Scarcity by Design

What if I told you that Diamonds, those glittering stones hailed as rare treasures, are not rare at all. In fact, they’re one of the most common gemstones on Earth. Yet, for over a century, they’ve been portrayed as rare gems and sold as symbols of eternal love and exclusive wealth.

This grand illusion wasn’t accidental, it was the result of one of the most successful marketing campaigns in history, orchestrated by a company known as De Beers Corporation.

This is not just a story about diamonds. It’s about the power of perception in marketing, and for founders and entrepreneurs, it’s a masterclass in brand building, scarcity marketing, and strategic monopoly.

Contrary to popular belief, diamonds are not geologically rare. The supply of diamonds is vast, mined in countries from Russia to Australia, Canada to Botswana. What keeps prices high isn’t scarcity but the illusion of scarcity, carefully crafted and maintained by De Beers for nearly a century.

Before the 1870s, diamonds were indeed relatively scarce. But then, large deposits were discovered in South Africa. This sudden influx could have tanked the market. Instead, De Beers, founded in 1888 by Cecil Rhodes and later steered by the Oppenheimer family, took control of nearly every major diamond mine and distributor. At its peak, De Beers controlled more than 90% of the global diamond supply.

Now they had a monopoly on the supply of diamonds, the next thing they did was engineer scarcity. But that wasn’t all. Here is a breakdown of how the company managed to transform Diamonds into a symbol of love and wealth. 

1. They created artificial scarcity

By controlling the mines and distribution channels, De Beers could stockpile diamonds and release them slowly to manipulate supply and keep prices high. It created artificial scarcity, a classic case of supply-side economics tailored to marketing.

2. Advertising Genius: “A Diamond is Forever”

In 1947, De Beers launched what would become one of the most iconic slogans in advertising history. Crafted by copywriter Frances Gerety, the phrase “A Diamond is Forever” tied the stone to love, commitment, and eternity.

This wasn’t just a slogan; it was psychological warfare. The campaign redefined engagement and marriage. Before the 1930s, diamond engagement rings weren’t the norm. Within decades, they became non-negotiable. By the 1980s, more than 80% of American engagements featured diamond rings.

3. Cultural Engineering

De Beers didn’t stop at ads. They infiltrated Hollywood, giving diamonds to actresses, scripting love scenes with rings, and sponsoring magazines and influencers of the time. They embedded diamonds into the fabric of Western romance and aspiration.

4. Discouraging Resale

To prevent secondary market competition, De Beers actively discouraged diamond resale. The idea was reinforced that diamonds, while valuable, have no resale value, not because they don’t, but to prevent a flood of used diamonds hurting the illusion of scarcity.

The De Beers model raises a vital question: Is it legal to manufacture scarcity?

The answer is yes, with caveats. While modern antitrust laws have since challenged De Beers’ monopoly (leading to settlements and a reduction in market control), the broader tactic of creating perceived value through marketing, controlling supply, and shaping consumer psychology is legal and widely used.

It becomes illegal when companies engage in price-fixing, deceptive advertising, or monopolistic practices that violate antitrust laws. De Beers skirted many of these issues by operating internationally and avoiding U.S. jurisdiction until the early 2000s.

This isn’t just a history lesson. De Beers offers a blueprint for brand power that modern startups can ethically and legally replicate in other ways.

1. Perception is Value

“Products are made in factories, but brands are created in the mind.” — Walter Landor

De Beers turned a common stone into a luxury item. Ask yourself: What story can your brand tell? How can you elevate your offering through perception?

✅ Actionable Tip: Craft a unique brand narrative that aligns with deep emotional values like love, legacy, and achievement. Don’t just sell a product; sell a story.

2. Scarcity Still Sells

Even in a saturated market, perceived scarcity drives demand. Limited editions, exclusive launches, or membership models trigger FOMO (Fear of Missing Out), which drives urgency and conversions.

✅ Actionable Tip: Use limited-time offers, early-access programs, or batch-based inventory releases to make your product feel exclusive, without being deceptive.

3. Build Cultural Relevance

De Beers inserted diamonds into movies and wedding culture. In the modern age, cultural relevance means integrating with influencers, memes, and moments.

✅ Actionable Tip: Partner with influencers not just for reach, but for meaningful storytelling. Embed your product in trends and lifestyle narratives.

4. Control Your Distribution

You don’t need to own a monopoly to create a premium experience. Control your product presentation, distribution channels, and customer journey as tightly as possible.

✅ Actionable Tip: Avoid spreading your product across too many low-end platforms. Focus on environments where your brand can be seen as aspirational.

5. Protect Your Position

De Beers made sure competitors couldn’t erode their positioning by discouraging resale and keeping tight brand control. While unethical tactics like market blocking are illegal, protecting your brand’s equity isn’t.

✅ Actionable Tip: Maintain high standards for representation, pricing, and distribution. Don’t dilute your brand trying to be everywhere.

Final Thoughts: Crafting Perceived Value Without Deception

De Beers’ diamond dominance shows us that value is a construct. If you can own the narrative, you can own the market. But modern consumers are savvier. Transparency and trust now matter as much as perception and scarcity.

The lesson for today’s founders isn’t to deceive or monopolize—it’s to strategically shape desire. Use marketing, storytelling, and brand design to turn your product from a commodity into a cultural cornerstone.