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Martin Rapaport On Prices And Profits In A Changing World; Plus Exclusive Video Interview |  February 13, 2014 (0 comments)


Scottsdale, AZ—Diamond industry guru and gadfly Martin Rapaport, left, was the featured breakfast speaker at Centurion Scottsdale on the show’s third and final day, Tuesday, February 4. His talk, titled “Prices And Profits In A Changing World,” centered on the important role the independent jeweler plays in the future of the diamond business, and he offered some essential tips for jewelers to ensure they maintain and grow their share of market against other distribution channels.

“The diamond business isn’t about diamonds, it’s about relationships,” he emphasized. “For example, Centurion; it’s not a show, it’s a community.” Community is important to consumers—it’s the driving force behind social media, and it’s why, although a diamond travels thousands of miles between the mine and the consumer, the last leg of the journey—a mere 18 inches of counter—is the part that matters most.

That, and where the diamond came from. Consumers, he said, are more and more concerned every day about both social and environmental responsibility.

“Human rights and social responsibility are your responsibility. It’s a matter of personal morality,” he stressed. He also chose that moment to make a passionate plea for another pet cause: hiring veterans.

“There are thousands of U.S. service vets coming home from Iraq and Afghanistan. Please! Hire them!” he entreated the audience. Then his attention turned to a topic on everybody’s minds: diamond prices. They’ve gone up sharply, especially rough, and it’s making a lot of people freak out.

“Don’t freak out. It’s not about price, it’s about value,” he said. Prices do eat into profits, but they’re still about relative values and determining what and how much a consumer will buy. “Don’t get suckered into talk about rough prices going up, and don’t sit on inventory hoping it will go up,” he warned.

He used an analogy of a lion, a lamb, and a peacock. In Africa, a lion that sees a Jeep full of tourists won’t bother it, because to the lion the vehicle is the animal, and it knows it can't win. But if you get out, you become an easy target for dinner.

The lion is the mining companies, and it does need to be fed. But, asked Rapaport, what will we feed it? The majors? China?

“China isn’t the answer yet. It will be, but it’s not there yet,” he said, adding that India is a “disaster. I know we talked about India a few years ago, but a lot has changed. Demand globalization isn’t the answer.

The majors are going to be impacted more by across-the-board diamond price hikes than independents, believes Rapaport. “The solution is to strategically define your added value. Distribution isn’t the way to make money, because Amazon will kill you. So what’s your unique selling proposition? What makes you different and special? It’s you. Not your products, you! What do you love? What are you passionate about? The jewelry business is inside you. Go deep inside yourself and find where your passion adds value, and define yourself. You are not a lion. You are not a lamb, you are a peacock!”

Lions, he said, don’t eat peacocks because they choke on the feathers. And that is the secret to thriving.

Watch a video interview with Martin Rapaport here.

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