I have made my living as a rough diamond gemologist for a long time. It used to be that my job involved verifying that the stones I examine are real, evaluating them and then making a manifest for the buyer or the seller. Sometimes my duties would involve defending or attacking the grading of the raw diamonds at Table Top Meetings (TTM). In addition, I often helped in negotiations between buyer and seller. Life was pretty simple.
In those days, clients were all connected to the jewelry industry in one way or another. This made much of the business somewhat simpler. Today, many of my clients are not in the jewelry or diamond business at all. Some are speculators; others are hedge funds managers, bankers, adventurers, and of course brokers.
For me, this is a good thing because I have a greater number of potential clients. No one can complain when their customer base is expanding. However, it also means that the people hiring me are often inexperienced in the diamond industry. Because of this, I found it necessary to help educate my customers to the reality of working with rough diamonds. At first it was my intention to educate my customers and potential clients in order to help them succeed. Lest you think me altruistic, remove the thought from your mind, the better my clients fare, the more money I make.
I wrote extensively on the process, problems, possibilities and potential in the diamond trade. However, over time, my attitude changed. I realized that most people who want to hire me not only do not know enough about diamonds, they also do not know how to qualify the buyer, or if a buyer, the seller. They do not know how to do the banking or the shipping safely. They do not know how to work with the Ministry of Mines, or how to import the goods legally and properly into their destination country. In short, most people who wanted to work in the raw uncut diamond industry were most likely going to fail.
It isn’t that these people are not smart, astute business people. On the contrary, they are very smart, highly educated and have plenty of business experience. How else do you think they were put into a position to spend millions buying diamonds? No, the problem is that they do not understand that in order to be successful in a business where trust is in extremely short supply, you must eliminate the risk of failure for both the buyer and the seller.
Some experienced buyers come to realize that if you want a consistent, well priced supply of rough diamonds, you have to buy at the source. To do so is extremely difficult because you have to have the right supply connections, and you have to really understand banking in Africa. You must know how to overcome the inherent risks that African banking creates for the inexperienced. In addition, when you work in the Ministry of Mines and with shipping companies in Africa, you had better know what the hell you are doing. Buying the rough at the right price is always difficult, but if you do not have your act together with the banking and other aspects of this business, it will not matter how well you buy. Just in case you wondered, no, you cannot get this experience in your office; you have to be there in Africa.
I am very experienced and know what I am doing. Still, despite all my connections, skills and knowledge, it still takes me weeks to put together a buying trip to Africa. Why? Because every time you go to Africa, you have to verify everything again and then you have to verify what you have verified!
Currently, I have been hired by two hedge funds, and a German jewelry manufacturer. I am leaving shortly for Guinea, Sierra Leone and Tanzania. We have just about finished putting the icing on the cake. We are ready to go. But now things are different. I am no longer just a gemologist, now I am a diamond source, a banker, a shipper, a travel agent, a government -go-between and a body guard. I take on these tasks because I have too. Unless I do, I have to rely on my client’s experience and verification abilities in Africa. I did this in the past, and found myself in a dark alley with five guys in Angola, and twice I barely escaped being kidnapped in West Africa. When I do the verification, I know I am safe and the customer and his money are secure. I cannot be just a gemologist anymore if I want to be safe and succeed in this business. See you when I get back!
Louis Pearl G.G.
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