High end branded jewelry and watch items have a fatal flaw. While the concept of branding works very well in a strong economy, it falls on itself in a weak one. Nearly every branded item in the jewelry sector raised the retail prices and squeezed the outlets for profit margins over the last 5 years. Mainly due to the weakening dollar during an economic boom. Since most branded items are from Europe they continued to use the strong Euro against the dollar as an excuse to raise prices. Now that the economy has fallen to its knees the branded items are “stuck” where they are. The concept of lowering prices and loosening margins doesn’t exist in their business plan. In fact, it is more likely that some will declare bankruptcy before changing.

With sales falling and little capital to use for brand stregnthing there is little that can be done to generate sales. Which brand will be the first to think outside of their comfort zone and actually lower prices? Maybe they will just fold up shop and wait until the next boom to make a comeback rather than maintain the identy and the jobs that come with it.

Most people who are in the market to buy a diamond make the mistake of believing that CLARITY is the most important attribute of a diamonds beauty. The mistake made is to believe that a diamond which is graded higher on the clarity scale is in fact a better diamond. Polls show that most people believe the word CLARITY holds more weight than two other words used to describe a diamond, COLOR and CUT.  This mistake affects the market price of higher clarity diamonds because a market exists with a greater demand than necessary.
CLARITY by definition: (from dictionary.com)
–noun

1.    clearness or lucidity as to perception or understanding; freedom from indistinctness or ambiguity.

2.    the state or quality of being clear or transparent to the eye; pellucidity: the clarity of pure water.

How the G.I.A. determines CLARITY: (from the GIA Diamond Grading Lab Manual c.1990)

“When you assign a clarity grade, consider the size, number, position, nature, and color or relief of the various clarity characteristics. Summarize the factors; do not try to analyze them separately.”

Using the definition it seems obvious that people will deduce that a diamond which is more clear will be more beautiful. However that would be like stating that all muscular men are handsome. Some are and some are not, there are other factors more important than muscles. Gemologists are taught at the G.I.A that a diamond must be examined under a loupe, at 10x power. There are eleven clarity choices. When no inclusions or blemishes (surface) are found using the 10x power loupe the grade, FLAWLESS, is issued.  When there are some blemishes found but there are no inclusions the grade is then, INTERNALLY FLAWLESS.  Once an inclusion is found, no matter how tiny, the next lower grade is VVS-1. There are then another five grades below until an inclusion can be eye visible. The seven grades between FLAWLESS to eye visible are only determined using a 10x power loupe. So why is a flawless diamond more expensive than a diamond with a lower grade if they both appear “flawless” to the naked eye? Rarity and demand.
A FLAWLESS diamond is no more beautiful than a SI-2 diamond if all else is equal. The reason why a FLAWLESS diamond costs more is due to the extreme rarity and the demand created.
What makes a diamond beautiful is the cut and color. An excellent cut will make the diamond be more brilliant. A high color will make the diamond be more colorless. The combination of an excellent cut and a high color grade is what people should be searching for. The lower the clarity, without any eye visible inclusions, will keep cost down.
In no way can an inclusion between FLAWLESS grade and SI-2 grade affect the brilliance of the diamond to the naked eye.

The Trade Secret:

Experienced diamond dealers & jewelers know that when they want the best value for themselves they look for a diamond with the highest possible color with the best possible cut and lowest possible clarity. They know that a diamond with an eye-visible inclusion will cost them much less, and if they can find that diamond with an inclusion that can be covered by a prong, they rejoice. Once that diamond is set in jewelry and that inclusion disappears under a prong they have a “Flawless” diamond .

Based on the smaller level of consumerism and the strong stable prices of high end goods it would seem that we are in a perfect storm. Less people are interested in buying high end jewelry than ever before. Some have lost their jobs or have had their income dramatically reduced. Others are being very conservative and saving for a rainy day, while many people are just simply not in the mood to buy. Some strong earners see the size of their savings and are simply depressed.

At the same time, Rolex & Cartier, loose diamonds and name brand jewelry have not come down in price. After three years of steady increases in cost these items are now priced out of our new realty.  At each increase over the years, we swallowed the reasoning (a weak dollar & strong markets abroad), but now we need all of them to reduce prices to start generating new sales. How long will we have to wait until our economy gets back to a level that can sustain these items?

