Diamond Retailer Business Plan

RBR’s main product is loose diamonds, from emerald-cut to round-cut diamonds, with brilliant color and V VS 1, meaning Very, Very Slightly Included, or an excellent quality diamond. All of RBR’s diamonds are GIA certified (Gemological Institute of America™) with laser inscription inside. RBR was positioned as a diamond wholesaler rather than a retailer in the past. RBR had been supplying local jewelers in the area for more than twenty years and maintained very strong relationships.

In the diamond business, we determine the price of a diamond according to the “4C” criteria:

Clarity: The most expensive diamond is the one that is absolutely clear in clarity, but many of them have inclusions (scratches or trace minerals) that can detract from the pure beauty of the diamond. Clarity has several categories that affect the price of a diamond: FL (Flawless, no internal/external flaws), VVS1, VVS2 (Very, Very Slightly Included, an excellent quality of diamond), VS1, VS2 (Very Slightly Included, not visible to the eye), S1, S2 (Slightly Included, may be visible to the eye), I1, I2, I3 (Included, the lowest grades of clarity). RBR does not carry the last two clarity grades in its inventory.

Color: A diamond can divide light into a spectrum of colors, and reflect light as more or less colorful, depending on the color grade. The less color in a diamond, the better the color grade. Color grades are categorized into D (absolutely colorless, the highest color grade), E (colorless, only traces of color and only detected by gemologists), F (colorless, slight color detected, still a high quality diamond), G-H (near colorless, color noticeable, but still an excellent value), I-J (near colorless, color slightly detectable), K-M (low grade color), N-Z (low grade color). RBR does not carry the last three color grades in its inventory to maintain a good selection of diamonds.

Cut: The roundness, depth, width and uniformity of the facets determine a diamond’s brilliance. Cut is the most important characteristic of a diamond; even with perfect color and clarity, a poor cut will affect its brilliance.

Carat: The weight of a diamond. In the engagement-ring market today, usually the “dowry” is around 1 carat and above.

3.1 Product Description

RBR carries various diamond shapes in its inventory:

• Round, with a price ranging from $360 to $970,000 depending on the 4Cs. 
• Princess, with a price ranging from $370 to $200,000 depending on the 4Cs. 
• Emerald, with a price ranging from $270 to $550,000 depending on the 4Cs. 
• Asscher, with a price ranging from $500 to $300,000 depending on the 4Cs. 
• Marquis, with a price ranging from $615 to $500,000 depending on the 4Cs. 
• Oval, with a price ranging from $460 to $240,000 depending on the 4Cs. 
• Radiant, with a price ranging from $470 to $512,000 depending on the 4Cs. 
• Pear, with a price ranging from $460 to $1,150,000 depending on the 4Cs. 
• Heart, with a price ranging from $570 to $280,000 depending on the 4Cs. 
• Cushion, with a price ranging from $895 to $480,000 depending on the 4Cs. 

In addition to our selection of fine diamonds, we also carry signature items made exclusively for RBR. These collections include the world’s finest round-cut diamonds and emerald-cut diamonds, which are rare.

3.2 Sales Literature

In addition to the interactive website, we also publish an annual diamond catalog that is distributed throughout our network of local jewelers. The catalog includes the diamond report and information regarding the 4Cs (Carat, Clarity, Color, Cut) of the merchandise. The names and addresses of RBR’s network jewelers will also be printed in the annual diamond catalog.

This catalog is also available for customers by filling out a request form that is available through the website, free of charge.

3.3 Sourcing

RBR has an already long-term relationship with several diamond cutters in the world, such as Levy Diamond Cutters Inc. (Israel),  and Schumacher Diamond Cutters Inc. (Antwerp, Belgium). The relationship of RBR and these diamond cutters is traced back to the owner’s father, who has purchased loose diamonds directly from these sources since 1970.

3.4 Future Products

As the company expands, it requires a new product category to increase its sales volume. Other players in the game (Diamonds.com and BlueNile) have been enjoying the growth of its popular trinkets sales, in addition to setting sales. Although RBR has been focusing on loose diamonds in the past three years, the company now realizes the importance of variety and options. Customers want not only an excellent quality of diamond but an extraordinary design setting for themselves and their loved ones.

3.5 Technology

RBR uses a hybrid of traditional brick-and-mortar with Internet connectivity, utilizing local jewelry stores to participate in leveraging the “high touch” aspects of diamond shopping.The technology model is quite simple. An eye-catching front-end, to capture the attention of the customers, and logistics back-end to expedite the delivery of the merchandise to our network of local jewelers in the area.

How does it work? For example, one customer is interested in seeing and examining a diamond for an engagement ring. After selecting up to two diamonds and setting up an appointment with a jeweler, merchandise is then shipped within 24 hours (if the order was placed before the cut-off time of 4 PM). RBR notifies the jeweler via e-mail for an appointment. Sales will be made on the spot.

This dynamic relationship of course does not come easily, although it is true that local jewelers basically have less risk or maybe no risk compared to RBR in building the partnerships. In our city, there is only one jeweler who currently participates in the RBR’s program. In the greater local area, there are only four jewelers who participate.

Location selection is another problem that needs to be solved by the strategic decision-makers at RBR. In our city, the participating jeweler is located far from the classic downtown area where most of the upscale jewelers are located. Again, the scarcity of jewelers that are willing to participate in the program is the main reason. To increase RBR’s strategic infrastructure business, it needs to continue adding local jewelers into its selection, within the main shopping vicinity, not outside.