Tucson 2002 "Wholesale" did not exist

Jewelry Discussion
1

All, I have communicated several times with the Jewelers Vigilante
Committee (JVC) concerning wholesale. JVC finally quoted a 1936
court case where the second highest court in the USA described a
wholesale transaction. By their description to be a wholesale
transaction a transaction must consist of a sale of a quantity of
items, items involved in the transaction must be either integrated
into another item for sale to the retail market or sold “as is” to
be sold again to the retail market, and a tax number must be
provided to the seller. Wholesale has nothing at all to do with the
price of the item. Tucson 2002 reality. I sold approximately half my
items to people who bought in a quantity of 1, yes one, as in a
single item. I was in a wholesale show. I sold approximately half
my items to dealers who stated that they had no intention of
reselling the item. The item was their own personal treasure or a
treasure for a loved one. Buyers had no qualms about providing me
with a tax number. When I explained they should be purchasing for
resale they said: No one follows that any more. Wake up, they
said, wholesale is about price. Price is the only reason we have a
wholesale license. We buy cheaper in quantities of one, to sell at
great markups to our customers, or we by cheaper to make expensive
gifts for our loved ones. I have a license which says I can buy at
wholesale.

My contention is that “Wholesale” is no longer a valid term.
Wholesale pertained to a different market that does not exist now.
In the old market sellers stocked items which they bought and had a
vested interest in the promotion of these items. The new market has
memo’s, quick shipment outfits, and foreign salespersons that have
ended the need for anyone to buy stock for a resale operation. A
seller can order anything they want at wholesale in quantities of
one, get any item they desire on memo, or buy the item very cheaply
from a traveling foreign salesperson that has no need for a tax
number.

At Tucson 2002 “Wholesale” did not exist. Not because I did not
pursue wholesale, because the buyers do not care about wholesale.

Gerry Galarneau

2

Dear Gerry, first,I loved your work. Wholesale at the Tucson show is
a joke. I will for the next 12 months get retail customers in my
store with pieces they got “at the show”. This is a market we are
trying to make a living in (Tucson and it probably happens in any
city where these shows go on)and have dealt with for years. This is
probably why I’m so callous toward those who complain about the
market and how unfair it is. Well here is my tack; going by what Mr.
Geller teaches , you must charge for your work because the ability to
keystone materials is fast drying up.This has happened in diamonds
already and will happen in colored stones as the 'net is bringing
wholesalers in touch with ease to retail customers. The market is
always tough on those with too much overhead and it’s not getting any
easier. Sam Patania, Tucson

3

Gerry, I am afraid that there is nothing new about your observations
regarding sales methodology in Tucson…or any other venue, for
that matter ! A resale license is simply a tax dodge. Just about
anybody can get one. As for selling prices, it has long been taken
for granted that price is dependent on quantity. Obviously anyone
who buys a couple of things at a time cannot merit a low price.
Furthermore, anyone who buys for resale is going to demand, first
and foremost, a price advantage that will enable him to sell at a
profit. A profitable price is the product of market dynamics; ergo,
what is the prevailing selling price of a similar item and what
price can I pay and still have a reasonable prospect of reselling it
at a profit. Gemstones are international commodities. The criteria
that determine value in diamonds are generally the same for other
stones. ( Aside from the fact that the supply is controlled ) The
fact that a stone is processed in the United States has nothing
whatever to do with its value. If it has good make, good color, good
weight and clarity then the price is going to fetch a high dollar.
There is no doubt that the market is oversupplied with We
are on the verge of a downturn in prices consistent with
supply/demand economics. Those of us who supply our needs as
jewelers should certainly not pay the asking price in this
scenario…unless, of course, you are quite convinced that the
price is already rock bottom. On the other hand, those of you are
attracted to the wholesale marketplace had better think
twice…unless, of course, you see an opportunity in buying out
other dealers in distress. Ron at Mills Gem, Los Osos, CA

4

Well Gerry as a retailer who buys at wholesale (and who will not buy
from dealers who sell their goods at wholesale prices to individuals
who aren’t buying for resell) I can assure you that there are still
people who buy at wholesale in quantities of more than one (see my
earlier posting on the great day I had buying gems from James and Pat
Alger in January). Perhaps a) you were in the wrong show (I don’t
believe the AGTA show generally lets people like who you were dealing
with in) or b) your product is not one that people can easily resell.
Just something to think about.

