October 2020 - Lab Grown Magazine

October 2020 | The Lab Grown Diamond Resource Book 20 To advertise call (888) 832-1109 | October 2020 21 By Jerry Taylor LAB-GR WN L ast year at this time, as we geared up for the holiday season, we could never have expected what would meet us as an industry starting early 2020. Coronavirus shut many of us down in the first quarter of the year and social distancing measures and government mandates have changed the buying landscape for end consumers in drastic ways. Even now, as we prepare for the upcoming holiday season,a certain level of unknown is ever- present and many of us are looking for innovative ways to revive our business and increase profit margins and customer satisfaction. If you’re a jeweler who has been on the fence regarding lab grown diamonds, I have three reasons why now is the perfect time for you to start selling them. Reason #1 - Many customers now have smaller budgets. Consumer spending is down and many jewelers report that customers are spending less than they did at this time last year. This is understandable due to the economic chaos and uncertainty that Covid-19 has caused. Yet, customers who have smaller budgets still want to get as big and as nice a diamond as they can. Lab-grown diamonds accommodate this desire very nicely. Even if a customer doesn’t ask to see lab- grown diamonds (many still don’t know what they are), you can show a bigger LGD next to a mined diamond of the same price so they can compare and decide what they prefer. Not every customer will choose the larger lab-grown diamond, but some will. Below, let’s look at why that is advantageous to both the customer and the jeweler. Reason #2 - Many customers are more conscious of environmental issues and are open to mine-free options when given a choice. The current pandemic has forced the world to take pause and reflect on the biggest problems facing humanity and our planet. Consumers, especially Millennials, are interested in products that have as little environmental impact as possible. For that reason, many jewelers report that customers respond very well to the idea of buying a mine-free diamond. Instead of selling moissanite or lab-created sapphire to this type of customer, you can sell a lab-grown diamond that yields much higher revenue and profits. DIAM NDS NOW is the Time to S tart $ elling Reason #3 3 - Profit margins are higher wh n selling lab-grown diamonds. To say it’s been tough the last several months is the understatement of the century. Online competition is becoming more and more fierce; brick-and-mortar competitors may be willing to discount more just to keep inventory moving; and on top of that, gold prices are higher than they’ve been in many years. Lab-grown diamonds present quite a unique opportunity to increase profit margins. Many jewelers report profit margin increases as high as 50% when selling LGDs compared to mined diamonds of the same price. Many believe that offering LGDs will decrease total revenue because customers can spend less on lab-grown diamonds of the same size and quality as the mined diamond they’re considering. But this is the wrong way to present lab-grown diamonds as an option to your customer. This is really important. When showing lab grown diamonds as an option for your customers to consider, keep their budget the same. If you’ve been showing mined diamonds that are $5000, show lab-grown diamonds that are also $5000. Don’t show the same size LGD for less money. It’s much more appealing to a customer to see a larger, nicer diamond that is the same price as the one they just looked at. Who wouldn’t want that? Spend the time necessary to fully disclose and educate your customer regarding the origin differences between lab-grown and mined diamonds. When presented with this type of choice, your bottom line will benefit when your customers choose lab grown. And if they don’t, they’ll appreciate that you gave them a choice and spent the time to educate them. If your customer chooses the lab-grown diamond option, they’ll be ecstatic because they now have a 1.73-carat diamond instead of a 1.00-carat, and you just added an additional $580 profit to your bottom line. Now imagine doing that five times a month. Over the course of one year, you will have added $34,800 additional profit to your bottom line. When you truly consider the numbers, combined with the positive customer response, it’s hard to make an argument against offering LGDs as an option to your customers. In summary, lab-grown diamonds present a unique opportunity for jewelers who are looking to rebound from the negative economic impact of Covid-19.Get ahead of your competitors who still aren’t offering this exciting new product and enjoy the benefits of meeting this ever-growing demand. Mined Diamond Option 1.00 Carat, I Color, VS2, Excellent Cut, GIA $3492 total cost (listed on VDB) $500 solitaire $1000 markup added to the diamond $4992 total sales price Lab-Grown Diamond Option 1.73 Carat, H Color, VS1, Ideal Cut, IGI $2912 total cost (listed on Lab Grown Source) $500 solitaire $1580 markup added to the diamond $4992 total sales price Below is the profit breakdown for the $5000 budget scenario discussed earlier. Jerry Taylor is CEO of Lab Grown Source and COO of Taylor Custom Rings. Lab Grown Source is a trading platform that gives jewelers free access to all the major lab-grown diamond suppliers’ inventory in one convenient place. Taylor Custom Rings is a custom ring business that focuses on selling lab-grown diamonds and custom engagement rings. ( labgrownsource.com, taylorcustomrings.com )