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The Trust Relationships Behind Ethical Supply

By Leah Meirovich
 
Small retailers rely on an honor system with their vendors to ensure they know the origins of the stones they sell. 

Craig Underwood
Underwoods Fine Jewelers
Fayetteville, Arkansas

What are your essential requirements when selecting diamonds?

Cutting proportions, without a doubt – the polish, symmetry alignment, how light is reflected, and if there’s any light leakage. Today, sourcing is also a big issue, given the ban on Russian diamonds. If the diamond is Russian, I won’t even look at it. Once we pass that hurdle, cut is the most important, rather than the actual grade of the diamond. For instance, say you were in school, and you did a term paper and you got a B. Is it an 80 or an 89? Obviously an 89 is closer to being an A, and an 80 is closer to being a C, but both are a B. When we grade our diamonds, we’re looking for the higher end of the B.

Is the source important to you?

Other than diamonds that are sanctioned, sourcing doesn’t matter, as long as it’s ethical. We don’t have a premium for a Canadian diamond versus an Australian diamond, or an artisanally mined diamond compared to one from the big miners. If it meets our ethical sourcing requirements, it’s fine.

What is your biggest challenge when buying diamonds today?

Selection. I was looking at a 5-carat radiant diamond. I was going to purchase it, but I was also looking for comparable ones to see how it stacked up. I searched on RapNet for anything from 5 to 5.99 carats, H color, SI1 clarity, and there were only eight diamonds in the entire United States available in the 5-carat range. So that kind of thing makes it very difficult to compare.

How much do you care about who your supplier is?

We have a list of our preferred suppliers, and I would rather deal with them first. After that, there are other suppliers that we look at, but yes, we absolutely care.

What part does social responsibility play in your choice of suppliers?

It’s huge. We won’t deal with any suppliers if they are not taking steps to ethically source and be responsible. That’s an absolute requirement.

So are you on top of where they are sourcing their diamonds?

As much as I can be, yes. I don’t see their records directly, but we typed up a letter and sent it to our suppliers, letting them know that they needed to adhere to the rule of not buying Russian diamonds according to US law, even if they went through India. But this goes back to how important it is to trust your suppliers, just as our customers have to trust us on where we’re getting our diamonds. We can only do so much in guaranteeing that our suppliers are being honest with us.

How and where do you source your diamonds?

That’s a hard question. We source them from our preferred diamond suppliers, some from India, some from the US, from Europe. They come from different areas and via relationships we have built up over the years.

How has your buying process changed over the years, and why?

We have a lot more suppliers we deal with currently, given all the information that’s available. When I first started out, if a diamond retailer was looking for [stones with] American Gem Society (AGS) cut grade 0, there were only three main sources in the industry for them, and you were very limited. And because of the lack of transparency and the lack of information in those days, if you needed a diamond, you would have to call your different sources. If they didn’t have what you wanted, they made phone calls among themselves and exchanged diamonds.

Now, with all the transparency of information, you can obviously go straight to RapNet or Idex or any of the various sources, and you acquire much greater knowledge of what’s available in the industry. So in my almost 40 years in the industry, that’s what I see as the biggest change: the free-flowing amount of information that’s out there.

When you’re purchasing diamonds, is price the driving factor?

Absolutely, price is a factor. I mean, we can’t stay in business if we’re not competitive, so it absolutely must be. Price is huge. Customers expect us to give them competitive prices, and we can’t do that if we aren’t getting the best price ourselves.

What percentage of the goods you sell are memo, as opposed to your own inventory?

We prefer to have a large inventory, so we have a lot of our own diamonds in stock. We like it that way, so that a client can actually come in and see the individual diamonds. We don’t rely too heavily on memo; we do use it, but it’s not our normal operating procedure. I’d say about 10% of the diamonds we sell are memo, and about 90% are diamonds that we own, which I think is unusual for the industry.

How do trends and the seasonality of demand affect your buying process?

We gear up for the busy Christmas season, and then there are different times of the year that are busier than others, so at those times, we buy more. There are normal cycles you have every year. In terms of trends, yes, we are influenced by them. Ovals are very hot right now, and if I can find a beautiful oval in a good grade, at a good price, I will buy it any day of the week just to have it in the store, because of its popularity.

We do buy as trends change, and we buy things that we don’t necessarily need for our inventory, but if it’s trending and it’s a good price, I’m going to buy it and add it to our inventory, because I know we’ll be able to sell it. I’d rather that than rely on memo, because often, if you do, you won’t get the pick of the litter.

Stewart Brandt
H. Brandt Jewelers, Natick, Massachusetts

What are the most important requirements for you when selecting diamonds today?

Getting the best quality at the best price, the best cut; that it be well-made, priced right, and honestly graded.

Is the source important to you?

I have to trust that my vendors are doing the right thing, because I don’t have the time to check up on them.

What is your biggest challenge when buying diamonds?

Finding goods at prices that aren’t stupid or outrageous. I had a guy walk in here with a diamond from an internet company, and they were going to sell him this diamond for less than anything I could find on RapNet or Polygon, or than any of my dealers had. How do I compete with that?

How much do you care about who your supplier is?

A lot. It took me a long time to train my suppliers to send me what they know I like. If I see a stone on one of their websites and I call up and tell them I want it, I expect them to say, “No, that’s not for you,” if they don’t think it’s right for me. And they do, because I don’t want to waste my time, my money, or their time and money.

What part does social responsibility play in your choice of suppliers?

I can’t dictate how they do business; I can only hope they’re doing the right thing.

How has your buying process changed over the years, and why?

Back in the day, when I started, there were guys on the road, and they’d walk into a store, and they’d have parcels of stones, and not a single one of those stones had a Gemological Institute of America (GIA) report. You had to use your own skills to choose the best ones. The GIA, in a weird way, has taken some of the fun out of it. I’m also stocking less and doing more on-demand purchasing.

When you’re purchasing diamonds, is price the driving factor?

Price isn’t my driving factor, value is. I want the best stone for the best price that will satisfy my customer’s needs.

What proportion of the goods you sell are memo, as opposed to your own inventory?

About 30% to 35% are memo.

Anything else you’d like to share about your experience as a diamond buyer?

My best buys are what I purchase from the selling public.

Images: Underwoods Fine Jewelers; H.Brandt Jewelers

Article from the Rapaport Magazine - May 2022. To subscribe click here.

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