I am a lapidary and sell through my web site as well as at local
shows. I have been thinking of another avenue for sales through my
web site. This would be selling stones on an approval basis. (Stamp
companies still use this method to sell stamps.)
I would like to know what have others done like this? Has it worked
for others? Has anyone on this list purchased stones in this manner.
One value I see in selling this way is that the customer gets to see
the stone rather than a photograph on a web page. Handling and
seeing the stones might create desire so more stones are purchased.
Because each customer has their own use for stones, I would need to
build a form on my web site where the customer could request certain
kinds of stones that would possible work for them. ( Just as stamp
collectors might only request certain kinks of US stamps or certain
foreign country stamps.)
I know there would be a lot of details that would have to be worked
out in order to get something like this up and running but it might
be less work than taking pictures of each stone and entering new
on the web page for each new stone.
Anyway, I would like some thoughts or insights on this marketing
strategy.
This has been done since pretty much the beginning of time between
gem dealers and jewelers. It’s known as getting gemstones on “memo”.
A gemstone dealer will send a parcel of stones on memo and he and the
jeweler agree on the time period of the memo. When the time is up
the jeweler either returns the stones or pays for them. This is one
of the most sacred agreements in the jewelry business and violating
it can put either party out of business because of the violation of
trust.
In your case you are sending stones to pretty much hobby jewelers
and part timers. I wouldn’t send anything until I got a valid credit
card number and agree with the customer that if the stones aren’t
returned by such date that you will be charging their credit card for
the amount. But then the customer can challenge the charge with
their credit card company and have the charge reversed. So there is
a risk in it either way.
Yes, I have gone down this path. I sent several stones to a guy in
Florida ( did not have a credit card details or any hold ) I sent on
trust and when the time was up I told him to send the stones to two
friends of mine in US ( BTW I am out of US ) the stones never turned
up, only two empty but sealed envelopes. He says he put the stones
in but the packages were NOT tampered.
There is a another instance I sent stones to be displayed at the
Tuscon Show In feb this year, yet to get a reply to my many e-mails.
The moral of the story is get a leagal contract of some sort and
have a some kind of hold on the payment ( at least a valid credit
card number. ) or a deposit / Bank guarantee
We do nothing on “memo” Theer are too many thieves out there and
billingto credit cards means nothign as those charges can be
reversed. We had $7.500 of memeo goods sent to a designer on Ebay
She even sent emails that she had sold some of the goods, etc When
she violated the timelimits we asked fro the goods back She refused
to communiacte by phone and letter and even changed her phone number.
Her supposed refences were good. but anyone can have good references
We had stacks of emails, also signed receipts receiving the goods,
The psotal service refused to investighate as they only conduct
fraud cases for $100,000 worth or more . We went to the local police
and they interviwed her so they claimed and she told them she had
sent it back but provided not one clue she had done so or prrof to
the investigator who we then filed negligence charges with the police
department.
In fact we have proof and pictures of her selling all the goods on
ebay and even 1 year later. Both ebay and the police nor anyone
woudl do a damn thing.
We showed ebay proof and mailing proof of our goods she signed for
and ebay did nothing She sold the goods at dirt prices on ebay
Now we went to a lawyer The lawyer wanted 1/3rd plus he says he
coudln to recover his legal fees nor court fees and who knows even
if we won woudl we be abel to recover the judgement against her.
Moral: Memeo mean abaolutely nothing in this day or age I have seen
so many memos dishonerd in New York NY and other places they mean
nothing nor does a signature on them in wirting mean nothing. People
go out of busines and move and steal your goods,. I woudl never give
now anyone any goods on memo.
I second what Lee Horowitz is suggesting. Memo is EXTREMELY HIGH
risk today. Since the financial crisis, big names are folding, JBT
ratings are questionable, references can be fixed, robberies
increased, and the whole situation is ugly.
If you can’t afford to lose your merchandise stick to cash memo’s,
exchange of goods, or best of all cash & carry. Credit cards are no
good, and hold goods until bank checks clear.
From end of 2007 through 2008 I lost six figure numbers to
bankruptcies and jewelers or dealers who decided to stiff me. Legal
contracts look good but hold little weight. You can spend your whole
life chasing people or putting leins against what they don’t own.
Beside this, all the money will go to the attorneys and cost you a
bundle extra traveling to cities of jurisdiction.
You will lose a lot of business changing methods, but more important
you will not lose merchandise.
Know of a guy who has stolen thousands, maybe 10’s of thousands of
dollars of jewels by the memo method. Never returns the work; and if
sued, he sues back. Keeping up the fight is often too much for the
stone merchant. “Reputable” guy, too. But folks won’t talk about for
fear they will be sued too.
challenge the charge with their credit card company and have the
charge reversed
There are two fundamental things that need to be taken care of. Memo
“Memorandum” is an entirely different animal. Either get a memo or
buy a memo book and READ what it says. It will say, in essence, “I
am responsible for these goods and I will either return them or pay
for them in the specified time.” That is a legal and binding
contract, and yes people may or may not abide by the terms and then
you can have problems. I know someone who had issues just lately,
and had to explain to the signer that yes, he was responsible for
everything.
If you’re going to give your goods to anybody who just happens by,
then you will get what you deserve. The only way the system works is
through trust and integrity, and those things are earned by time and
reputation and referral. True memo doesn’t even involve a transfer of
capital at all - if you are charging a credit card then you are
making a sale, which may need to be canceled with all that goes with
that… A memo transaction is, “Take these goods and pay me if
you sell them or decide to keep them —or if you lose them by any
means. Otherwise return them in their original condition…”