Daniel R. Spirer, GG
Spirer Somes Jewelers
1794 Massachusetts Ave
Cambridge, MA 02140
617-491-6000
@spirersomes
www.spirersomes.com

5

Gerry has an interesting point.

Though I am a small home based business I must buy in "quantity"
through many hoops to get a business license so that I am a
legitimate business.

So some of my friends go out and register a trade name, get a bank
account (business, of course) and make some business cards (29.95
for 500) and these same suppliers sell to them at “wholesale” prices
and give them a catalogue.

Granted the suppliers I have dealt with for years do allow me to
order and send a check later or buy on 30- 60 day payments. This I
have had to build up over years of business and/or through the fact
I have dealt with someone else they know and can vouch for me.

Those same suppliers are not good enough to vouch for me to large
"wholesale" companies in the States. I have to go through a whole
other set of hoops for them. Plus the “quantity” that I purchase is
often still too small for their “wholesale” pricing. Add to that,
some suppliers in the US will not ship across the border into
Canada.

I have found that in the US there is a niche market that is neither
wholesale or retail, but a bit of both. They will sell to anyone
with the cash (or good credit) and the pricing starts at retail
prices for single items to “wholesale” prices for larger volumes. A
good example is Rio Grande. If you buy less than 100 oz. you get
reasonable retail prices, and when you buy over 100 oz. you get
"wholesale" prices. Larger quantities get even better. And you can
combine all sheet, wire, grain, bezel, solder together to accumulate
that 100+ oz. Here in Canada, so far the only wholesale of gold and
silver I have found, requires you to buy 100 or more oz. of each
gauge and size. For me that would be over $10, 000, just for my
silver stock. Usually that is what I spend, a little at a time, over
the whole year. Alas, I am but one person making my jewellery. I
also go out to sell my jewellery at various sales around the city.
On top of that I also teach classes in rocks and minerals to schools
during the winter when there are not as many sale venues. It would
take quite a while for me to use $10,000 worth of silver let alone
pay for it.

Thank you for letting me blow off steam. And Life goes on. :slight_smile:

Karen Seidel-Bahr the ‘ROCKLADY’ @Rocklady
May your gems always “Sparkle”

6

I have been “doing” Tucson for 20 years as well as traveling
worldwide to source gems. I usually spend two weeks and it pays. It
is possible to buy at all levels at Tucson because the market is
many layered.

Sometimes I buy from friends coming from overseas, sometimes from a
booth at AGTA. The gem market is far from orderly so the trick is to
learn th e prices. This is difficult requires time and application.
I made sever al purchases with a friend who is a dealer. He or I
will be able to sell these stones wholesale at a fair price or
perhaps retail at a better pri ce.

Yes the gem market is moving toward a type of standardization but as
long as we a dealing with truly rare materials it well never achieve
the stan dardization of the diamond market.

Richard

7

Hi Gerry, I saw your posting about “wholesale”. Sure, you are right…
Business is moving faster and faster, and you have to adapt to 3rd
millenium. But at the same time, you are wrong as well : who is
responsible for that situation? You !

And why ? Because you sold to this 50% people who were not real
wholesalers … If we go further in your logic, you should have put
a poster on your booth, saying “wholesale prices over 10 identical
items only” or something like that. But you didn’t, because you need
to sell. Everybody needs to sell. Me too. And when I meet somebody
who wants to buy, I don’t ask either he is a wholesaler or not, I
just ask if he has good money for me. And I negociate the prices. If
he his a wholesaler, he knows the wholesale prices. If not … Well,
I get a better margin. That’s all. Everything is moving very fast
today. Even gembusiness. If you don’t catch the train, you’ll stay
behind. Have a nice time, anyway… Yann from France

8 
you must charge for your work because the ability to keystone
materials is fast drying up.This has happened in diamonds already
and  will happen in colored stones as the 'net is bringing
wholesalers in touch with ease to retail customers. The market is
always tough on those with too much overhead and it's not getting
any easier.

Unfortunately, many believe that those who make jewelry in the USA
should be charging the same for it as the imported stuff. It seems
that workmanship doesn’t matter (not saying that items made
elsewhere aren’t of good quality . . .) but, consumers have
“cheapened down” to the point where no one will be able to make any
profit at all, and we will all be working just above “non skilled”
labor wages.

I keep hearing “oh, I’m looking for a bargain. . .” fabricated by
hand is no longer a bargain if it is over $50.00!

