Diamond Brokers of Florida Trashing Pricescope

[pricescope]

Date: 1/20/2005 1

4:25 PM
Author: AGBF

Date: 1/20/2005 12:55:44 PM
Author: leonid


More food for thoughts: Publications in JCK Magazine:

Pricescope: friend or foe?

Leonid,

I can only read the very beginning of this unless I want to pay for a subscription to the journal. Can you (or someone else who has access to the entire article) summarize it somewhere (in another thread, perhaps)?

Deb

I haven't seen the article but it was written after our (Garry & I) interview to Rob Bates in Vegas. We tried to comment on general myths that industry holds against internet, consumers searching for information in the web, internet prices, and internet vendors.


All the talks about the internet that we've heard on the show indicated little understanding of this phenomenon and a lot of fear and anger. We've said that jewelers should go to the internet and listen to what consumers have to say and that price is not the main factor while service, quality, and reliability are, etc, etc.


By the way, do you know what “K” in “JCK” stands for?

 

[Mara]

Date: 1/20/2005 12:55:44 PM
Author: leonid



More food for thoughts: Publications in JCK Magazine:
Internet sites may be undercutting retailers
Pricescope: friend or foe?


Quotes:

“Roshto is upset about pricescope.com, a site that compares diamond prices for consumers on sites like dirtcheapdiamonds.com and jewelryzone.com. Roshto says that most of the companies selling on pricescope.com simply use listings from Polygon’s CertNet and RapNet – which retailers use as well.”
….
“Sometimes you try and sell a stone to a customer and the customer comes in two weeks later with the exact same stone for 2% over cost,” he says. “There is no way a retailer can survive on that kind of margin. A lot of business is flying out the door because of it.”

I'm sure making this comment will get me no B&M allies, but when I read a comment like that from a businessman, all I can think of is 'WHINER!'

Of course no one likes change--it's never fun and usually can be costly. BUT if I saw things like the above happening and realized that I could not be competitive to a 2% markup when I charged 20%, then I would need to start thinking smarter, not angrier. Angry gets you nowhere.

So the internet is cutting into margins. That is happening in every industry as more and more consumers are shopping online. It's not unique to the diamond or jewelry industry. Business owners have to start thinking smart. NEVER think you are OWED business by a customer, especially when they have more than one place to shop.

How is losing a customer to online sales any better than losing them to another jeweler up the street? It's still a lost sale. Your job as a business owner is to figure out how to get that sale, that is if you really want it.

What else can you offer besides just the diamond? A diverse setting collection? A package deal, aka buy the stone and setting and get 10% off? The lifetime warranty/guarantee thing for me doesn't carry much weight because I don't intend to keep my stone or setting for my lifetime. What about a branded giveaway with purchase? When they buy a stone or setting from you, give them something fun as a takeaway--whether it's a branded diamond paperweight for their desk, a liquid mousepad with floating diamonds in it, or something like a jewelry cleaner branded with your co name that they will use daily or weekly to clean their stone. What better advertising for a future purchase than something they use all the time and recall their great experience with you?

When business starts to become more cut-throat and it's hard to compete on a dollar by dollar comparison, value-add begins to become even more important. Coming from a world of eCommerce where every competitor and their sister can one-up you week after week with free shipping or 25% off as opposed to 15%, it pays to start thinking smart and out of the box. Don't whine about how the competitors are eating up your sales and profits, do something about it.

Every time I see a comment like that above from B&M, I have to shake my head because it's such an ENTITLED and narrow way of thinking. Don't get mad, do something about it! Fight fire with fire. It's your business, figure out how to keep it strong and don't blame customers for trying to get the best deal for their money elsewhere if the value-add of your product is not absoulely visibly apparent to them.

Edited to add: My whole post above was written more in a marketing vein than a consumer..as a BASIC CONSUMER, of course I am happy to see margins as low as 2% over cost...because I want the best deal possible on a stone. However, I do see both sides of the story.

 

[Nachoman]

Date: 1/20/2005 1:21:24 PM
Author: fire&ice
And, we completely understand the sentiment. Honestly though, PS didn''t start this fire. All industries are affected. The way we shop is/has changing/changed. Costco even enters into this picture. It''s not just the internet.

