I was re-reading an article today written by a jewelry industry “sales expert.” He stated that customers want three things from a jewelry store:
- Great service
- Top quality products
- Low price
He then goes on to say that it would be great if you could figure out how to give them all three and still make money, but no one ever has. His conclusion was that you have to figure out which two you can provide that will allow you to stay in business and make some profit.
I have read that article several times in the past months but today it seemed to strike a real nerve with me. Perhaps it is because we work hard every day to provide all three things to every one of our clients and we continue to stay in business and grow.
How can we do what the “sales expert” says is impossible; we focus on our clients and have developed a better way to sell diamonds. The traditional jewelry store has been doing business the same way for decades. They build or rent a store, decorate it with lavish display cases and lighting, stock it with hundreds of thousands if not millions of dollars of inventory, advertise on billboards and in magazines and newspapers, hire sales personnel to wait on customers and then try to sell customers what they have in the display cases. All went well with this strategy for many years as long as their competitors did the same. They could mark items up 100% to 200% and thus pay their overhead and have plenty left over for the storeowner’s pocket.
About ten years ago, the jewelry industry was given a jolt by the introduction of the Internet. At first the storeowners simply said, “Nobody will buy a diamond online” and went on doing business the same as usual. However, over time, the jewelry stores suddenly realized that they now faced a new type of competition. This new competitor did not have the high overhead of a retail store with inventory so could offer prices that were a fraction of those in the traditional jewelry store. Moreover, what made the threat seem even more insidious is that these competitors often were in other cities and states.
The jewelry storeowner quickly started blaming all their problems on the “Internet” rather than looking at their own business and asking what they need to do to compete in this new game. They started using scare tactics like saying merchandise sold by online retailers was inferior and the “rejects” from the traditional jewelers stock. They warned that online retailers were switching diamonds or certifications. They cautioned that online retailers were not diamond experts and thus could not provide the advice and product compared to the “established” jewelry store.
Ironically, all the arguments they were using against the online retailers were really the shortcomings of many, if not most jewelry stores. These statements are based on fear, not fact, because the typical online diamond retailer can sell higher quality diamonds for less money. In addition, online retailers often have more experience and diamond expertise than the tag readers who stand behind most jewelry counters. When I mention online retailers, I am describing established businesses that find most of their customers online and I am excluding most of the snake oil salespersons who hock their goods on eBay.
Getting back to the three things clients want (quality, price and service), it is fairly easy to see how online retailers can provide better quality and price but what about the service. All too often, the jewelry store defines service with the old concept of having inventory, a nice store and fixing items when they break. However, the online retailer has defined service as providing the client with the best advice and product possible without intimidation and often from the convenience of their home.
At Diamond Source of Virginia, we seek to find the best diamond in terms of value that meets our client’s specific requirements. We search the inventories of hundreds of cutters and wholesalers worldwide to find the best of the best diamonds. Then we offer to help set the diamond in rings and other jewelry items using some of the top designers and manufacturers in the country. Because we do not own inventory, we can be unbiased and on the client’s side rather than trying to push some item that has been sitting in a display case for years. We provide advice not only on the diamond, but also on the mounting, the insurance, and the cleaning of the jewelry item.
The bottom line is that we do provide what the client wants (great quality, low price and exceptional service) and as a result, have most of our business come from referrals and repeat buyers.
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