October 4: If you’re a jeweler and you look at top of the line retail jewelry designs, you don’t see what other people see. You see a series of business issues. One of the biggest issues is simply sourcing gems. The sheer range and scope of modern jewelry are astonishing, particularly in the retail environment.
Modern jewelry contains a particularly broad range of types of gems and a complete color spectrum unlike any other industry on Earth. This vast range of gems also includes a particularly difficult cost base for jewellers.
Many modern jewelry pieces are comprised of multiple gems. This range may include some very hard-to-find types of gems from a supply perspective. This is where the cost base comes into play. Sourcing multiple types of gems for retail designs is very much an acquired taste.
Problems may include quantities of gems, size of gems, and, naturally, an obstacle course of different prices, depending on suppliers. These are the issues that directly affect profits, cash flow, and can directly impact the bottom line.
The wrong way and the right way to source gems
Sourcing gems in a high-volume turnover retail environment can be a pretty thankless task for jewelers. You can sell a lot of jewelry, but you can also get yourself into some pretty thankless situations with your costs.
Let’s start with the wrong way to source your gems:
- Absolute worst practice is to source gems directly off the mainstream market at spot prices. Spot prices are prices for individual gems, purchased on a needs basis. Inevitably, you will be paying top dollar. Even good suppliers can’t sell you individual gems at bulk market prices. You must pay their markup on smaller numbers of gems.
- The other side to this not-very-appealing situation is that this type of sourcing is unbelievably inefficient. It can seriously interrupt workflow. Why should you have to do a sudden mad scramble for core business gems like tourmaline or sapphires to fill a simple order, for example? This is to say nothing of the aggravating process of managing order times, work timeframes, etc.
- This method of sourcing is also a very good way of blowing your cash flow out of the water. There is simply nothing good to be said about this slapdash approach to sourcing.
In contrast, the best way of sourcing your gems is 100% systemic and far simpler:
- You need a good supplier with a truly huge range of gems. This range of gems should include all your core business needs.
- The supplier should be offering solid discounts and very clear terms of sale. (Some suppliers don’t. This is a particular risk when buying small quantities on an ad hoc basis.)
- The supplier should have verifiable business credentials as a regular source for your gems.
- The supplier should clearly show good technical knowledge.
- Shipping timeframes should not be an issue.
Straightforward as all this may seem, problems with sourcing gemstones can happen on a disturbingly regular basis. Retailers, particularly online retailers, need everything to run smoothly and to be able to manage their orders efficiently. That’s why you need to be extremely thoughtful about where you source your gems.
If you’re looking for some help with interstate suppliers, RMC is right here when you need us. A gigantic range of gems from around the world is truly unbeatable. We can help you with all sorts of jewelry acquisitions, including bulk buy, high-end gems, and more.
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Divya Agarwal
