Rocks by Request
Rocks by Request (RBR) is different from other e-business diamond retailers. Most of them are brokers, which means that they go to the diamond wholesalers (who buy from cutters) and give each wholesaler a back-end password to update their inventory. RBR purchases its diamonds, which gives us control over the merchandise, such as the flexibility to ship the diamond to local jewelers, while most of the competitors are in consignment agreements with stone cutters to distribute the loose diamonds.
RBR uses a combination of cyberspace and traditional methods for its business model. The purpose is to leverage a “high touch” perception, which is the main “show” in the diamond business. RBR also applies a slightly different approach from other hybrid Internet companies, by using local stores across California as its “front-end” to its customers; most of them own the brick-and-mortar as well as the Internet business.
The business model is appealing for local jewelers who are aware of the importance of e-commerce but are unsure how to use it to expand their business. The RBR model benefits both RBR and local jewelers participating in the program by using the strengths of each. RBR obtains customers in different geographical areas, and the local jewelers widen their customer base, while generating more revenue.
2.1 Company History
Rocks by Request was established in three years ago as an answer to the dot com re-invention. Rock Stone, the visionary behind the brand, created a fusion of traditional brick-and-mortar concept with the touch of connectivity. Mr. Stone did not merely extend the family business, but transform it into the business of the future. The initial funding was partially from Mr. Stone’s savings and from father’s company, including the a substantial number of loose diamonds. After showing a promising growth in three year of operation, Mr. Stone is optimistic that his business will grow further into a world class venture through own financing. He realizes that marketing is the key to “pull” the interest of people to try, as well as expanding distribution outlet by cooperating with local jewelers.
Unlike other e-commerce that involves in selling diamonds online, RBR has a unique approach in establishing its identity. First, RBR does not operate the dot-com’s “virtual store” like the Blue Nile, Diamonds.com, and the rest of e-tailers in the industry. And second, RBR does not identify itself with the dot-com revolution, but as the traditional wholesaler that goes connected with the new economy, of course with the help of the Internet, RBR can now enter the retailing arena in selling diamonds to end consumers.
|Gross Margin %||40.00%||40.00%||40.00%|
|Other Current Assets||$600,000||$200,000||$30,000|
|Total Current Assets||$3,680,000||$2,952,000||$2,917,000|
|Total Long-term Assets||$0||$0||$0|
|Other Current Liabilities (interest free)||$0||$0||$0|
|Total Current Liabilities||$260,000||$200,000||$120,000|
|Total Capital and Liabilities||$3,680,000||$2,952,000||$2,917,000|
2.2 Company Ownership
The company is privately held. The Managing Director of RBR is a third-generation diamond trader, and has already established long-term relationships with local jewelry stores and end customers, some of whom are the third generation of patrons and long-time family clients. In the next growth installment, RBR is open to selling portions of the company’s ownership to investors.
2.3 Company Locations and Facilities
The company currently operates two offices. For strategic and marketing purposes, RBR is headquartered in a building mainly occupied by jewelry suppliers, from loose diamond wholesalers, to precious/semi precious stone suppliers, to jewelry retail stores. It is a destination stop in the city, known for a good bargain in certified loose-diamond jewelry.
RBR also operates a warehouse equipped with state-of-the-art technology that enables quick processing in delivering and returning the loose diamonds to and from partner jewelers.
The employees working at the warehouse include four controllers, who are responsible in finance and accounting, one programmer (who also maintains IT), one buyer who goes out to diamond cutters and selects the products for inventory, and one sales person.