How do these little online ideal diamond vendors stay in business?

[soontomarry2]

When I first began my diamond search, my goal was to purchase from a local non-chain diamond/setting vendor. I thought I would be supporting the little guy, feeding the entrepreneurial spirit, etc…

However, as I learned more, it seems that the few online diamond vendors who specialize in ideal cut diamonds are even smaller little guys, so to speak, than local diamond vendors. Although the range of diamonds I was looking at was fairly narrow, I kept finding the same diamonds repeatedly. This is not necessarily bad, but it seems to suggest that there is a low turnover in online inventory. With online vendors providing both superior personalized customer service, and lower prices than their brick & mortar counterparts, how do they manage to stay in business? Admittedly, I don''t know a whole lot about business, especially not the diamond business, but it seems that their lower prices/margins would force them to sell much more than they do.

Any thoughts?

 

[ChunkyCushionLover]

Date: 3/12/2010 5:00:14 PM
Author:soontomarry2

When I first began my diamond search, my goal was to purchase from a local non-chain diamond/setting vendor. I thought I would be supporting the little guy, feeding the entrepreneurial spirit, etc…

However, as I learned more, it seems that the few online diamond vendors who specialize in ideal cut diamonds are even smaller little guys, so to speak, than local diamond vendors. Although the range of diamonds I was looking at was fairly narrow, I kept finding the same diamonds repeatedly. This is not necessarily bad, but it seems to suggest that there is a low turnover in online inventory. With online vendors providing both superior personalized customer service, and lower prices than their brick & mortar counterparts, how do they manage to stay in business? Admittedly, I don''t know a whole lot about business, especially not the diamond business, but it seems that their lower prices/margins would force them to sell much more than they do.

Any thoughts?

Much lower overhead. Virtual diamonds cost very little to sell especially if you are a drop shipper, major costs are marketing and sales staff.

 

[Karl_K]

A 2-3 person online shop can sell as many diamonds in a month than the average b&m does in 12 months with 20 employees.
It is more efficient and less overhead.

 

[MichelleCarmen]

Date: 3/12/2010 5:14:32 PM
Author: Karl_K
A 2-3 person online shop can sell as many diamonds in a month than the average b&m does in 12 months with 20 employees.
It is more efficient and less overhead.

Yep, less overhead and probably sell as much or if not more than standard stores. When looking in B&M stores, often most of the customers are just browsing/window shopping. It''s not as if 20 people a day are buying $10K diamonds from mall jewelers.

 

[denverappraiser]

If you do a Google search for ‘discount diamonds’ or some similar phrase you’ll find that there are hundreds of thousands of hits for folks that are trying to be an online piece of the diamond business. Most of them are outfits that you would never consider patronizing and most of them aren’t doing very well. The ones you are seeing and are asking about are a few dozen dealers who are succeeding in a sea of mediocrity. How do they do it? They work hard, they make savvy investments of their capital in terms of inventory and advertising, they attend to their customers needs, and they pay careful attention to what they’re doing. Curiously, that’s exactly how the successful B&M’s do it too.

Maybe there’s something to this plan, I wonder why everybody doesn’t do it? Oh yeah, work… money… attention.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Dreamer_D]

Just from the searches I do, it seems to me that some of the PS vendors we talk about regularly get big drops of 50 or so diamonds every 6 weeks or so... that seems like a high turnover to me!

 

[jan can]

Date: 3/12/2010 7:03:04 PM
Author: MC

Date: 3/12/2010 5:14:32 PM
Author: Karl_K
A 2-3 person online shop can sell as many diamonds in a month than the average b&m does in 12 months with 20 employees.
It is more efficient and less overhead.

Yep, less overhead and probably sell as much or if not more than standard stores. When looking in B&M stores, often most of the customers are just browsing/window shopping. It''s not as if 20 people a day are buying $10K diamonds from mall jewelers.

The B&M stores aren''t specializing in diamonds. They have many different products that can pay for their overhead.

 

[TheDoctor]

There is little sorcery, only hard work. Truth is, anyone with a few bucks and tenacity can sell diamonds.
That''s why you get 100,000 hits when using Google to reference diamond merchants.

I have the deepest respect for those who can deliver a decent product beyond the loose stone.
Fact is, whittle that 100,000 down to 300 or less. Any idiot can sell diamonds.
Many credible merchants can be found here. Online vendors who pay to be here are #1 choice. They work themselves to the bone for their clients.
Whittle down that number to those who produce mountings that will survive wear and tear beyond 10 years, and I don''t know.
White gold is a bear. American manaufacturers assure buyers that rhodium finish is fine. Choose platinum if you are wary.
But...ask any engineer. Vickers 140 (platinum) versus Vickers 238 for 19 karat white gold. Settings that hold diamonds need to absorb physical energy in order to trap gemstones. Soft alloys don''t have the ooomph. Sure, the stone is trapped, but for how long??
I''ll risk being booted from the forums for suggesting that one should go in a particular direction, but I am a consumer advocate, and, therefore, it is my duty to suggest that there are modern alloys that work as well as conventional, cheaper alloys, and that those who are using beige alloys and rhodium plating them need to catch up. There is a far better white gold alloys being marketed within the U.S., and all you need to do is ask and I will provide you with a link because I shouldn''t be promoting them here...although, they have done a fine job of attracting my business. Why should consumers be asked to accept something, like beige alloyyed gold, which needs constant attention, when there is a credible alternative?