The first quarter of 2019 left wholesalers feeling positive, voicing optimism that the momentum of the holiday season would continue into the rest of the year. Suppliers have found different ways to attract clients, while lab-grown diamonds, technological trends and economic shifts remain topics of trade discussion.
New York: Passing the test
“Our business for 2019 is going in the right direction,” said Yosef Poplack, vice president of sales at New York-based wholesaler Gem Wave Inc. He attributed the positive sales trend to the company’s service-oriented business model and the fact that all the diamonds it sells are “strictly for real.”
Selling mined diamonds is so essential to the value Gem Wave offers its customers that it has installed a machine in the buying room to detect lab-grown. “Every parcel that comes in and goes out is tested,” Poplack emphasized.
Melee is the company’s main product, although it also specializes in loose rounds 1-carat and under, and matched pairs of fancies, said Poplack. He sells to clients across the US and Canada, as well as internationally.
“Prices for some of the smaller goods are increasing, but for the most part, the melee market is pretty stable,” he observed, noting that he couldn’t speak for larger certified goods.
He cited the company’s advertising in publications such as
Diamond Pulse and
Rapaport Magazine as helping attract new accounts. “People call me and say, ‘We saw your ad,’” he said.
He added that Gem Wave used email “moderately,” rather than “inundating customers,” but that social media was “not really for our product.”
Chicago: Excellent cuts
“Very good” was how Keith Zimmerman, president of wholesaler National Diamond in Chicago, Illinois, summed up the first quarter.
“It is very similar to the first quarter of 2018, which turned out to be an excellent year, even if the last two months didn’t exactly follow the pattern of the previous months,” he reported, adding that the government shutdown in December had made people hesitant to buy.
Inventory issues loosened up in January, and the trend has continued in the subsequent months, reported Zimmerman, whose company focuses on 90-pointers to 1.5-carat, SI1to SI2 stones in F, G, H and I colors. Ovals are “extremely hot,” he said, while cushions have “cooled off.”
Prices for small goods have dropped slightly, but “it is definitely becoming
more difficult to sell anything except excellent cuts,” he commented. “People are really demanding excellent-cut, GIA-certified stones.”
While he has not observed anything “unexpected” in the market, Zimmerman is keeping an eye on economic policy, noting that “tariffs are still possible, and they would impact business.”
Lab-grown is another potential issue that could affect sales. Although Zimmerman stressed that National Diamond would never consider trading in these stones, he is watching the lab-grown market, as it is “obviously having a large impact on smaller goods, which have gone down in price. At a certain point, the smaller goods will stop declining, but will that be 10-pointers or quarters? We still don’t know.”
LA: ‘Surprising’ momentum
The year so far has also been positive for Aronow & Ross, a wholesaler based in Los Angeles, California. “We were really happy with the first quarter,” said sales manager Ronen Goldberg. “We had a really good Christmas, and we thought there might be a slowdown at the start of 2019. But the momentum kept going — surprisingly.”
Aronow & Ross sells 0.50- to 3-carat rounds, but diamond studs are the company’s specialty. While its primary clients are in the Los Angeles area, it also sells nationwide. “Our bread-and-butter price points for the studs accommodate a lot of retail customers, which in turn helps drive sales for the retail jewelers,” said Goldberg. “Along with quality, it is one of the reasons we continue to expand our client base and not lose them to [online retailer] Blue Nile or similar companies.”
While word-of-mouth recommendations have been effective for generating business, Goldberg also credited social media, especially Facebook and Instagram.
Goldberg has not experienced any inventory issues. “I’m pretty consistent with my merchandise. Sometimes you need to pay a little more to get exactly what your customer wants. But that is just part of doing business,” he said. “It’s all out there. You just have to get the right client base that appreciates your product and is willing to pay for it.”
Article from the Rapaport Magazine - April 2019. To subscribe click here.