I am a gemologist with nearly 39 years in the diamond business. For most of my career I worked with experienced diamond and jewelry people. In the last few years I began my website and joined LinkedIn, Facebook, Twitter, and Google+ to promote my business and to educate. I belong to as many groups as are allowed on LinkedIn and have found joining these sites and utilizing LinkedIn and the other social media sites have really helped promote my website and helped my business. Each day I have several inquiries from miners, buyers and brokers who wish to sell, buy or broker rough diamonds.
This is a real blessing because I have increased my business and my income. However, as any philosopher will tell you, every blessing has a cost. Today many people with little or no knowledge and or experience aspire to buy, sell and broker rough diamonds. Many work with other commodities, some are investment fund managers; others enter from the real estate business. There are even some lawyers and doctors who want to try their hand in the game.
The vast majority of these people are well educated, and have excelled in their own professions. Because of this, they believe they have the business experience and intelligence to succeed in the rough diamond business. For some, this is certainly true. Nevertheless, it is my experience that most cannot possibly succeed because they have educated themselves on misinformation, lies and exaggerations.
Few people will spend the time and money necessary to do their homework. Often, many simply do not know the questions that must be asked, never mind the answers. Every day buyers who do not have a clue on how to source, conduct and close a diamond deal will call me up looking to spend millions of dollars. Sometimes it is their own money, often; the money is entrusted to them. They sincerely believe they have completed their research and “know what they are doing.” I am truly amazed at the misinformation that abounds. Much of the problem is just plain, simple ignorance... Ignorance is like a poison, the effect of ignorance is blindness to reality. I am not saying these people are dumb, far from it. What I am saying is ignorance can afflict even the most intelligent among us. The question is whether or not you can overcome your ignorance. Many cannot see that their procedures cannot possibly create a steady supply of rough. True, some get lucky and actually source a reliable and consistent supply, but most just waste time, energy and money. The same holds true for sellers and brokers. Once again, it is ignorance that destroys all chance of success. However, sellers have a better chance to succeed even if they are ignorant, because currently, there are more buyers than sellers.
People are very frustrated and mistrust is prevalent. Buyers and sellers think most brokers are not the brightest bulbs in the pack. Buyers believe most sellers have no clue on how to conduct business outside of Africa. Sellers cannot understand how people who are smart enough to have a lot of money think they can buy diamonds sitting on their computers in Geneva, New York, Hong Kong etc. Brokers believe that both buyers and sellers are out to screw them in any way possible. All these views are often correct, and yet sadly, unnecessary.
I hear this so much that I wrote the following quote just so I would not have to repeat myself every day. It is in response to buyers who want to buy it 'their way’ and sellers who want to sell it 'their way.' I hope it will be of some benefit.
"Dear Sir: Thank you for this opportunity. With all due respect, there are 10,000 companies like yours. Most buyers have succeeded in removing the risks for themselves, but do nothing to eliminate the risks for a real seller. A real seller must mine or source the goods in Africa, or other source country.. He must pay the license fees, taxes, exporter, commissions, shipping, travel, hotel, meals, ground transportation, insurance and pay for the use of the Brink’s office in the hope that you show up and actually buy his diamonds.
Yes, you have POF, but that only shows you have the money. If the seller is real, he has experience and therefore established customers. When he goes to established customers, he has eliminated most of his risk and will do so rather than go to an unknown even if he thinks he may make a little more.
When a real seller tries to sell to you after he has spent all this money he may suffer great losses if you fail to buy. You do nothing to relieve his fears and therefore are not an attractive alternative. Only when you eliminate the risks for buyer and seller can you hope to succeed on a regular basis. I am not saying you cannot buy at Brinks. No, what I am saying is that it will be hit and miss with a lot of misses. To buy properly and monthly you have to go to the source. I can help you there. If you actually find diamonds at Brink’s I can help you there too. That being said, there are few and far between real sellers who will do it your way. The only times I have seen goods being offered this way is when a previous buyer failed and the seller had to scramble to find another buyer.
The buyer does not care about the seller’s risks and concerns. Nor does the seller give a damn about the buyer and his risks and concerns. The seller says; "I have the goods, let him to do it my way." The buyer says; "I have the money, let him do it my way." The broker sits on the side and cries.
In reality, the market dictates who must concede. Right now there are more buyers than sellers. The only two reliable sources currently are Sierra Leone and Zimbabwe. Both have their advantages and disadvantages. However, in both situations the buyer must go to Africa.
There is professional help available in both countries. Zim is not for American buyers unless they are prepared to open a company in Dubai. I have posted an article on Zimbabwe diamonds on my website. In this article I outline the truth of buying in Zim. If like me, you are extremely well connected there, and can overcome all the obstacles of buying diamonds in Zim, then you can do quite well. However you must understand the nature of diamonds that are coated which are inherent and prevalent on Zim goods. If you know how to buy coated diamonds, then you will find that you can buy large quantities of diamonds in Zimbabwe.
In Sierra Leone there is no such thing as a single supplier (who is not already contracted) or a guaranteed monthly source. You must go there each month and sit for a week or more, gathering goods in Kono or Kenema. Anyone who says otherwise has either never worked in SL or is lying.
You can buy regularly in SL but only about $500,-$1M at a time. This is the truth sir. The DRC is a basket case right now, as is C.A.R. Liberia is small goods, Guinea is unreliable and dangerous to go to the mines. Namibia and Botswana are controlled by DeBeers; South Africa is on the tender system, Rio Tinto controls Australia, Canada is contracted fully, Russia and Angola are impossible. Brazil is mostly poor quality and fine stones that are priced properly never get past the locals. Do you really want me to go on?
If you want quantity at the right price, you must work in Zim. However, if you do not understand coated stones you will not be able to do business. You can be successful if you are willing to take this seriously and follow the process and do the work that is necessary. That being said, if you think you can act like the 10,000 companies I spoke to you about, then you will never succeed in getting a reliable, repeatable source”
I am not here to tell you how to do your business. I am simply trying to help you succeed by sharing nearly 39 years of experience in the diamond business with you. I have said it before, and I will say it once again. If you do not remove the risks for the buyer, and for the seller, the chances of you closing a rough diamond deal are very, very small. Verify what you have been told, do your due diligence and learn what the questions are before you throw away your money. If you do not know, or do not understand the questions, how will you know if the answers you are given are correct? If after your research, you are still unsure, and afraid, call a rough diamond gemologist who not only knows and understands the questions, but who also knows the answers.
Louis Pearl G.G.
Click 'All' to view every article