Startup gem dealer

Jewelry Discussion
1

Hello… I have a very good friend in Thailand who has relationships
with ten or more dealers and can get very good deals on quality
rubies, sapphires and emeralds, as such we have decided to become
partners and I was hoping to get some advice.

He is a new gemologist with the connections and I will be selling
the stones here in Chicago. Because we are just starting out, the
initial purchase will be small, four or five top quality stones. I
was planning to take them around to stores, introduce myself and
show the stones. Will I be taken seriously? I understand that
because I only have a few stones I will look like an amateur,
rightly so, but we both believe that once we develop relationships
with jewelers we will be able to find just about anything they need
at a good price. Is it naive to approach the business this way?
We don’t want to purchase a lot of gems until we are certain that we
can sell them and I wont be able to sell them unless I cultivate
relationships with jewelers.

What is the best way to cultivate these relationships? Should I
call or just stop by? How should I present the stones so that I
don’t look like too much of a novice?

Any and all advice would be greatly appreciated. Marnie Schipper

2 
What is the best way to cultivate these relationships? Any and all
advice would be greatly appreciated.

Hi, Marnie, I am also on the Chicago area. I wouldn’t call myself
well-connected, but I’m not isolated, either. Why don’t you email me
off-Orchid at @Noel_Yovovich and tell me more about the types
and prices of stones you have. I might be able to offer some
or help. Noel

3

Marnie,

Tough business. Can you trust your partners? This is a serious
question. Not only honesty but industry savvy, capital and contacts.
I have been buying in Bangkok for twenty years and I can tell you it
is no place for a novice. There is no consumer protection agency in
Thailand.

Do you know what you are talking about? Many jewelers are
incredibly ignorant on the subject of gemstones other than diamonds
and rely on the dealer to educate them. You can’t sell what you
don’t have. So, you must have a good inventory and you better know
what you are talking about.

You might consider my book, Secrets Of The Gem Trade; The
Connoisseur’s Guide To Precious Gemstones currently being excerpted
in Colored Stone and Lapidary Journal.
http://www.secretsofthegemtrade.com Won’t tell you how to setup a
business but will tell you about quality in

I wish I had a nickle for every would be gem dealer who has “good
friends in India” or “great contacts with this dealer in Thailand”
who I have counciled NOT to go into business who have ended up with a
big pile of mediocre gems. Its a great trade but you have to pay for
your education.

Richard

4

Marnie, I am a gemstone cutter and dealer. I get approached about 50
times a year from dealers in Thailand, China, Brazil, and Africa all
wanting to extend me great deals if I would only market their stones
in the USA. My answer is to all them is the same. The USA is flooded
to over saturation with Everyone I know who buys gemstones
is approached many times a year by sellers. It does not matter what
quality you need the stones are readily available. Jewelry makers can
buy the stones right off the street in quantity and quality from
numerous sources. After any major trade show the dealers spread out
stopping at every store they can find in the area. I was just a
dealer at the Las Vegas show. It was the worst show I have done in
10 years. That did not stop the nondealer sellers at all. I was
approached by 10 or more non dealer sellers at the show. 5 were
Brazilian, 3 African, and 2 from China. These same people are right
now traveling the USA selling their stones. They all have Jewelers
Board of Trade listings through which they can find every jeweler in
the USA. We are flooded with

In talking with these stone sellers I have found that the opening of
the Chinese labor market is having a much larger downward pressure on
value of products than I realized. For instance peridot is mined in
China. It is a domestic product for which in China it has little
value. Therefore the Chinese buy it for next to nothing, cut it for
next to nothing. When they sell it on the world market at any price
they make a large profit. This has devastated the market for US and
Pakistani peridot. If China finds more domestic gemstones it with
continue to drive down the prices (devaluation). That is what you are
faced with. I did not write about the many laws you must also be
knowledgeable about. Disclosure and business laws are the two that
you must learn about.

At Las Vegas I lost over $1500 in expenses at the show. Every
dealer I know that had a money making show made it on only one or two
good sales to long established customers. Right now I am going
through the process of reevaluating the Las Vegas shows. Jump in.

Gerry Galarneau

5

The idea sound good but it may not work. When I started building by
gem business I tried the same-thing and so found out when the people
saw me with a few gems that did not take me serious. They would not
even buy them for cost. I learned that the jewelers see people all
the time bring stuff to sell they take none seriously. Then I tried
gem shows and learned that people will start buying from you after
they see you a couple of years. All of this sound bad but with time
you can have a great business. The only times I have seen a business
take hold the way you are talking about is when the business was
will to run at a loss for a time to get their name out there in the
market. The gem business is really build on TRUST in the person
selling the gems and without that trust it is hard to sell. I am
willing to help you also as a possible customer and then you can
start to build a referral list. Email me direct if you want. I hope
this helps you in someway. William

6

Another good point for the aspiring gem dealer. The ability to buy
rough is a great advantage. Were I twenty-five again my first step
would be to learn cutting. Not necessarily to be a professional
lapidary because, as Gerry points out, you can get it cut cheaper
overseas, rather to learn the ins and outs of rough buying. Here is
where the profit is if you are good.

