INTERNET RETAILING? Marc Altman’s not interested. Specialization? Don’t bother recommending it. Big marketing budgets? Ditto.
Instead, his notion of the ideal business model for an independent jeweler in 2009 sounds a lot like the 1970s version, a neighborhood store that does it all: Imports, designs, manufactures and assembles its own jewelry, takes in a lot of custom-order work and appraisals, does a bit in the way of watches and gold, and gets by, very nicely, thank you, on a large bridal section and skilled diamond buying.
In short, that’s B &E Jewelers and Gemologists today. And it’s making a strong argument for doing business the old way.
His 4,000-square-foot store in Southampton, PA, on the outskirts of Philadelphia, posted $2 million in sales last year, up more than 70 percent since it reinvented itself as a diamond store in 2003. “The Internet doesn’t work unless you’ve got huge amounts of capital. Look at Amazon. They’ve invested billions to make millions,” Altman says.
The second-generation jeweler’s opinions come from experience. He tried selling jewelry on the Internet but discovered that his inventory was “too wide and cumbersome” to fit the online model. “You spend all your time answering questions and then if you don’t back get to people in 10 minutes they get angry,” he says.
Ironically, the thing that made his foray online so difficult, his deep inventory, is now one of the store’s biggest strengths. His staff can show engagement-ring customers more than 400 different engagement mounts, over 200 diamond wedding-band styles, and a wide array of diamonds that he sources straight from sightholders.
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The second part of the B&E model, and one of its few concessions to New Age business, is outsourcing. The store sends labor-intensive shop work to a factory in southern China, where workers will set small multi-diamond and micro-pavé orders for 70 cents a stone, compared to the $5 apiece it typically costs in the U.S.
The cost savings are enormous, especially for rings that may have 200 or more half pointers to set, but the process is time consuming and requires extensive planning to cover the long lead time. In October, when many other jewelers are finalizing their Christmas orders, Altman is working out his Valentine’s Day lineup.
The savings mean B&E can offer rings with more weight and better diamonds at a lower price than most online retailers or downtown rivals. It also gives him the room to offer an 85 percent cash return policy, albeit with a very narrow margin. “With the engagement-ring sale you get a customer for life. He comes back and buys the wedding bands, and then he tells his friends. They then come in and buy a ring and wedding bands and so it goes. You get five times the original sale.”