Exactly, consumers are now able to shop for the best price globally instead of only locally. Unfortunately retailers need to adapt or be left behind. To insult the ''educated consumer'' is foolish, referrals were a big part of a B&M jewelry store''s business and will continue to be an even bigger one in the internet age. Lets face it, bad treatement travels very fast on the internet, I''ve seen a bunch of places treat their customers poorly, only to have the news spread to every related forum out there. And while you can insult the forum goers as ''having no job'' or ''no life'', the fact is most future customers are out in forums nowadays, you can either cater to them or insult them.

It seems like he would like for only industry ''experts'' be allowed to give advice on a certain diamond, yet that method is also exceedingly dishonest. It''s like going into a car dealership and asking the salesperson for the ''best deal'' on the ''best car'', trusting that since he is an ''industry expert'' he must be telling you the truth. Do you think you will get the best deal? Fat chance, you''re going to get ripped off. Like what other''s have said, a lot of B&M are rebelling or are angry the internet is causing such a change in their business, what they don''t realize is that there is a lot gained by it as well if you adapt accordingly. There are plenty of consumers out there for everyone.

 

[Petra]

Date: 1/20/2005 12:55:44 PM
Author: leonid

Sometimes you try and sell a stone to a customer and the customer comes in two weeks later with the exact same stone for 2% over cost,” he says. “There is no way a retailer can survive on that kind of margin. A lot of business is flying out the door because of it.”

That''s just it. I''ve been reading this site (and DT but they seem a tad syphophantic over there) since my boyfriend and I decided to get married. I think it is stupid of people like Brad to really think that customers aren''t looking for the best deal. OK I''ll pay a little extra for really good service, but no one has given me such good service that I''m willing to pay 3X as much for the same product (actually we''ve encountered really rude staff everywhere we''ve gone.)

Hey we (boyfriend and I) bought our stone online and the ring is being made by Mark Morell. Every BM we ever walked into blew us off for various reasons.

Until this thread I had never heard anything bad about DBOF.

If the issue was that Brad is fretting we''re being ripped off where were people like him when Ross Simons sold my parents tourmalines and said they were emeralds? Hmmm? No I think the issue is that the Brads of the world are losing business to the internet as people look for a better deal and it upsets them. If Brad is so worried about fraud there is plenty of it out there in BM stores, perhaps he should go fight it there.

 

[Hest88]

No I think the issue is that the Brads of the world are losing business to the internet as people look for a better deal and it upsets them.

Actually, this is not the complete story. Brad was actually one of the first people to benefit from Internet traffic and he''s been accused before of undercutting prices. I wouldn''t be surprised if in the early days of DT DBOF got a majority of the business that originated from that site. I can only speculate that sometime in the last few years other people have gotten as good or better at the game, so Brad is trying to re-write history by painting himself as a traditional B&M.

 

[Petra]

Date: 1/20/2005 2:18:51 PM
Author: Hest88

Actually, this is not the complete story. .

OK In any case. Awwwwwwwww. Poor him.

 

[widget]

"Syphophantic"??????

.....couldn''t find it in the dictionary.....

widget

 

[Matata]

Date: 1/20/2005 2:38:16 PM
Author: widget
''Syphophantic''??????

.....couldn''t find it in the dictionary.....

widget

Try sycophant.

 

[Mara]

syc·o·phant ( P ) Pronunciation Key (sk-fnt, sk-)
n.
A servile self-seeker who attempts to win favor by flattering influential people.

 

[fire&ice]

Date: 1/20/2005 1:34:56 PM


By the way, do you know what “K” in “JCK” stands for?

Keystone?

 

[Kaleigh]

Jewelers circular Keystone, JCK! I used to work for JE Caldwells in Philly and they got the magazine there. I used to love looking at all the great eye candy!

 

[AGBF]

Date: 1/20/2005 3:10:22 PM
Author: fire&ice

Date: 1/20/2005 1:34:56 PM



By the way, do you know what “K” in “JCK” stands for?

Keystone?

Give the little lady a prize! Jewelers'' Circular Keystone.