9

I use a supplier for my silver that starts its price break at 50oz
and I think they do a great job…1-800-545-6540 indian jewelers
supply in Gallup New Mexico

Rick Sindeband
Skystone and Silver
web www.skystoneandsilver.com

10

Hi All:This gets us back to pricing individual items again. I am
constantly confused about how to set my prices, despite all the
formulas we discussed in the past. There is so much pretty jewelry
available at low prices that people can no longer distinguish
between the mass produced stuff and the artist produced stuff.(Or
maybe they don’t care). So what do we do? Any answers? Sandra

11

Our results for the GLDA Show are mixed. We only did $1500 in sales,
which pays for only half the cost of the booth itself. However, its
about $1500 better than we did at the GLDA Las Vegas Show last
May/June.

I attribute our low sales to a few different factors:

  1. Economy/Low Turnout - Not nearly as many buyers as previous
    years, and those who were there typically bought onesies/twosies,
    often for themselves rather than their businesses. I also notices a
    LOT of people who got in because they know someone with a business
    license, but aren’t in the business themselves. I think Gerry already
    covered that.

  2. Location - This was our first Tucson show and we were tucked away
    in the Promenade Room, which has no inside connection with the rest
    of the hotel. Even clients of ours who were looking for us at the
    GLDA couldn’t find us. However, we have managed to secure a better
    location for next year. That’s where all of our revenues from this
    show went.

  3. Product - You can’t swing a show promoter without hitting a pearl
    dealer. Even with our competitive prices, it’s still hard to compete
    when there are a dozen other dealers at the same show. Of the other
    dealers in the Promenade room, the ones doing very well were selling
    finished jewelry - one with really nice high-end designer pieces (and
    not cheap!), the other selling cheap stuff from Hong Kong (she made a
    killing!)

I don’t consider the show a failure for us, because it still gave us
at least a little exposure with new contacts. It also provided us
some insight about what we can do to have a better show next year
(better location; fewer loose pearls; more high-end designer
jewelry). I’m not giving up!

JoAnna Kelleher
Pearl Exotics Trading Company
Progressive Jewelry - Commericial Casting - Tahitian Pearls
www.pearlexotics.com

12 
    I keep hearing "oh, I'm looking for a bargain. . ." fabricated
by hand is no longer a bargain if it is over $50.00!

I think this is what the problem with almost any show type selling
situation. The public gets mixed up with the wholesale purchasers.
AGTA with all it’s problems still does the best at maintaining a
wholesale show at least here in Tucson. I would like to hear from any
AGTA sellers if they get the “bargain hunters” at their booths during
the Tucson Show? From my own perspective I look at price not as a
primary deciding factor in any unset gem stone purchase but , for the
unusual or interesting. Some thing I think I can sell but, something
that I am interested in as well. I am not wealthy enough to ignore
the market but, at the same time I don’t make enough money so that I
am willing to waste my time with things I don’t like. In the final
analysis in my own marketing strategy, flawed as it may be and
certainly not short term, I sell myself , the work can be taken home
though. Sam Patania, Tucson

13

True, Fishbre-

Of course, consumers have not cheapened down on their own. Consumers
had to be extensively de-educated to obscure the distinction between
the well thought-out piece of jewelry, the well-cut, carefully
selected stone, and the cheap, shoddy workmanship, the poorly
polished, mass produced stones hyped by the bottom-feeders in this
business. If the consumer were educated as to quality, he/she would
seek it out. Jewelry, after all, is amongst other things a display of
one’s taste and one’s affluence- nobody would knowingly display a
piece of jewelry on their person if they understood that it reflected
a lack of taste or money. The problem is, there are many, many
jewelry businesses making a hefty profit by selling cheap and shoddy
merchandise, and representing that merchandise to the public as
luxury goods. Hey, we know, or should know, the difference between a
well-set quality gemstone and a mass-manufactured piece of crap, but
this is our field of interest. When someone off the street walks in
to a jewelry store, they look to the person behind the counter as an
expert; unfortunately, that person behind the counter often will be
peddling poorly made stuff with cheap commercial stones, and will
tell the customer whatever they have to in order to sell their shoddy
goods .

Jewelers, metalsmiths and lapidaries need to educate the public
about what good jewelry is- if we try to compete on the basis of
price, we will find yourselves competing with folks in 3rd world
countries who work 16 hour days and sleep on their shop floor. Who
wants to live like that?

14

You must find your own way. Do what you are passionate about.
Don’t look to see what others are doing. If you compete with mass
produced stuff quit. There are factories that can produce cheaper.
The competition for low end is intense.