Hopefully the cost of high end goods will slowly decrease at the same time our economy slowly heals so they can meet in the middle and we all can start selling and buying again.

We all know this. It’s inevitable because we are the USA and we always survive. In fact we always come out ahead. It’s been our history and we have to assume it will repeat itself. Changes will be made to right the wrongs suffered at the hands of Enron and Madoff. New laws will come to create new jobs and grow wealth. The American horizon is always cloudless.

To that end, we all must adjust to the times but never forget where we are headed. Never let the problems of today affect our outlook of tomorrow. We are soldiers at the front lines of an economic battle and soldiers cannot think of anything else other than winning.

Stay true!

I have played ball on both fields. Service is the home field and Salesmanship is away. On the away field you must create razzmataz to keep the fans happy, while at home you only need to show up, do your job the right way and you will always win the game.

I worked in retail for 8 years splitting my time between retail jewelry stores in Aruba and Miami. In both places shoppers came into my stores and “looked”. It was my trust to create, inspire or at least not loose a sale. If that was all I was to do I would have been somewhat content but the real job wasn’t just to procure the sale but to create the upgrade. Anyone can be trained to take an order but a great salesman can inspire the customer to “move-up” and purchase the more expensive item.  To do that, you need moves, to juke, stutter step, spin and weave a person who say wanted to spend $5,000 into spending $7,000. The life of a great salesman is to be part shaman, part wedding planner and part anthropologist.  Needless to say, I was never a great salesman. When I bump into one (these are harder to find than you might think) I’m always intrigued with their abilities. To me, watching a great salesman work is like watching Michael Jordan dunk or Fernando Botero paint, activities I can appreciate but not actually attempt.

Service is realtiy to me. The reality I wish existed in all aspects of life.  Someone who is great at service is first and foremost a professional. Out of the time and sacrifice it takes to become a professional one usually develops a humility.  A humble professional is only half  way there. The other half is the desire to please. Regardless if that desire is economically driven or self inspired without it you have someone who could help you but doesn’t need to. With it, you’ve got the best of what we all need, satisfaction. Not just the short term satisfaction a great salesperson can manipulate for you but the long term satisfaction you enjoy as long as you live.

When I shop for major purchases I do homework. I read as much as I can about the item. I research it on the internet. I ask friends and family for advice. I shop. We all do. It’s smart business. When I am ready to pull the trigger I look for service. It is service that gets my hard earned money. Someone who is a professional in the field with the desire to help me, who listens, adds knowledge based in fact, allows me to decide what is best for myself given the truths provided and then gives me exactly what was asked for. Maybe I just have too much confidence in myself or maybe others are lacking it and a great salesman artificially provides it. Either way I know what I want and I am happy that I am in the position to be available to anyone who wants it to.

In June 2007 I was invited to a gem show where the mines and dealers are located in Brazil. The city is called Governador Valadares. It is located in the Brazilian state of Minas, which is world known to be the home of amethyst, citrine, aqua marine, topaz and tourmaline.  In order to get there I had to fly from Philadelphia to Miami, Miami to Rio, Rio to Belo Horizonte and a bus to a different airport in Belo to Valadares, with a 15 minute stop in a small village first. The entire trip took 24 hours, door to door.

Valadares is a bustling small city with a downtown area full of hotels and tall office buildings.  The city has a beautiful convention center that sits on a river directly across from a mountain. This mountain is world famous in the hang gliding community. Para-sailors and Hang gliders were practicing every day.

The first morning I was picked up at my hotel by a courtesy van and sat next to a Japanese Jewelry reporter. We shared hellos and the conversation quickly turned to me telling him about the only person I ever knew from Japan, a classmate of mine at the GIA back in 1992. Of course this reporter not only knew my classmate but they were very best friends. We actually called my classmate in Tokyo from that bus on our way to the show. How small the world is!