Deb

 

[fire&ice]

Date: 1/20/2005 1:36:46 PM
When business starts to become more cut-throat and it''s hard to compete on a dollar by dollar comparison, value-add begins to become even more important. Coming from a world of eCommerce where every competitor and their sister can one-up you week after week with free shipping or 25% off as opposed to 15%, it pays to start thinking smart and out of the box. Don''t whine about how the competitors are eating up your sales and profits, do something about it.

I can remember the gasoline price wars between convenience stores. I would venture a guess that some wouldn''t even break even on the gas. Didn''t matter. That wasn''t where the money was at. You just needed to get people in the door because 9 out of 10 people were going to buy something else that you made quite a bit of money on. And, develop a routine of doing such.

Seems like a pretty easy concept to grasp.

 

[pricescope]

Date: 1/20/2005 3:10:22 PM
Author: fire&ice

Keystone?

Yes, but what does "Keystone" mean for jewelers?

 

[AGBF]

Leonid's link didn't work, but I did find this on the 'net. The article begins with a description of an irate jeweler insisting that internet diamond vendors operate on a 2%-4% margin and that she cannot compete with that. It goes on to refute that assertion, saying:

"Misconceptions. Pricescope founder Leonid Tcharnyi seemed taken aback by the controversy and says the industry has misconceptions about his site. 'Yes, prices [on Pricescope] are competitive, but the margins are not 2%,' he said. 'It is one of the myths that Internet buying is all about price. The cheapest person doesn't always win. People will pay extra for a vendor that is older and more experienced. It's the person who takes the consumers' interests to heart who gets the sale.'

He says it's wrong 'to say there's no connection between consumer and buyer on the Internet. Many customers pick up the phone and talk to their suppliers, the same as in a jewelry store. Some very strong relationships develop.'"


A link to the full article is provided below.

Pricescope: Friend or Foe? by Rob Bates

 

[fire&ice]

keystone to a jeweler is 100% markup. 100.00 wholesale - sell at 200 retail.

 

[pricescope]

F&I is the winner. Keystone is something many jewelers used to work for.

Deb, I'm affraid you cannot repost the article. Please take a quote or two and give a link to where you took it from.

"older and more experienced"

That is not exactly what I said. I said something that people often prefer buying from the known vendors (because of the reputaion, brand, experince, etc) even if they had to pay higher price for the same/similar diamond.

 

[fire&ice]

Date: 1/20/2005 3:37:37 PM
Author: Feydakin

Date: 1/20/2005 3:21:13 PM
Author: leonid

Yes, but what does ''Keystone'' mean for jewelers?

Same thing it means for most retailers.. 100% markup

Keystone can be very fair, 3x Keystone may not be..

Yeah, but it isn''t a classic markup for luxury high ticket items. Cars, boats, furs - all aren''t on 100% markup. And - this also includes groceries, gasoline, & many other goods.

A retailer can not expect to get 100% markup on everything. Sometimes I operate on 10% - and yes, some things I get a more than 3x markup. The key is to price yourself competitively. A retailer isn''t *owed* a 100% markup. It''s not the nature of a free economy. And, can''t be a basic principal to running a business.

Even the little non-prof gift shop ( a regular retail establishment) does not expect 100% on everything. It''s an aim; but, we have lost money in trying to reduce inventory. And, on unique items that we develop - we do have 3x markup.

 

[lostdog]

"Then we have the recent LJ Search where every single B&M with a JBT number was added to the list wihout them being told, and then having inventory and pricing assigned to them, again without them being told, was, in my opinion, a very bad way to open the search.. "

Tell it to Google......

Or any other search engine.


"If your shopping for a diamond would you trust the advice of other consumers who may have spent six months or more on a website, and think they can give expert advice behind a cumputer screen about diamonds they haven`t even seen in person ? "

No, I would much rather go into a place of business and have the person who stands to profit from my purchase tell me what to buy, attempt to conduct the transaction in a language of emotions and loose statements assigning unverifiable superlatives to his inventory, and then without making quality or price comparison to other items available and without anything more detailed than a lab certificate which may or may not describe cut parameters (and maybe not even that), pay a premium for the seller's promises. That would make me feel really confident about my transaction, one of the largest single purchases I might ever make.

Isn't that the model being proposed as an alternative to Pricescope?

