A Diamond May Not Be Forever
Anne Johnson is part social worker, part diamond broker and part blogger. As the Managing Director of MJ Gabel she is responsible for growing the business and writes about the diamond industry, trends, and inside secrets. At just 26 she handles clients looking to part with precious diamonds and works to find buyers across the globe. We say down with Anne to talk about her business, the challenges she faces and her tactics to find new customers.
Interview Transcript
Russ: We are here with Ann Johnson. Ann is part of the MJ Gabel Company, which are diamond specialists out of the upstate New York area. We are going to talk to her a little bit about the diamond buying business and working as a small business and talk to her about the economy and how things are going.
Ann thank you for joining us and welcome to Big Awards Sync.
Ann: Thank you Russ for having me.
Russ: Absolutely! Tell me a little bit about MJ Gabel and your role there.
Ann: Sure. At MJ Gabel, I am one of the Managing Directors here. Our company specializes in purchasing diamonds in a variety of forms: old engagement rings, old jewelry. There aren’t that many outlets for people to sell these pieces in the industry. We started this business in order to help those people who are looking for an outlet. Just really can't find a good price or have been unsatisfied elsewhere.
Russ: It's an interesting market you've got, especially during kind of the economic down turn. I imagine this is a similar explosive growth as the gold movement. Has the economy driven for your business? Has it actually been helping your business?
Ann: I think it has a little bit. I think the other thing that's helping our business, in kind of an unfortunate manner, is the divorce rate in this country and the amount of breakups that we tend to see, broken engagements, divorces like I said.
A diamond symbolizes that connection and that love and when that's broken, people have this pieces and their not sure what to do with them. Sometimes, people have held onto them for many years. Now, in this economic climate, people are finding well it's just sitting here, I might as well see what I can get for it. I think most people sometimes are surprised at the value that you can pull back out of the piece.
Russ: How did MJ Gabel get started? I mean, what was the evolution? How do you guys decided to go out and build this new company?
Ann: Absolutely! My partner used to work in the Mergers and Acquisitions Business and he used to trade large parcels of diamonds. He then, kind of, switched gears in working in single stones, which are just obviously the single diamonds in up of themselves. We both happen to be products of broken relationships and had diamonds that we didn't know what to do with it. We work any fair prices. We ended up selling them each for very little. We realizes that there is a place in this market for people to sell diamonds and that place needed to be filled by a company. That's how we came to be.
Russ: What are the other or traditional outlets that companies or people might go to? How are you guys different?
Ann: Sure. Most times, people go to a jeweler first. Thinking this is where I bought the piece. It would be logical that the jeweler then would purchase it back. Then we also see them going to traditional private sale groups such as Craigslist or Ebay. The main problem when going back to a jeweler is jewelers tend to not purchase diamonds back because they don't want to disclose the markup that was made on the original sell.
Let's use round numbers. If you purchase the diamond engagement ring for $10,000 and you walk back into their store and said, "I want you to purchase this back. How much do you give me?" They give you a number, say 4,000. You would look at them like they were nuts because of that increase mark up. They don't like to disclose those numbers, so most tend to not purchase stones back.
Then people tend to go to the private route, Craigslist, Ebay. Craigslist is bombarded with spam these days. Send your ring to a, my cousin in Nigeria. Give you my PayPal account, I mean lots and lots of scams. Then you also have to find someone who loves the ring as much as you do and has the cash liquidity to spend on it. Again, when you purchase a ring, retail originally you can finance it, you can almost get a mortgage on it If you needed to.
There are some boundaries that people have to overcome and get through to sell the piece. It can be a tough journey and that's where we like to come in and offer our services to people to make it an easy transaction.
Russ: You're getting this rings at a fair rate and then what are you doing in return? Are you back out selling those rings? Are you selling them wholesale? How are you guys doing on the sales side?
Ann: Yup! What we do is we actually recirculate the diamonds back into the industry. It's not like, a person would sell us their ring and then two weeks later they'd see it in our showcase, for example. We don't do that.