The show was relatively small with only about 200 vendors. As I walked around I saw many faces I knew from our large shows in New York and Las Vegas.  After a couple of hours of walking and looking I decided to sit down with someone and get down to business. What I found was that the prices were higher than I expected. It turns out that when you go to Brazil and the vendors come to the show from their homes, they  ask high prices. But when the Brazilians come to the States, at a high expenses, and expect to sell enough to make back expenses, the prices are lower.  Who knew? I did buy a few things for special clients that were unavailable anywhere else because they are so rare that they never make it to the States, with so many international buyers walking around I just had to pick up the best of the best.

The best part of the show was meeting the Brazilian dealers and all the people involved in that business. Brazilians have a love for life and show it with their sharing of song, dance, food and fun. Almost everyone I met wanted to sit and talk, drink or eat with me. They shared stories of how business used to be back in the 60’s and how it has changed over the years.

My last day in Valadares I went with a group of international buyers to an actual working mine. We drove about 2 hours on dirt roads over the most beautiful terrain. The area is very green and hilly. We came to a small mountain and all of a sudden the trees were gone and red earth with veins of white mica were all I saw. I knew we were there. This is the kind of geology that produces the colorful crystals we all love. Once we arrived I was in heaven. All around us were openings into the mountain, machinery to dig, piles of stone that has been removed and breath taking views of the empty country side.  The group got a tour of the area but I stayed back to take pictures and breathe in everything I could. I found some rock crystal quartz and jammed my pockets full. We also found black tourmaline and mica that cut your skin easily with its sharp edges.  After a couple of hours we were asked to leave and I felt like I did when I was 5 and had to go home from a birthday party. The experience will stay with me forever. One of the members of our group was filming a documentary for Brazilian National News. I was interviewed and shared my joy with everyone.

The trip back home was just as long but this time I stayed two nights in Rio. One of the most dangerous cities in the world. Rio was quite scary and not a place I want to go back to.  Maybe when it is summer in Brazil things are better but the winter in Brazil is chilly and rainy.  Next time I go I will just camp out at the mines!

This picture is of the convention center.

The vendors and buyers.

Josh on top of a tourmaline mine in the middle of Brazil. Since it was winter the temperature was around 70 degrees.

So your looking for a diamond? Well, I guess you went shopping at the mall and heard a bunch of information about the 4 c’s. And I am sure you spent some time on the net researching what makes a diamond beautiful. Let’s not forget the advice you mom or uncle Charlie gave to you too. Add it all up and your one confused young person trying to make the “perfect” purchase, whatever that means.

I see you all the time. You sit down in front of me and I can see it in your eyes. Probably similar to what a traffic cop sees in the eyes of a drunk driver. Your eyes tell me you’re trying to make the perfect purchase but your not sure that you know how. All of that information was great, but it piles up and in the end you realize, I hope this guy is doing right by me.

The most common “mistake” or confusion I see involves the clarity of a diamond. ” I want my diamond to be perfectly clear” is a reasonable prerequisite anyone can have. But what does it mean? Clear. The term, clarity, is a weighty term. It is so heavy that many people expect to buy a flawless diamond thinking that it will be more beautiful than others not so flawless. In Asian cultures the word flawless is so strong that anything less is worthless. Most of the biggest diamonds in the world with a flawless clarity grade are sold to the Asian market.

So what is clarity exactly? It’s the amount of trace elements inside a polished diamond. None, and you have Internally Flawless. One or more, and you don’t.  Now that you don’t have a flawless diamond what do you have? Well about 60 years ago the GIA made a list of grades under flawless that read like it was developed by an high school drop out. What is the next grade under flawless? VVS-1, and believe it or not the term VVS-1 stands for, very very slightly included. Wow, what a scientific and intellectual term, huh? Wait, it gets even better. The next level below VVS is VS, which stands for……you guess it, dropped one V and you have very slightly included. Anyway, if the silly names of the clarity levels don’t do it for you how about this; Every clarity level from flawless to SI-2 (slightly included) have the same thing in common. The inclusions are unseen by the naked eye. Now that doesn’t mean you can’t see them at all, it just means that with normal eyes, under normal conditions, from about arms length away, the inclusion will be invisible to the eye. If you can see the inclusions with your eyes, under normal conditions, then the diamond is classified as I, or, Imperfect.

