New York: Lack of loyalty?
“Normally, by the end of 2018, we would have had activity and people calling. We knew September would be slow, but there was no pick-up,” said Joshua Fishman, owner of New York-based wholesaler A. Fishman & Son Diamonds.
Noting that selling loose diamonds had become a “totally different business,” he explained that his trade had devolved into catering mostly to private clientele.
“The diamond business is governed by two philosophies that are sometimes mutually exclusive: 1. I’m going to sell you the cheapest good-looking certificate I can, and 2. I’m going to sell you the best diamond that I can within the grade level,” he observed.
Furthermore, he claimed, loyalty no longer exists: Everyone is looking to bypass the middleman. The internet, the more lenient Gemological Institute of America (GIA) reports and price lists have changed the industry, according to Fishman. “It used to be that people in the business talked about price per carat and not discount. People valued a diamond according to a feeling in their gut, based on their experience.”
As for what the coming year would hold, he was uncertain.
“My crystal ball shows no visibility about what tomorrow will bring,” Fishman stated.
Iowa: Made in the USA
American jewelry manufacturers are not getting the attention they deserve — especially the independent retailers and manufacturers often located in small communities around the country, according to Gary Youngberg, owner of Ames Silversmithing in Ames, Iowa.
Youngberg employs six people to manufacture jewelry in-house. Regarding the growing trend of manufacturing overseas, he drew a distinction between companies that make their decisions based entirely on the cost of labor, and those that simply want to sell the “cheapest jewelry possible,” as is evident in the poorer quality of melee and the thinner shanks they produce.
And then there’s the subset of manufacturers like Youngberg: “We can make products no one has — one-offs and limited-run pieces — for a very strong price and eliminate the middleman.”
Throughout his 42 years in business, Youngberg has had “pretty good Christmas seasons.” Overall, sales for 2018 were up slightly, and he expects that 2019 will mirror the previous year.
“We’re guided by honesty, quality and giving the customers what they want,” added Youngberg. “We do quality to the nth degree because the piece is sitting right in front of us. And we have the capability to produce a piece quickly.”
California: Getting specific
“Customers are much more particular in what they want, as well as being price-sensitive and value-conscious,” explained Moshe Salem, president of wholesaler MS Diamonds & Jewelry in Los Angeles, California. “On the positive side, it means if you have the right stone, you are more likely to make the sale and get your price — especially since some white SI goods are not as readily available as before.”
Ovals are very much in demand, and pear-shaped diamonds have made a slight comeback, especially 3 carats and above, reported Salem, who is also president of the Diamond Club West Coast (DCWC). At the retail level, he said he was seeing marginal evidence that people had emerged from their “hiding places” to buy “substantial” jewelry gifts again. He also noted that anything elongated — in cushions, emeralds, ovals — was trending in fashion.
Salem spoke from the added perspective of the DCWC membership, which increased by 45% this year. “Overall, most of the members would describe 2018 as ‘hit or miss,’ especially given the changes that have upended the marketplace — the internet, consolidations and lab grown.”
However, he pointed to the collaborative working environment the group fostered. “Members are sharing best tactics. For example, flip goods. If you have a good stone at a good price, don’t hang onto it. Sell it and move on.”
Given that the trade is still volatile, Salem predicted a shift to more niche business, summing up the value proposition as: “What can you do for me that no one else can?“
Article from the Rapaport Magazine - January 2019. To subscribe click here.