The pieces are reused, circulated back into the trade. If it's unpurchased, an outright purchase from a client that's what we do. We use our resources, lot of them are outside of this country. There's some big diamond markets in Israel, in Belgium, we utilize those. As an alternative, we also offer brokering service for clients because sometimes it's not a situation where I just purchase it from you. I may guide you to a different source and just broker that transaction to make it smooth for you.
Russ: It seems like you guys are heavy online, what sort of marketing outreach are you doing and what did you found to be successful?
Ann: A lot of it is word of mouth. We strive for very high customer satisfaction. In return, most of our customers kind of pass that word on. If they have a girlfriends that may be just got divorced or knows that they have a ring that they aren't using. But we have to keep in mind that the timing for this is different for everybody. While most people have gold that they can sell, not everybody has a diamond ring for example. It's a life changing event typically. Everybody's timing is different. That's why word of mouth helps us the most. We reach out to some people locally and say, "Hey we're here! If you need us." A lot of its organic searches. People are just finding us organically through the internet. Submitting a form to us and we got on the phone and have a real conversation with them about what they have.
Russ: You're bridging that kind of digital gap and personal gap with the actual human interaction which is..
Ann: We're trying to! Yes, I believe you're not to know is the hardest thing to get somebody on the phone but once you get them on the phone, I think it brings it back into a personal level that we are people. We're a serious company and we strive for that satisfaction.
Russ: It's interesting. I once heard a statistic that, I think it's, you lose, was it, after five minutes of submitting something online, the ability to connect with that prospect goes down like a 100% or something. It's something crazy.
Ann: Yes and that's why, the minute someone submits a form, it gets forwarded to inform our customer service department to one of our representatives. We can at least try and get them on the phone within that same day. If not within a short amount of time, hopefully within an hour. It's usually our goal.
Russ: What are your obstacles of growth? Is it finding new prospects? Is it selling diamonds? What are your barriers right now?
Ann: What are our barriers right now? I think that one of our barriers right now is just finding people at the right time that they're ready to sell their ring. I think that's the hardest thing. I mean, we could blank it in advertising but it wouldn't necessarily make a difference to a lot of people because, again, it is a life changing event. It happens specifically at a time per person and they may not be ready to sell their ring right when they had their breakup. It may be years down the road. That's our biggest obstacle is reaching out to people at the time that they need us. Not necessarily just reaching everybody. However, everybody could be a potential client. It's kind of a balance for us, I think.
That's one of the barriers that we're facing is how to reach people at the right time but then it's also a kind of put a bug in their ear it in a couple of years they’re in that kind of a situation. Not that we want them to be. The reality of this country is, we do have a very high breakup rate and divorce rate unfortunately.
Russ: It sounds like Israel and Denmark have a lower breakup rate.
Ann: I don't know if that's true or maybe they. I don't know what the situation is over there but maybe we do need to mimic some of their styles.
Russ: That's great! When you're not pouring over the diamond trade and looking for new prospects and talking to customers, how do you wind down?
Ann: I have two dogs. I have a boxer and I have a black lab. They keep me busy for now until I have once I'm two feet running around. We love the outdoors, spending time outside. I really take time away. It's coming up memorial day weekend, we're going to the Thousand Islands but I guarantee you, it will still be work. It's mixing work and play for us right now while we're building our business. We try and pull away when we can but you really never pull away fully from it.
Russ: Yes! I know the feeling. Ann I really appreciate you joining us today on the Big Awards Sync. We wish you all the success in the world and really do appreciate you joining us this morning for brief discussion.
Ann: Yes! Thank you Russ very much for having us. I really appreciate it.
Russ: This is been Russ Fordyce and Ann Johnson from MJ Gabel. Ann is a diamond specialist and I guess a recovery specialist, we might say so.
Thanks Ann for joining us and we'll see you next time!