As a new subscriber I have been reading, with great interest, the
threads on the business aspects of the Jewelry trade. Things like
consignments versus outright sales, dealing with dealers, and
getting the jeweler’s perspective on gem buying etc. are all well
worth reading about. As a long time collector and now faceter, I
have incorporated as a Gem Dealer and am trying to make the
transition into the trade.I have been lurking for a while getting
the feel of things and learning from the pros of the trade. I am
obtaining books mentioned for additional reading material and would
also appreciate any further / book recommendations. Also
any more opinions on the merits of consignments v. sales and how the
jeweler feels about it. My first experience with selling a stone (a
1.15 ct. Russian Demantoid) on 10 day memo was kind of scary. At
first I was told to hold onto the check for a few days, then child
support upset his account. It all worked out fine and I got the
check cashed but I hope the gem trade isn’t always this interesting.
What does a jeweler want from his/her gem supplier (besides the
right stone at the right price). How does the jeweler feel about
consignments v sales v 10 day memo? I hope this isn’t too rambling
and I hope to continue to glean useful about the gem
trade. Any help and will be greatly appreciated. David
Zaayer david@gemcrystals.com
Consignment Vs. Memo
In a diamond bourse, if you need an 8 ct., $75,000 stone, you go to
someone you possibly have never met, negotiate the deal, shake hands
and walk away with the stone. The understanding is that you will
either return the stone or present the dealer with the cash equivalent
(diamonds=cash), not just in 10 days, but as soon as your deal is
consummated. It is merely a way of having the end-buyer pay for the
stone, and to keep the deal streamlined - one payment instead of 2 or
more. Also the understanding is that the portion of the money that
is the $75,000 is not your money to begin with - it goes to the
dealer ASAP, because it is his. The Memo (memorandum) process is
just a formalization of that process. “I agree to either return the
product or deliver the cash value to you.” Consignment (pardon my
cynicism) is a way for a store to get you, the manufacturer, to
finance his business and stock his cases. You are, in effect, making
a loan to the store in question, often open ended. Plus, if you read
the agreements, there are often (usually) clauses that absolve the
store of responsibilities, and insurance, and more. I would guess
that probably every single Orchidian who has done consignment
business has at least one horror story.