Make things that are distinctively your own, then decide how much
you need to make. There is no formula for pricing unless you’re a
factory.

There are people who buy jewelry who can distinguish between mass
produced and handmade, but you have to find the proper venue for your
work. This isn’t gospel; just my thoughts on the subject. Finally,
this thread on wholesale is driving me up the wall. The way
business is conducted has evolved. The wholesale/retail convention
is no longer pertinent. If you have a reseller’s license it means
you can buy metal without paying sales tax since the sales tax will
be collected when you sell your work. It doesn’t mean you’ll get a
better price when you buy materials at, say, the Tucson gem shows.
Wholesale is when you buy a whole lot.

15

Folks,

This moaning about the masses having been "cheapened down" is more

than a little off target. The high quality work in our trade (or any
trade for that matter) has always been done for 1% or less of the
population. The main reason for this is that they are the only ones
that can afford the time the smith needs to produce the high quality
work. This is a very limited market, and very difficult to sell to.
The hours required to do high quality work have required a high
price in any society in any age. That cost has got to be passed
along to the customer or you go out of business. So if you want to
stay in business you have to find a price point in the market that
will allow you to sell enough work to stay in business. In times
past the guilds or government controlled how many smiths could work
in a certain area, so there was less (or no) competition. Now there
are many fewer restrictions on who can make and sell work so there
is more competition for each customer. If you want to sell high
quality work you must find and educate a customer base who can
afford to pay for the hours you put into your work. The educate part
is very important. The customers by in large do not have the
foggiest notion of what defines quality work unless they have
already been educated in the finer points of our craft. Appreciation
of fine craftsmanship is not something that people are born with, it
is an acquired taste. They are certainly mot going to learn it from
the mass media or in school. So if you just put your work out on the
counter and don’t take the time to educate the potential client as
to the reasons that you are charging the amount of money you are
asking then don’t be surprised if they walk to the next booth/store
and buy the less expensive item. Think about your buying habits, do
you automatically buy a more expensive item just because it costs
more? Probably not. You will only spend more for something when it
has a more desirable trait like a designer label or a brand name
you trust or it is of higher quality. The reason you know about the
designer or the brand or the quality is you have been educated about
that product by advertising, or a magazine, or a sales person
telling you about it, or your own research, but somehow you were
educated to belive that the more expensive item is more desirable.
So you must inform and educate the consumer to sell your high
quality work or the low price will always win out. This is what
marketing is all about.

Jim

James Binnion Metal Arts
Phone (360) 756-6550
Toll Free (877) 408 7287
Fax (360) 756-2160

@James_Binnion
Member of the Better Business Bureau

16 
        I am constantly confused about how to set my prices,
despite all the formulas we discussed in the past.

Dear Sandra, I think a look at the numbers of “cost of goods” of
hard pricing of materials is at least the primary concern in pricing.
You can’t maintain an inventory no matter how big or small by selling
less than you buy. The art of pricing then comes in at your time in
producing the items. My time is a much more market sensitive variable
than any other pricing factor. Sometimes it is worth much and
sometimes not. The atmosphere of my shop, the education I give to my
clients, the inventory I “have to make” because I fall in love with
materials or technique and my experience and willingness to learn are
all things which are market sensitive. By market sensitive I mean,
how hungry am I at the present time? Do I need money today or can I
sit and wait. Do I want to fund a project or finance a new tool? No
body can price with so much confidence they don’t always look over
their shoulder and wonder if they did it right. Sam Patania, Tucson

17 
   I use a supplier for my silver that starts its price break at
50oz and I think they do a great job....1-800-545-6540 indian
jewelers supply in Gallup New Mexico

Thanks to Rick Sindeband for his word-of-mouth.

I wasn’t in on the automatic 50 oz break sale, or if so, my
recollection was fuzzy. It may have been in Tucson, or a specific
arrangement we have at our Gallup and Albuquerque stores.

Whatever the specifics, caveats apply. In Tucson gem show’s last
days, we are anxious to move material, not carry it back up to 6500
ft above sea level. So at that time and place, a 50 oz. deal is
made.

Owing to the fact that Rick’s shop is fairly close to New Mexico, he
may show up in person at those stores, and has gone through the
process of proving certain volume of sales over a specific time
period to get a certain break on metals. We are very glad to do such
things on a one-by-one basis. Sometimes, we run specials in our
stores, too. No real hard-and-fast schedule I can point to on that,
sorry.