Meanwhile, there's an express train bearing down on this industry, and complaining about how bright the train's lights are is not going to have the same success as figuring out how not to be hit by it. Two ways seem to stand out: Either sell premium "brand" with obvious quality and full service to get premium price, easiest to do if you are Tiffany's; or deal in full information and full service to educated consumers seeking quality, as PS and other vendors are doing. Even Tiffany's feels the squeeze coming, look how they moved to secure thier own sources in Canada and elsewhere recently. Everybody else is going to get run over by Blue Nile and whatever other big player shows up in that space. Imagine the kind of player who can offer even greater vertical integration and deeper pocket resources than BN. (Or option 3, stick it out at the mall selling low, marketing high, making the real money in the financing, and hoping your consumers don't learn more about the subject than your sales staff before you can close the deal.)

It isn't a matter of who's nice. A new economic imperative is developing and businesses that don't respond well to the new terms will vanish. You can find an endless number of historical examples where one development changed the face of an entire industry. The iced railroad car wiped out virtually all of the local butchershops about 100 years ago, while the refridgerated one wiped out most of the stockyards 35 years ago. The national highway system consolidated the food industry in short order in the 40s-50s. Blockbuster Video is on the ropes while NetFlix is growing, B&M versus snailmail/internet hybrid. Microsoft lives in terror of open source, which only thrived because users tired of the imbalance of power and the cost/quality/control ratios. Very small shifts can massively changed the landscape of commerce, and blaming it (laughably) on "Pricescope evildoers" does nothing to address the real issue.

Still checking my mailbox for that shill check. It should be here any day now.......

 

[Hest88]

I love you, Lostdog.

The slim profit margins is a red herring, anyway, deluding traditional jewelers into thinking Internet vendors are using an unfair advantage. These traditional jewelers refuse to admit what is really going on---that people come to PS seeking superior knowledge not necessarily lower prices---so they hide behind their righteousness instead of facing the 21st Century.

 

[Lurchie]

Date: 1/20/2005 10:40:37 AM
Author: AGBF

Date: 1/20/2005 9:50:12 AM
Author: fire&ice
To elevate PS to some religious form of the ''devil'' is weird if, at the very least....

It reminded me of President Bush, actually.

Deborah

OMG, me too! I heard Bush added PS to the Axis of Evil in his inaugural speech today!

 

[aljdewey]

Date: 1/20/2005 4:56:42 PM
Author: lostdog

Meanwhile, there''s an express train bearing down on this industry, and complaining about how bright the train''s lights are is not going to have the same success as figuring out how not to be hit by it.

This is CLASSIC.......so well said that it took me five minutes to stop applauding and free up my hands to type a reply.

Exceptional points! There are so many industries that have had to reinvent themselves and keep up with delivering their product in a way that customers want to get it. The entertainment industry, the telecommunications industry, and yes, the diamond industry.

 

[pricescope]

Date: 1/20/2005 4:56:42 PM
Author: lostdog

Meanwhile, there''s an express train bearing down on this industry, and complaining about how bright the train''s lights are is not going to have the same success as figuring out how not to be hit by it.

Thank you, Lostdog.

I like trains

 

[Rank Amateur]

Who is more biased and/or dangerous, the consumer firing off recommendations based on his nearsighted view of the diamond world or the vendor with a financial interest in peddling his wares?

 

[codex57]

Date: 1/20/2005 5:43:58 PM
Author: Rank Amateur
Who is more biased and/or dangerous, the consumer firing off recommendations based on his nearsighted view of the diamond world or the vendor with a financial interest in peddling his wares?

Exactly. Diamonds are an expensive item. Like cars. As such, I'm going to do some research before I drop that kind of money on one. I'm more inclined to listen to fellow consumers for recommendations over the vendors b/c the consumers have no financial stake and are just offering up their own experiences. Even my fiance, who admits she's bad at research, knows enough to look for several positive references before deciding. The consumers savvy enough to find their way onto this site tend to be savvy enough to figure out the nuances of deciding who to trust on an anonymous board. Experience from shopping at eBay and it's feedback system helps also (I look at number of feedback and what's said and whether they bought or sold).

