Diamond trading is not much different from commodity trading. Only in this case, the product is diamonds. Your role is to buy and distribute the gemstones to make a profit. The avenues for entering the business are many.
You can work for diamond mining companies or distribution firms. That, in essence, makes your broker. You can also go into employment in an investment company. Being a trader does not confine you to dealing with rough diamonds. Some firms will use your services to distribute finished diamonds.
Depending on how good you are at your craft, you can earn anywhere from $60,000 per year. Top earners can hit anywhere from $118000. The tip to success is knowing how to go about the diamond trade.
Learn About Diamonds
Passion for diamonds is not good enough to make you successful in the industry. You must take the time to understand every aspect of the trade. You will need to get familiar with some terms. These include sorting, evaluation, and trading techniques.
Can you, for example, tell the difference between pure diamonds and synthetic ones? Are you able to explain the most critical diamond attributes of carat, clarity, color, or diamond cuts? What kind of advice can you give clients on lab-grown versus mined diamonds?
Indeed there is a lot to learn, so get ready for plenty of reading and research. Enroll for online all offline courses for a more in-depth understanding of diamonds.
A Grasp of the Market Is Crucial
The same applies to the market. Do a proper market analysis to get an idea of how the current situation is. Look at the level of competition, and learn what you can from the competitors.
Teach yourself things like cost estimations, market fluctuations, and cost-benefit analysis. Other areas of interest are supply and demand, relevant technologies, and labor costs.
Take time to uncover the opportunities and risks and the diamond business. They are plentiful, including fake lab reports, credit risks, and improper documentation. Identifying and correcting such issues early can save you a lot.
Customers also want the comfort of knowing they are buying certified, genuine products. Over time you will build your profile as a trustworthy diamond trader.
Determine the Best Diamond Sources
If you want to build a reputation within the industry, find the right diamond sources. The reputation of whoever you are buying from is critical. Even if you choose to go to the source, please do proper research.
Only deal with those with a good reputation in trust, security, and quality of the product. Develop relationships with them to learn more about the business and its operations.
Finally, go the extra mile of reading customer reviews. Indeed, ask for references and do not shy away from calling them up.
Build Solid Networks
The diamond industry is very close-knit. You will go a long way if you establish the right connections. The very act of buying raw diamonds can be tricky if the sellers do not know you. They may not even be willing to transact. This is an industry where reputation is the key currency.
Those in the game are very protective of the reputation they have built over the years. Indeed, gaining entry is very much like joining an elitist club. It doesn’t hurt to have someone who then opens the door for you. Reach out to those in the business and introduce yourself to them.
Industry bodies like the gemstone associations can be another entry point. They host networking events and can even provide contact to other traders. It may take time, but you will see the benefits in the long run.
Another advantage of networking is the building of a strategic partnership. A lot of business referrals can come from within. You may not stock emeralds but can refer such business to an associate. That is the best way to establish reciprocal relationships.
Have the Right Business Model
Even if you identify a niche, you still need to have the right business model. Start by identifying the role you want to have as a diamond trader. Brokers, for example, sell on behalf of another company. It means you may not even need to handle the commodity. This frees you from having to put up a secure infrastructure to get the diamonds.
The other option is to buy from the mining companies and sell to other parties. In deciding the right business model, take a look at the competitors. See what they have in their offering and do it better.
Decide on the platforms you will use for the business as well. The modern environment demands that you have an online presence. The advantage is you can combine this with the brick-and-mortar store.
Further, the opportunity to reach broad audience bases and build visibility are many. The trick lies in finding and utilizing the right platforms. A website, for instance, is the first step. Other platforms are social media, email marketing, content marketing, and PPC advertising. Indeed tons of publicity platforms, both free and paid, exist in the online space.
Work on solid marketing strategies based on your understanding of the target market. You may have, for example, noticed a gap in the availability of low-cost diamonds. It allows you to go into the distribution of lab-grown diamonds. Such stones have the brilliance, grading, and certification of natural diamonds. But, the production process makes them cheaper than the original ones.
Being a diamond trader requires patience, willingness to learn, and resilience. It is a niche segment catering to very specific groups or individuals. That in itself can make it difficult to rise above the competition.
But with some of the ideas, we have shared, you can be quite successful. Understand that reputation is everything in the diamond industry. Anything that puts a strain on it will be the death knell of your business.
Learn the market, suppliers, and product. Customers depend on you to give them information about high-value products. They also place absolute trust in whatever you say. So, take your time to hone your trade, build the right networks and keep improving.