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NCDIA Seminar at JA New York

By: Michael Hakimian Senior Sales Manager, Almor Designs NCDIA Co-chair Marketing Committee

Michael Hakimian, Senior Manager, Fancy Color Diamond Division, Almor Design and co-chair of NCDIA’s Marketing Committee, gave a presentation at the JA Show on:

Natural Color Diamond Jewelry: An Affordable Solution to Low Margins

Michael prepared this summary of his presentation:

I had the honor of speaking about Natural Color Diamonds at the JA New York Summer Jewelry Show. The topic was “Natural Color Diamond Jewelry: An Affordable Solution to Low Margins.” After Barbara Wheat spoke about the benefits of joining NCDIA, I spoke about the main topic, along with advice on how jewelry retailers can get involved and grow their Natural Color Diamond business, also covered was some basics of Natural Color Diamond.

Currently, the jewelry industry is plagued with the problem of low margins, especially when it comes to white diamonds. There are many factors at play that can explain why there are such low margins in white diamonds. I decided to cover some of the most important ones, such as a pricing structure that is already in place to value them, the familiarity with white diamonds due to their wide use in the industry, diamond trading websites inside the trade and websites outside of the trade, and dumping by diamond dealers struggling for liquidity.

At the same time that the industry is struggling for margins in white diamonds, in the Natural Color Diamond business, there are high margins, customer excitement, and affordable selections.

There are a variety of reasons why there are higher margins in Natural Color Diamonds than in white diamonds. These include: No industry accepted pricing structure for natural color diamonds, Lack of market familiarity with Natural Color Diamond pricing and value, Rarity of Natural Color Diamonds (Supply), Customer Excitement that is powered by Hollywood Stars, Auctions, and heavy advertising by important jewelry companies (Demand), the One-of-a-kind feel of each Natural Color Diamond, and the Allure of Luxury that Natural Color Diamond jewelry provides. Together, these factors along with others, have laid a foundation for higher margins in Natural Color Diamonds than in white diamonds.

Though jewelry retailers are showing increased interest in Natural Color Diamond jewelry, some believe that affordability is a barrier to entry. Some of this is due to the record auction sales of Natural Color Diamonds, and extravagant celebrity color diamond purchases. However, there are jewelry manufacturers that only manufacture Natural Color Diamond jewelry or have large selections of Natural Color Diamond jewelry, and they do carry pieces at affordable price points.

NCDIA research indicates that the “Sweet Spot” for jewelry retailers is between the Retail Price of $2,500 and $50,000. Pictures of pieces from NCDIA Wholesale Members were shown at the affordable retail price points of $5,000, $10,000, $25,000, and $50,000. The fact that there are affordable selections within the Natural Color Diamond Market, allows jewelry retailers to purchase a selection for their store without breaking their budget and lays a foundation for selling higher-end pieces in the future. Consequently, Natural Color Diamond jewelry is an affordable solution to low margins.

For retailers interested in getting started and/or growing their Natural Color Diamond business, some advice given was to join the NCDIA as a Retail Member which will help with education, advertising, and sourcing; educating yourself and your staff, promoting the Natural Color Diamond inventory constantly and in visible places, building a respectable inventory (Variety of Colors, Price Points, Sources), to do trunk shows, and to stress to employees to show the new Natural Color Diamond inventory to all the store’s customers.

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Natural Yellow Diamonds: A Special Opportunity for Jewelry Retailers

 

By: Michael Hakimian Senior Sales Manager, Almor Designs NCDIA Co-chair Marketing Committee

By: Michael Hakimian
Senior Sales Manager, Almor Designs
NCDIA Co-chair Marketing Committee

 

One of the reasons why natural fancy color diamonds have so much value is their rarity. Out of each 10,000 carats of diamonds, only 1 carat is considered to be a natural fancy color diamond. Although natural color diamonds are very rare, Yellow diamonds are less rare than their natural Pink, Blue, Green, Red, Purple, and Orange counterparts, as seen below. One of the results of a higher supply and past customer demand have been that natural color diamond dealers have stocked a much higher supply of yellows than any of the rarer natural fancy color diamonds. Although this means that they are priced less than the more rare color diamonds, this provides a special opportunity for jewelry retailers.

color diamond rarity chart

Although every jewelry retailer would like to sell the most high-end of the natural color diamonds, often these stones may be hard to source.  Also, even when they are sourced, they may not be able to give many options to show to their customers. Without being able to source or to source enough of a particular stone to give customers options, the chances of making a color diamond sale decline dramatically. No matter how high-end the color diamond call is, if the retailer cannot source the stone or be able to give the customer enough options to choose from; the retailer will not be able to make any money if they cannot make the sale.

However, due to their higher supply in the market, calls for natural yellow diamonds have a much higher chance of being sourced. Also, they give a much higher chance for the retailer to be able to source enough to give their customers some options. Consequently, the retailer has a higher chance of making a sale, and it is only when they make a sale, that they can make money. This is one reason why natural yellow diamonds provide retailers with the opportunity to make money in natural color diamonds.