Brad's ranting and raving about the evil beings on PS. Yet, if they're so evil, how is this any worse than the typical B&M store (especially the mall ones) where the sales people have varying degrees of knowledge, ethics, and inclination to teach the consumer? Plus, it's important to note that the people on PS were smart enough to look for information about diamonds on the web. Is he stupid enough to think that this site is the only place I (or any other consumer) visited for diamond information. I stuck around here b/c in my research, I decided I liked this place. I can leave whenever I like.

And no, this site didn't push me into buying online. The fact that I'm even on here shows that I can use a computer. I've likely searched the web. That seems to predispose me into buying online. Did that happen? No. I still bought at a B&M. Yes, the owner was aware of Pricescope. Was he happy about his internet competitors? No. But here's the key difference btw him and Brad. Here's what he said to me about Pricescope and internet retailers (as near as I can remember it): "I know you've been on Pricescope. I can't compete completely with the internet b/c of overhead, inventory, etc. but that's my problem, not yours." We then proceeded to talk about stuff he could offer instead of a pure pricematch. For various reasons, one of them being his attitude towards me, convinced me to give up what likely was a few hundred dollars in savings and buy from him anyways because I liked what he had to offer. Attitude matters a lot (see us ranting and raving about bad salespeople in that "Jewelry Store Rant" thread) and Brad's attitude in his DT thread has shocked me so much, not only will I never buy from him, if anyone asks me, I'd suggest they avoid him as well b/c I'm not convinced he'd be all that truthful to a consumer based on what he's posted despite the good things other people say about him and his assistant.

One last rant before I get off my soapbox. Internet stores, make sure you have a well designed website. There are lots of sites w/ great reps on here. However, if I buy from one, I'm going to WhiteFlash or even BlueNile first (and prolly last) b/c they're site is so easy to use and looks nice. Same goes for B&M stores. I ultimately decided to stop by the store I bought my ring from b/c I liked his store's layout and the fact that he didn't rely so heavily on that jeweler's lighting that artificially enhances the brilliance of stones.

Let's see if my post shows up on DT now.

 

[strmrdr]

You know what Iv read this thread all 5 pages and read his rants and my feelings are that it isnt worth getting worked up over.
Let him stew in his own bitterness and lets get on with talking about pretty rocks, pretty Ladies, awesome proposal stories and kewl cars.

 

[deluca576]

Well.....I have never posted on here, but have been reading threads on here for the last few weeks. The first thing I want to say is that I am recently engaged, and have been researching about diamonds to find out some information. I am young, and don''t know too much about diamonds, but I can tell you this. After reading all of the bashing that goes on on this site, I would not purchase a diamond from any of you. This is extremely unprofessional. If you are going to participate on a site that is meant to give information to the consumer, you should be giving information about the stones, and not worrying about what everyone else is doing in their business.
I got interested in what was being said about how PS was posting jewlers without their permission, and am also surprised to find out that there is not lawsuit against them. I think that this is underhanded, and just plain wrong. If you thought what you were doing was "right" or was going to "help the jewler," you should have had no problem notifying them that they were going to be on your site.
Just some food for thought from a new consumers point of view.

 

[perry]

I agree with Strmrdr:

It''s time to move on. While there has been some interesting discussion here concerning the various possible reasons for that thread - which I have found enlightening. It seems to me that we have pretty much exhasusted things - except for "tit for tat".

I value pricescope, and try to contribute in my own way (and sometimes goof), but like any forum I keep an eye out for things that don''t sound right.

I wish I could spend more time here. I typically can only follow a few threads. I am sure that I am missing out on a lot.

Let''s move on to other subjects and helping other people.

Perry

 

[canuk-gal]

Date: 1/20/2005 9:23:41 PM
Author: perry
I agree with Strmrdr:

It''s time to move on. While there has been some interesting discussion here concerning the various possible reasons for that thread - which I have found enlightening. It seems to me that we have pretty much exhasusted things - except for ''tit for tat''.

HI:

Since we cannot fill the chasm, how about building a bridge?

cheers--Sharon

 

[Rank Amateur]

Date: 1/20/2005 9:16:15 PM
Author: deluca576
Well.....I have never posted on here

Hi deluca! Where do you usually post?