For me the discovery that I could travel to warm places in the
winter, deduct the trip and make a profit was a true revelation.
Yes, its risky at times but a hell of a lot of fun. I think it is
very important for the aspiring gem dealer to do some traveling and
really get as sense of the business.

Richard

7

Marnie, Before you invest time and money in your new venture I’d
strongly recommend you try to get a copy of the book by Stanley
David Epstein , “The Gem Merchant”. As others have indicated it’s a
field in which you really have to pay your dues. Epstein’s book
gives the reader an idea of what those dues amount to. It was
printed in 1994 so may be out of print but my copy says to contact
Gem Business Publications, International gems. Box 3145
Murfreesboro, TN 37113…FAX is 615 893 8123, Phone 615 890 6797.
Good luck! Jerry in Kodiak

8

All, I was asked by a fellow Orchid Member to explain how I identify
gemstones when I am out buying. This person just got back from a
major gem show where the goods offered were so confusing they did not
purchase many stones. The persons concern was that they could not
tell if the dealer was telling the truth about the stones.

Here is my answer. I back this up with 25 years as a gem cutter and
marketer. The game is and has always been for someone to find a
rough material that is not marketable as dug from the ground,
discover a way to enhance it and market it before anyone discovers
you have enhance it. Then after the deception has been discovered
shrink from public sight until the next opportunity arrives to
deceive the public. That is the game. GIA has recently posted to
its website that what they identify today as natural may tomorrow be
found out to be enhanced by man.

What the public wants is the truth about what they purchase. Their
perception is that when someone markets a gemstone as natural -
natural means the only enhancement applied to the stone is the
cutting and nothing else. The deception is that stones are now sold
as natural - if you cannot tell that it is enhanced it must be
natural. Dealers are going through their stocks of larger stones and
if they can’t find evidence of enhancement are calling the stones
natural. No one can afford the time, nor is it cost effective to
worry about smaller stones. Long time gem dealers like myself will
tell you that only in the last 10-15 years has the availability of
brightly colored gemstones been so abundant. I can not prove that
these stones are enhanced, but in the light of the best gem lab in
the world saying that even they may change their mind tomorrow I
would not buy any of these stones believing they were natural. I do
not believe buying from the source or a trusted dealer is the answer.
Gem trails, enhancements, and production routes have become so
convoluted that anywhere along the route deception can enter the
picture.

My question for you is why do you need to know if the stone is
natural? Does being natural place an extra value on the stone? Or
does being natural and proven natural put an extra value on the
person selling the stone? To me it does, but I admit that I can no
longer be 100% assured that any stone I purchase to recut has not
been enhanced. My opinion is also that neither can any other gemstone
dealer. Other dealers are exploiting the weak spots in the evaluation
process for their own personal gain. In rough I feel slightly more
secure, but be advised I have heard that in San Palo (Sp) Brazil
they are experimenting with radioactive treatment of a lot of
gemstones in the rough… I do not know what is going on in Africa or
Thailand as they are very tight lipped about any enhancements. I also
know that gemstone treaters are traveling the world buying stocks of
rough for treatment.

My advice to you is to learn as much as possible about the stones.
Never pay a premium for natural stones unless they are valuable. If
you are going to buy a valuable stone insist on two independent
laboratory reports from “in business” for a profit gem labs. The
reason for this is that you are paying so much money based upon the
acurracy of the report, if the report is proven wrong you may have
legal recourse in the future with a business laboratory.

How about synthetics on the market sold as rough. A what if? What
if someone discovered a process to eliminate the lines we are all
trained to view in synthetic corundum? Has it already been done? One
drawback of educating everyone on gemstone evaluation is that the
less than honest learn from the process of gemstone evaluation where
the weak areas are and exploit them for their own monetary gain.

