Many jewelry store owners gamble on their Vegas jewelry purchases to be hot sellers at Christmas. For T Lee, owner of T Lee Custom Designer Jewelry, the AGTA Tucson Gem Show is a safer bet. The odds of increasing custom work throughout the year favor the Minneapolis, MN-based jewelry designer/retail store owner when she and her staff contact the store’s top customer lists to pre-sell the annual gem show.
T held her first Tucson Preview Event last year. After fine-tuning the particulars and logistics of the event, T and her store manager Nate Smith have hit on a winning formula for buying loose colored gemstones at the Tucson gem shows. The Tucson Preview Event has proven to increase her store’s custom jewelry work (the lifeblood of her store), generates customer interest in colored stones, and builds the store’s inventory of loose colored gems.
The idea of pre-selling a buying trip came to T in 2010 when she decided to pursue a career goal of buying gemstone rough in Africa, then faceting and polishing the rough and making custom jewelry. Pre-selling the trip to Africa had many dynamics to it that made it risk-free for T’s 20 clients that invested $500. Upon return from Africa T held the Africa Preview Event, an exclusive event for the 20 investors only, where they were the first to see and have an opportunity to buy the freshly faceted African gems. If the investor didn’t find a stone at the event their $500 was returned and applied toward a store credit or a current custom jewelry project.
T occasionally pitched the investment as a $500 “micro-loan” from clients to finance the trip to Africa, which was paid back at the event. And, of course, the ideal situation was working with a customer from gemstone rough to finished custom piece.
In late 2013, T had the idea to apply the basic principles of the 2011 African Gem Rough Journey to pre-selling her February 2014 buying trip to Tucson for finished loose colored stones. From the experience gained designing the Africa Preview Event, T and Nate easily figured out how to make the Tucson Preview Event profitable and even more fun for the clients to attend.
Here’s how they gather investors. Twenty clients are asked if they are interested in joining the TPE investment group. T and Nate have built a list of special incentives into the event for the investor only, including; 20 percent discount off any gems they choose that night, $100 of diamonds for each custom design set up at the event, $100 off their next year’s investment for the TPE if paid that night, and an opportunity to buy from the special “Day Old Gems” case.
Customers are interested in purchasing not only faceted gemstones but other items of interest that can only be sourced at the Tucson gem shows, such as copper “slag” bowels with brilliant patina, exceptional agate “pinch” bowels and exotic mineral specimens. The goal is to have new items each year to make investing in the next year’s trip a no-brainer.
With $500 from 20 customers, Nate and T go to Tucson looking for deals. One way to do this is buying with cash. And, if cash deals don’t work out, using a credit card has its advantages.
“We’ve found that when paying with cash, gem dealers will negotiate discounts from 5 to 10 percent,” says Nate. “And, if we purchase several items from one dealer we can negotiate a better price. If they don’t give us any incentive to use our cash we use a credit card to accumulate frequent flyer miles to pay for the tickets to Tucson.”
To keep a lid on logistics, Nate inventories each day’s show purchases on a spreadsheet. This allows the Tucson twosome to accurately track each purchase and avoid going over budget. This daily update helps them more strategically balance the diversity of the Tucson Preview Event inventory mix.
Customer contact via in store visits, e-mail, and personal phone calls from the duo has built up excitement for the upcoming Tucson Preview Event held within two weeks of the Tucson gem show. Their store/studio has approximately 900 square feet of showroom space, making 20 customers plus staff the perfect sized party.
Here’s how they throw a Tucson Preview Event party. Upon arrival, clients are given a Gem Report price list, draw their lottery numbers for each case, and snack while they preview for an hour. To keep the evening’s focus on gemstones, the normal store inventory is replaced in each of the store’s display cases with items purchased in Tucson. Each showcase is assigned a number and the client’s corresponding lottery numbers determine the pick order for each case. During the first hour they can touch the gems they have interest in, prioritize their picks and socialize.
As the second hour begins, clients are seated and the lottery for case one begins. Nate emcees the event. He will call out customer names and their numbers asking the party attendee to “pick or pass?” In this manner it continues up to lottery number 20 before moving onto case two. Included in the introductory welcome speech, Nate requests that clients commit to any picks during the lottery out of respect to clients with lower lottery numbers.
After the final case lottery, the third hour is the “Open to Buy” portion of the evening. If a client passed on selecting a gemstone during the lottery, they still have the option to purchase it if that stone is still available. Also, they can shop the “Day Old Gems” case which are items left over from the previous year’s Tucson Preview Event offered at savings of up to 70 percent.
After all selections have been made, the client brings their tray of treasures to the cash wrap for their purchase. At that time the staff reminds them about the two $100 incentives for booking their design appointment or prepaying next year’s Tucson Preview Event investment.
“They’re going to do the custom work at some point and already looking forward to next year’s event,” says T. “Why wouldn’t they take advantage of these incentives? We don’t have to talk anyone into saving $200.”
“Customers that know our store and know our events, especially the Gemstone Roundtable regulars, love the Tucson Preview Event,” says Nate. “For our customers that have been collecting T’s work for years, it’s a fun and novel event. For our new clients it’s a great introduction to the colored gemstone world and our custom work.”
For T, it’s a creative customer event that adds to the jewelry buying experience at her store while fostering relationships, but it is also a lucrative way to cost-effectively add colored stone inventory at very little direct cost to the store.
T and Nate suggest retailers looking to run such an event should tap into their top custom and color customers as well as their store’s leading customer list. If retailers are interested in hosting their own Tucson Preview Event, they have franchised a turnkey program as a service to help ensure the success of the event at your store. They can be contacted via e-mail at email@example.com.