And we haven’t the payroll to have a parliament of suggesters
employed in generating discounts on a regular basis. You the
customer would end up ultimately paying for that.

All we can do is our level best every business day for the finest
folks on earth, our customers.

Thanks for allowing me to rant.

Dan Woodard, IJS

18 
    formulas we discussed in the past.  There is so much pretty
jewelry available at low prices that people can no longer
distinguish between the mass produced stuff and the artist produced
stuff.(Or maybe they don't care).  So what do we do?  Any answers? 
Sandra

Hi Sandra;

Usually, if the price is low on a mass produced article, the
manufacturing and distribution chain has cut a corner or two
somewhere. Here are some ways they compromise quality:

Inferior grades of stones Off-color white gold covered up with
Rhodium plating Sloppy setting work (stones fall out in the
ultrasonic) Castings hollowed out till they’re really thin and flimsy
10K, or underkarated gold Badly matched stones Synthetics passed off
as genuine gemstones (you gonna get out the polariscope and check all
those tiny amethysts?) Cast-in-place settings, sometimes involving
stones that wouldn’t qualify as abrasive grade material and couldn’t
be set any other way Bad finish and assembly, appearing as mold
flashings, pits, cracks, dull areas, loose stones, ad nauseum.

But most significantly, from the artists point of view, the most
valid criticism of these things is in the overall general quality of
workmanship and design. Formulaic design, with little regard to
durability. Stolen designs, possible contraband materials, certainly
no regard for whether or not they’re using “conflict” diamonds.
Here, in my opinion, is your very best argument for a customer
choosing your work above the marketed crap:

“I take the utmost care in the selection of materials, the execution
of design, and I manufacture to specifications that meet my own,
personal criteria of the best I can accomplish. In short, I take
great pride in my work and place the utmost value on the relationship
I have with my customers and my position in the community.
Therefore, I stand behind my work completely.” Ask them if they think
they could get their money back from the other guys if they were
dissatisfied. Have they tried? Sometimes they have and they won’t
tell you. You can use whatever means at your disposal to get this
message across to your market, but you must finally fall back on your
faith that when you do your best, it will ultimately be appreciated.
Added note: this in no way implies that you will become rich doing
so! You’ll need to learn to appreciate more than just financial
rewards. Here is one of my favorite “Davism’s” for doing business, in
fact, it’s become my mantra:

Don’t compete down!

David L. Huffman (one man’s soapbox is another man’s sales pitch)

19

There is another side to this ongoing commentary, basic education in
the “finer” things in life such as art education, music
appreciation, etc. is no longer a part of our education system. My
European parents and my schooling taught me to love, appreciate and
understand all of the above.

I live close to a major Marine base and frequently see these young
persons in the Mall shops thrilled to be “investing” in a beautiful
appearing piece of jewelry. Happiness and pride all over their faces
as they sign the contract indebting themselves for this special
purchase. They know no better, their parents knew no better. The
education system failed them, advertising budgets entrap them.
Diamonds are forever, how can they know any different?

To be absolutely fair, there have been some exquisite designs in
well executed silver work, at very affordable prices all over Tucson
for a few years now. I saw a very innovative jade in sterling ring a
couple of years ago and wanted it. I had run out of checks and the
dealer did not accept American Express. He gave me the ring and his
card and told me to mail him a check after I had returned home! He
did not know me, I had not bought from him before and this was for
me personally. Just when have you seen that happen?

Not every overseas worker is unhappy with his lot. The majority
enjoy and take pride in their work. Scapegoating them serves no
purpose. It is time for us to recognize our strengths and build
around them. The formula to success is still “find a need and fill
it.” Teresa

20

I would hope that those of us who do quality work do not denigrate
those who do work of less quality. The idea is to present your story
to your potential customer and explain what distinguishes your work
and makes it special. This comment is not a reaction to your comment
Lee. Outside of this forum it’s not a good idea to complain to the
public about poor quality goods. Last year I did eighteen shows. I
work with fine quality opal which I cut myself. Often someone will
look at a ring and exclaim about the beautiful black opal. It’s not
black opal but quality crystal opal. Some jewelers have told them
that that look is black opal misrepresenting the material and
spreading misThe way I handle this situation is to show
the person a black opal rub, a white base opal and a piece of rough
crystal opal and explain the distinctions. People in most cases
appreciate the presentation and frequently become customers. I’m
convinced that the personal approach and the story behind the work
is what makes the difference and the sale. We can and should educate
our customer base.