RAPAPORT... John Hayes and Kathe Mai run their retail jewelry stores with fair trade in mind, and they couldn’t imagine it any other way. We spoke to Hayes, owner of Goodman’s Jewelers in Madison, Wisconsin, and Mai, a partner at Trios Studio, in Lake Oswego, Oregon, about their principles and their profits.
Rapaport Diamond Report: How do you define fair trade?
Kathe Mai: Fair trade is something that treated the earth fairly when it was removed and treated the people fairly when they were mining it, cutting it and producing the piece of jewelry.
There are a lot of people in this industry who do business ethically. They don’t necessarily have all the protocols in writing, but they do it. I think fair trade is about the little guy standing up and saying, “This is what we’ve always believed and how we’ve always done it. Now we’re going to write down the path that it takes so there is that supply-chain transparency.”
John Hayes: For me, it’s the only way. I have the integrity of 75 years of business to protect, which is a responsibility that I don’t take lightly. My predecessors in the business are Rotary Club members and they taught me the Rotarian way, which is the four-way test. The test is four very basic questions that anybody can apply to any situation:
1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better friendships?
4. Will it be beneficial to all concerned?
It’s important to me as a retailer because I have made a commitment to our community and our customers to supply them, to the best of my ability, with a product that they can be proud to give as a representation of their affection or their achievements. Anything less than that just wouldn’t be right.
RDR: Why do you make fair trade part of your business model?
JH: We’re located in downtown Madison, just two blocks from the state capitol and four blocks from the University of Wisconsin-Madison campus. Our location has always kept us involved in whatever’s happening at the university.
The University of Wisconsin-Madison has one of the largest contingencies of volunteers in the Peace Corps.
So international issues are really at the forefront of our community with that connection.
Oftentimes we get questions about our products before they even become a hot topic because of the heightened awareness of these issues among our customers. Due to our involvement in Jewelers of America (JA), we are able to have answers for them.
KM: Trios is comprised of three women who are all designers and goldsmiths. We are very committed to the fair trade concept and that way of doing business wherever possible. It’s not just a marketing tool; it is our promise to “live the talk,” to care about the environment and the people who make the products that we sell and love.
RDR: How have you promoted your fair trade practices?
KM: For our first Christmas promotion, we came up with a plan that anything that the customer bought would be 10 percent off. Then we would match that 10 percent and give it directly to Kandoma school in Malawi, which is the only school in the region where our Nyala® rubies are sourced.
One client bought a $6,000 ring and she was so excited about the promotion that she donated her $600 discount as well. She paid full retail for the piece and was thrilled to do it.
In my experience, it’s not all about price, especially not the cheapest price. It’s about our relationship with suppliers. It’s about who we spend our money with. It’s about our relationships with our customers.
JH: We’ve been very fortunate. But it takes hard work. We continually promote our position on our website and in the store. After the movie “Blood Diamond” came out, I was interviewed on Madison’s radio talk show program and that was followed by an in-depth interview in the local magazine, Madison. All of this has helped to reinforce our position in the marketplace.
RDR: Which suppliers do you find meet your criteria for fair trade and social responsibility?
JH: We continually look for suppliers who have similar philosophies to ours. That means people like Hoover & Strong and SA Gems.
I’ve had customers for quite a few years now who have been seeking recycled gold because they don’t want to be involved in digging up the ground, chemical processing and all that. So it’s really helpful to have some sources like Hoover & Strong.
Another company that we deal with, local to us in Middleton, is called Sarah’s Hope Jewelry, a small manufacturing company that gives 10 percent of its gross receipts toward setting up microloans to help women in developing countries.
KM: We source from Trigem Designs, the jewelry division of Columbia Gem House. My customers really understand the recycled gold issue as well. I can’t tell you how much gold our customers have been trading in for store credit.
RDR: What are some of the more challenging aspects of running your stores in the way that you do?
KM: Sometimes I can’t sell items that I would love to sell because I can’t stand behind them. I don’t want my customer unhappy or some bad press to happen after the fact because I didn’t do my homework and deal with someone who was ethical.
JH: When the Burmese ruby issue came up, I talked to a lot of our suppliers and unfortunately some of them didn’t know where their product came from. So again, it really drives home the importance of knowing where your product comes from and staying aware of the issues.
RDR: How do fair trade practices affect your bottom line?
JH: Today’s business environment requires us to set ourselves apart and to stay constantly on top of the issues. Our customers have rewarded us by voting us as the best jeweler in Madison. It has given us an advantage, even in this sluggish economy.
KM: A fair trade gem can be a determining factor in a client taking action and making a purchase right now, not just thinking about it and talking about it. It’s nice to be able to feel that one person can make a little bit of a difference. That strikes a chord with our clientele.
We also structure things so that we actually like what we do, and I think that comes through to our customers as well. We have been able to stay competitive, even though the economy is pretty scary right now.
Article from the Rapaport Magazine - March 2009. To subscribe click here.