Is your diamond more beautiful than the next because of the clarity? No. The higher the clarity grade, the more rare the diamond, NOT the more beautiful. Since all of the grades are the same to the naked eye, by going up the scale your increasing the rarity, which then increases the cost.

Color and Cut are the factors that increase beauty as you rise in the grading. And I plan a blog about them in the near future. Until then, just remember that it may be nice to own a rare diamond that has a high clarity but now you know why it will cost more. And maybe you will see a lower clarity diamond in a different light.

One of the choices in our poll is Paraiba Tourmaline. Many people still don’t know about this magical and rare gem that was discovered in 1988 in a remote part of Brazil. It’s one of my favorites and I was lucky enough to see their introduction when dealers first brought them to the Tuscon Gem Fair in 1991. In 1997 I was lucky enough to sell a gorgeous specimen that weighed over 4 carats.

The name Paraiba comes from the original location of a special kind of tourmaline that was found in Brazil in the late 1980’s. Tourmaline from the area known as Paraiba looks like brilliant frozen Windex. Originally the prices were around $200 per carat in 1991 when most tourmaline was selling for around $35 per carat. Prices soon sky-rocketed as it became a collectors item. Today a fine 6 to 10 carat Paraiba tourmaline from this original source can bring in the neighborhood of $150,000 to $500,000. Thats an increase of of 250 times the original asking price! Putting it on par with the finest Colombian emeralds, Burmese rubies and Kashmir sapphires.

Increasingly rare to find, the mine in Brazil is said to be all but extinct. In fact, on my last trip to Govenador Valadares, Brazil in July of 2007, to see what was available at the source I could only find the tiniest stones. Anything over a single carat in weight came from a new source somewhere else.

In 2005 a new source of tourmaline was found in Mozambique, Africa.  Stones from this new area look very much like the original Paraiba stones. Both have similar chemical characteristics which includes copper. It’s the copper that gives the stuff its spark. Most of the new stuff is a little weaker than the original rocks but a rare few are equally as stunning. So as anyone would expect the new stuff raised eyebrows in the gem world. Dealers salivated at the prospect of making profits on this new product. Collectors opened their checkbooks to add these awesome looking stones to their inventory. And of course, they were described as “Paraiba looking tourmaline”. I would describe them the same way. I would disclose the exact true location of the gem. I would never sell the new stuff as Paraiba tourmaline. I mean, hey, it’s not from Paraiba. It’s from Africa.

Well, unfortunately the GIA and AGTA, both highly recognized laboratories, have decided to certify the new stuff as Paraiba Tourmaline. So, instead of saying that these rocks have similar coloring as Paraiba tourmaline they have chosen to take the leap and call the color, Paraiba color. Can they do this? Is this ethical, a choice made with integrity? It certainly helps dealers make more money due to higher asking prices. And it certainly hurts anyone who deals in the stones from Paraiba, Brazil, which now can’t command a premium price based on country of origin.

In my opinion the labs should stay away from the name game. A certificate should disclose the truths that science discovers such as weight, dimensions, species and country of origin. Past that they should let the trade and consumers decide on the names of colors.

It would be the same as if the AGTA or GIA called a ruby that was from Thailand, but with the color of what we typically see of Burmese rubies, a BURMA RUBY. The same could be said of Colombian emeralds, Golconda diamonds and Kashmir sapphires.

A gem dealer from California who specializes in Brazilian Paraiba tourmaline has decided to sue the labs. His claim is that the GIA and AGTA have hurt the Brazilian Paraiba stone industry. I am interested to see how this will play out in the court system but regardless of who wins, I feel that the name Paraiba should only be given to a gem that comes from Brazil.

Brazil                                  Mozambique

Greetings friends.

Thank you for taking the time to visit our website and read our blog. In the near future Shawn and I (Joshua) hope to add many interesting blogs. We are very excited to start sharing. From our education of gemstones to our travels buying around the world there is so much we want to share with you and we believe this is the best forum.

So please come back often and check us out. Hopefully you’ll be entertained and informed in a very cool and unique way.