Gerry Galarneau

9

I believe that if the stone is indeed truly natural then it is more
valuable because it would be more rare and what is made by nature is
less consistent that something that is enhanced and would therefore
be more valueable. My question is, does radioactive enhancement
cause ill affects on the handler, cutter, jewelry designer, wearer
of the stone? Thanks for your input…Ann Madland

10

Hello Marnie, Before you purchase any gemstones for resale, you MUST
do your homework. First set up appointments with several jewelers in
your area to see them in person. If you get an appointment, explain
what your intentions are and ASK the jeweler what his or her needs
are and what is the price range of goods they are willing to look
over. This will eliminate wasted time and disappointments for both of
you in the future. Next go to a few gem and mineral shows, talk to
other dealers, visit as many websites as you can stand, look at the
goods presented by sellers on EBAY and the television shopping
channels . Learn as much as you can about the stones you will be
selling. Once you have a feel for the market, THEN purchase or
receive on consignment the gems your potential, already researched
customers, would consider buying. It is a good thing to start with a
small amount of inventory in your case. Remember, marketing first,
arrange security, then purchase stones. Will Estavillo

11

Hi Marnie, I have read what the responses have been so far to your
querry. I really liked what Richard had to say both times, but most
especially about buying rough and getting it cut as opposed to buying
already cut gems, it is my belief that there really is a better
chanceof making money that way, that’s what I do. I started in rare
gems part time about 3 years ago, my main market is rare gemstone
collectors even though many species I sell could be used in jewelry
and would make agreat selling point. I currently sell strictly online
(via my home-made website and yucky ol’ eBay) because of a lack of
time and money to travel and do shows, but I would like that to
change.It is still a part time biz for me though I would like it to
be fulltime.That is currently my biggest struggle, how to take it to
the next notch with limited capital, school aged children, and a full
time working husband.My sales seem to be seasonal, Sept. through
March, lastsales season I did about $2000sale per month, twice what
is was the season before, so it is growing, but as everone warned, it
grows slowly. My profit averages about 50% of sales, and I have
builtagood sized inventory, for the weird stuff I deal in that is.
Volume does indeed make you look morelegit,but probably moreso does
knowing what you are talking about and knowing what you are doing. My
advice is if you want to jump in, do it right, take classes, get
certified, and own your own gem testing equipment. A coupleclassic
example as to why…I have bought what I thought was amblygonite
only to find it was montebrasite, a fellow dealer once sent outa
colorless rare material (forgot what it was now)for cuttingonly to
get quartz back fromhis cutter instead,another gem dealerI know in
the UK bought several parcels of gems from Thaigems and two lots sold
as vesuvianite

Good luck,
Alex.

12

Gerry, I am happy to say that this time I quite agree with everything
that you have said…I have been saying basically the same thing
for many years.! There is no way that one can be completely assured
that ANY gemstone has not been enhanced EXCEPT those stones that you
have personally mined.

Case in point…I tried to run down some carat sized white
sapphires in Tucson last year and discovered that they were
virtually unobtainable. There were plenty of small stones. Why ?
Because the diffusers were gobbling them up for treatment ! It would
be safe to say that ANYWHERE where there is established commerce in
rough and/or cutting there will be enhancers. Six years ago in
Nairobi there were a number of people who were “cooking” sapphire
and others were manufacturing phony emeralds by filling beryl
crystals with green glass.

My take is that ultimately natural gemstones will overwehelmed by
phonies and that the market will implode. The public will be
brainwashed into accepting such phonies as Moissanite and,
ultimately, the jewelry business will be awash with so much crap
that the public will wind up settling for costume grade goods. I
also think that this will automatically create market opportunities
selling to people who appreciate the lesser stones such as jaspers,
agates and others AND that there will be a much greater appreciation
for the custom made output of artists and artisans.

Obviously no one can foretell the future with any certainty, but
anyone who says that change will not occur has his head in the sand
( or elsewhere…Sic! ) Ron at Mills Gem, Los Osos Ca.

13

Dear Gerry, I have also been in the gem business for over 23 years. I
do not share your views when it comes to treatment. There are many
many gems out there that are not treated at all.

For example in the last two weeks I have preformed numerous of the
following 100 % natural untreated stones :

a.. Blue green Afghan tourmaline
b.. Green beryl from Eli da Souza's mine in Brazil
c.. Pakistani peridot
d.. Mozambique light pink tourmaline
e.. Clear quartz from Madagascar with red rutile needles
f.. Sugilite gel from Africa
g.. Madagascar aquamarine
h.. Smokey quartz from Brazil and Colorado
 i.. Clear quartz with red lepidocrosite and hematite inclusions from 
	Madagascar
j.. Russian rock crystal
k.. Nigerian sherry pink tourmaline
l.. Nigerian pumpkin orange spessartite garnet
m.. Blue chalcedony from South Africa
n.. Bolivian amethyst
o.. Pink Peruvian opal
p.. Sleeping Beauty turquoise from Arizona
q.. Colombian emerald
r.. Rhodolite from Kenya
s.. Tanzanian Iolite

This is just the material that I have preformed in the last 2 weeks
that I guaranty is absolutely 100% natural and not treated in
anyway. This list will get even larger in the next few days as I
continue on my preforming binge. So I strongly disagree that all
stones out there should be viewed as treated.

