ll likely care a lot. You’ll be less willing to walk away from the deal. On the other hand, if you have a few other options, then you’ll have more freedom to…