Another reason why natural yellow diamonds provide retailers a special opportunity to make money is the fact that yellow diamonds of 3-10 carats are moving well in the market right now, especially Fancy to Vivid Color. The demand for yellows in these sizes is boosted by Hollywood stars, auctions, and heavy advertising by prestigious jewelry companies. Although not as rare as other color diamonds, these yellows do have a high market value and given that the supply is there, retailers are able make a lot of money if they play their cards right. Consequently, retailers should definitely take advantage of the special opportunity of selling natural yellow diamonds.

 

(Cover Photo: Finesse Diamonds)

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NCDIA Member Interviews

Retail Member

NCDIA Executive Vice President Barbara Wheat interviewed Breanne Wittrock of Gunderson’s, and member of the NCDIA Board of Directors.

 

breanne wittrock gundersons

Breanne Wittrock, Gunderson’s Jewelers, Sioux City, IA

Breanne Wittrock is well known among NCDIA members as the energetic Vice President of Gunderson’s Jewelers. She is also the Vice President of NCDIA and is the Chair of the Membership Committee. She has a proven track record within the industry and has sustained many long term relationships with her wholesale partners and Gunderson’s clients.

Breanne holds the CGA (Certified Gemologist Appraiser) through the American Gem Society and is also a Graduate Gemologist from the Gemological Institute of America.

 

How did you get started working in the industry?  After graduating from GIA I contacted Gunderson’s and they offered me a position. As a child, my parents had friends who were in the industry and I was always fascinated with their gemstone and diamond jewelry, so from a very young age I knew I wanted to do something with jewelry.

Do you have a favorite color diamond? I love them all! But I am particularly fascinated with greens!

What can a retailer do to stay engaged with clients? Social media? Personal contact? Instore events? I think it depends on what client you are targeting. For clients in the market for natural color, personal contact is best. But yes, talk about color on your social media platforms, it can’t hurt. And I always recommend an instore event. They are such a great way to show amazing and unique natural colored diamond pieces! The excitement they generate is very good.

What type of training do you provide for your sales team? How do you keep them motivated? I do hands on training color by color. We utilize the materials provided to us by NCDIA as a starting point. The easiest way to keep them motivated is to stay excited! Every day I read about natural color and I am always so excited about what I read it just pours over to all of our staff!!

Any other advice you can give to retailers? Be excited about what you do! It’s contagious!

What do you see as the future for natural color diamonds? I see the prices continuing to go up. I see more consumers entering the marketplace for natural color as now they are really gaining traction with all the media coverage of the auctions and more and more celebrities wearing color on the red carpet.

 

Wholesale Member

NCDIA Marketing Committee Co-Chair Emily Duke sat down to talk with Jose Batista of Rio Diamond Corp.

 

jose batista rio diamond

Jose Batista, Rio Diamond Corp., New York, NY

Jose Batista is an active NCDIA member who works with his father and brother at Rio Diamond Corp. based in New York City. Jose has been working in natural fancy colors since the mid-90s. He has served on several NCDIA committees and is currently a member of the Membership Committee.

 

For those of us who are unfamiliar, can you tell us about your business?  We are a family based wholesale company specializing in natural fancy color diamonds. My name is Jose and I am a second generation wholesaler.  In total, we have been in business for over 46 years.

How did you get started working in the industry?  It’s a family business, and throughout my early years of exploring I would come in to work and learn. After a few years of that, one day it just clicked. I have enjoyed it ever since.

 What diamond color intrigues you most?  The diamond color that intrigues me the most is green. It is one of the most difficult colors to cut and for GIA to determine.  If not cut properly you can lose the color for one, and secondly, it is a challenge for GIA to determine if the color is natural. Natural radiation and lab radiation can be very similar, resulting in an undetermined grade.

How has this auction season affected the industry? Your business?  I believe the auctions have helped the fancy color diamond industry by exposing fancy color sales to the masses.

Auctions have helped our business by creating more inquiries and demand. However, as an industry we need to educate, guide and be more transparent to the customer. This will help both the customer (to be satisfied with the purchase) and the wholesalers/retailers (by increasing sales).

Can you tell us about a memorable stone, or stone that you handled ?  A stone with a history?  One of the most memorable stones for me was a large oval fancy deep blue VVS layout stone. The stone was really a vivid blue. There were so many people interested in the stone that it was an amazing feeling. After selling the stone, we kept hearing about it from new people and again from others that knew we had owned the stone previously. I am very proud of my father and how he was able to polish and bring out the beauty of the stone. It’s truly an amazing feeling to see others enjoy the beauty that we created.  😉That pops created!

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NCDIA Featured in “The Jewelry Book”

NCDIA’s Executive Vice President, Barbara Wheat,  wrote an informative and fun article called “The Irresistible Allure of Natural Colored Diamonds” for a trade publication known as The Jewelry Book. The 3 page spread features 9 jewelry pieces from different wholesale members and aims to share the excitement that color can bring to a retailer while providing a broad education and history.

For the full edition of the magazine, click here: Summer 2016 (see page 32)

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