Respectfully, Steve Green / Rough and Ready Gems
www.briolettes.com Your source for natural (and some treated)
gemstone briolettes and precision ultrasonic drilling.

PS - I am off to Mexico for 2 weeks so if I do not answer…

14 
I admit that I can no longer be 100% assured that any stone  I
purchase to recut has not been enhanced. My opinion is also that
neither can any other gemstone dealer. Other dealers are exploiting
the weak spots in the evaluation process for their own personal
gain. In rough I feel slightly more secure, but be advised I have
heard that in San Palo (Sp) Brazil they are experimenting with
radioactive treatment of a lot of gemstones in the rough.. I do not
know what is going on in Africa or Thailand as they are very tight
lipped about any enhancements. I also know that gemstone treaters
are traveling the world buying stocks of rough for treatment."

Hi Gerry (and gang), While you and I have often had widely differing
opinions on various topics, I couldn’t agree with you more, on this
one. About four years back, I had a (shall we say) “extremely lively
and diametrically opposed discussion” with the late Mark Liccini,
who staunchly believed it was (quote) “every lapidary’s duty to do
whatever it takes to coax the best possible appearance out of
whatever comes out of the ground, whether that means heating dyeing,
filling, irradiating, as well as faceting, cabbing, carving or
reconstituting”. I disagreed vehemently with him, and still try my
best to be as altruistic as possible. But, at the same time, I have
to admit, in my heart of hearts, that I know that only Garnets
remain (to the best of my knowledge) the one fundamentally unchanged
gem species. All other gem materials currently available, to the
best of my knowledge, are either commonly treated or very frequently
so.

The source of the problem lies in the combined blessings and curses
that the various mass merchandisers on TV created back in the
early-to-mid ‘80’s, by generating mass markets for materials which
are now, and have always been, rarities. Think back to your earliest
studies of gem materials… back to the “old” definition of the
criteria which determined a particular mineral or rock’s status as a
“Gemstone”, prior to this onslaught of enhancements: beauty,
durability and rarity. When I began collecting minerals, in 1965,
and cutting, back in ‘72, the number of gems which were routinely
treated were relatively few, and the comparatively primitive nature
of the majority of those treatments made them readily identifiable
by those with even the most fundamental understandings of what the
respective gems’ features were, or should have been. When the
initial one of these videomarketers hit the market, it worked its
magic by dangling scintillating baubles before the eyes of lower to
middle-class Americans (and other nations’ viewers as well, I
suppose) and gently reassuring them that they, too, could live like
the “Rich and Famous” for just a few dollars per credit card
installment.

The only problem with this approach is that, as Amsterdam Sauer’s
founder once pointed out, “Gems are a one-time harvest”; once you’ve
built your market, you’re well on the way to losing it, unless you
can “miraculously” come up with new sources of supply. In the
colored stone world, this has meant a choice between either newer,
more technically advanced ways of treating the poorer qualities of
undercolored or included rock that used to be discarded, or coming
up with ways of either imitating or replicating it in the
laboratory. And as for those Topazes? Just within the last three
weeks, I’ve seen several samples of absolutely exquisite Imperial
Topazes – lush, pinkish-golden to apricot-hued roughs – whose
colors so exactly duplicated the crystals my folks brought back from
their 1974 Brazilian vacation that my first tendency was to
salivate!

…And then, I realized that there was just one small problem with
the pictuRe: the crystal habits were all wrong for Brazilian
Topazes. So, in which shade did these originally begin their
journeys? Like the majority of the radiologically-enhanced Topazes,
Amethysts, Citrines, Smoky-, Rose- or Praisolite (a.k.a. “Ouro
Verde”) Quartzes, Tourmalines, Aquamarines, Morganites and Green
Beryls Mr. Liccini used to sell to eager buyers, my guess is
white/colorless. Should this be cause for some kind of uprising
amongst us all? I guess that depends on your your answer to one
simple question… now that most of the natural gem resources have
been either diminished or depleted, would you still like to sell
quality colored stone items that retail for less than a thousand
dollars apiece? (It bears consideration.)

Best regards, Douglas Turet, GJ Another Bright Idea! / Turet Design
P.O. Box 162 Arlington, MA 02476 Tel. (617) 325-5328 eFax (928)
222-0815 anotherbrightidea@hotmail.com