How do i become a diamond dealer and manage shipping?

noobz · Dec 21, 2012

Hello everyone!
I would like to be a diamond dealer. I'm of african origin and my father comes from central africa (which complies with the Kimberley process). Through one of my uncle's network, i was able to get in touch with several mining cooperatives and small scale mining companies. They all have export authorizations provided that the minimum export quantity set by the government is reached.

The challenge for me is that I want to set up a rough diamond import business in Canada (buying direct from those suppliers). I've already found a reputable diamond cutter and I've also contacted some jewelry manufacturers in town who will be ready to purchase from me. I plan to sell polished diamonds <1ct, F-H, VS1-VS2, with a 40-45% discount on Rap COD terms.

My main concern is the safety issue. Even though i'm african myself, i do not want to go to Africa to buy the stones. It is a very unsafe country. Plus the town is small, and going there will certainly bring an unwanted attention on me.

One option i have is to pay the flight ticket to the supplier to Canada+hotel fees.
However, i know that one of the supplier i talked to already brings parcels to his customers in Germany.

Is it possible for me to meet him in Europe, inspect the stones and then take them back with me. Is there a third party company that can arrange for viewing rooms and shipment from Europe to Canada? I am also concerned about the KP requirements. I know that the diamonds will be in a sealed container when he'll arrive in Europe with a certificate under my name. If it is possible for me to inspect the stones in Europe, how do i get the stones to be sealed again with a new certificate knowing that the company is registered in Canada and not in Europe?

I'm a total newbie in this field. Maybe my question is too basic, but so far i could'n find anyone offline to give me another alternative than going to Africa to get the stones myself which i do not want to do.

Thanks in advance for your help.

kenny · Dec 21, 2012

If you have to ask these questions on a public Internet forum you are wasting your time.

BTW, Africa is not a country.
It's a continent made up of several countries.

denverappraiser · Dec 22, 2012

Becoming a diamond dealer is easy enough. Pour a bunch of money into diamonds, print up some business cards, put up a website, and try and convince other people to buy them from you. It’s a piece of cake. That's approximately how you become a dealer of jsut about anything. The tricky part is making money as a diamond dealer. That’s HARD, and you’ve missed nearly all of the pitfals that wipe people out. What pitfals?

Sales. Buying diamonds is relatively easy. Selling diamonds (and anything else) is hard. It takes advertising, it takes time, it takes people, it takes talent, it takes connections, it takes money.

Quality control. You state in your post the quality and sizes that your mine will produce. That’s not how it works. Mines produce whatever God put there or less. Your job is to sell THAT. Rarely does that work out to be exactly what you would have had in mind. A similar problem happens with cutting. Cutters produce ‘ideal’ cuts because they have a market for them and they produce other sorts of cuts because they have a different market. Dismissing the whole cutting industry with ‘I’ve already found a reputable cutter’ is like going into the automobile business and solving the manufacturing problem by saying you’ve already found a reputable mechanic.

Credit/collection. Yeah, I know you said COD terms but that’s not how it plays out. The diamond business runs on a complicated consignment system known as ‘memorandum’ and that’s about credit. You can try to skip it and design your own system or just directly retail yourself but that goes back to the sales issue. If you do it like everyone else, you have a significant exposure to the usual credit problems when your customers don’t pay their bill, fail to send back stuff when they were supposed to, send back stuff when they weren't, etc.

Notice that the risk of getting killed in Africa doesn’t even make the list but that would definitely put a damper on your day. There ARE people who can make a few bucks by direct importing and manufacturing diamonds from far away places but the real money being made here is on the other side. You’re not a businessman, a partner or even a customer. You’re the victim.