GN Diamond boasts an exclusive clientele – namely independent retailers. By dealing only with independents, the diamond wholesaler has created a loyalty-based success story, drawing some 3,500 clients into the fold.
With the company picking up 15 to 20 new clients every couple of days, GN Diamond bills itself as “The Fastest Growing Diamond Company in America.”
“Our company started in Israel, and we have been cutting and polishing diamonds for 45 years,” says Asaf Herskovitz, president of GN Diamond. “Every two weeks, my father (Zvi) and his partner would come over to sell to other wholesalers, two or three in every major city in America.
“When I took over the business 11 years ago, I saw the world changing very, very quickly, and I saw that some of the longtime customers of my father and his partner in Israel were not managing their businesses very well. I saw a world changing, and that they weren’t going to be around in the future.
“It’s proved to be true. A lot of the guys we sold to are not in the wholesale business anymore. We wanted to build long-term relationships we could be proud of 20, 30, 40 years down the road. That’s why we chose only to do business with independents. And we’ve been very loyal to independents.
“What we wanted were long-term relationships that we could be loyal to, and vice versa. We wanted to have those relationships with independents. No chains, no Internet. We’ve turned down the Internet sites eight times. Even though we had millions and millions of dollars on the table in the last couple of offers, we said, ‘You just don’t get it. You compete against all of our independents.’ And in 11 years, we grew into probably the No. 1 loose-diamond wholesaler for independents in the country.
“We talk to 1,500 jewelers every single day. It’s been wonderful. We’re a different kind of animal. We’re open seven days a week – enough of our clients are in malls and open on Sunday. And Saturday tends to be all of the retailers’ busiest day.”
GN Diamond, with $60 million in inventory including loose diamonds and finished pieces, strives to boost the bottom line of its customers with marketing and advertising strategies.
“We were the first company to create websites for jewelers; that was 10 years ago,” Mr. Herskovitz says. “We saw the Internet was going to be a factor – and so we created jewelry websites.
“Now, we’ve developed even more with our own marketing company within. We’re reinventing the wheel. We’re investing lots of money in market research. We’re putting a lot of energy into propelling our clients forward, grabbing more market share.
“We create marketing for them. We do this with catalogs, billboards, postcards and radio ads. By investing in market research for independents, we’re giving them tools like the chains have. More and more people are taking advantage of our services every single day.
“There are lots of smart independents out there who are taking advantage of the fact that we’re spending hundreds of thousands of dollars on these tools to help them. A lot of our client base is using it.”
GN Diamond now has about 30 employees, including sales representatives in Colorado and Minnesota. But the one major, 8,000-square-foot office is in Philadelphia.
“We’ve found that under one roof, sharing the same passion for our business, we do better in catering to clients with quality control and customer service,” says Mr. Herskovitz. “We’re stronger with our employees under one roof in Philadelphia.”
The company’s 3,500 clients range from $300,000-a-year stores to the biggest players in the country, Mr. Herskovitz says.
“It’s not just about selling to the retailers, but making sure their businesses are healthy with inventory,” he adds.
“Besides loose diamonds, we’re a one-stop shop. We have a recession-proof bridal line; we have one-of-a-kind pieces; we have diamond studs, three-stone rings and fancy yellows. We’re a little bit of everything. In the diamond arena, we offer a lot of different things to be more important to our clients.
“For first-time bridal… we created a line that was $250 to $700 wholesale. That’s a price point that even a first-time bridal customer could hit. We hit certain budgets not just by being a wholesaler, but by being an economist. By saying, OK, what does the average person in a particular area make? You know, a certain percentage of income is going to gas and food. There’s a sweet spot that has dropped with this recession, and we hit those budgets, and we try to show jewelry stores how to cater to those new budgets.
“There’s new competition. The world has changed so much; 10 years ago a jewelry store did not compete against stores like BJ’s and Costco. You also have to hit that.
“We call ours a recession-proof bridal line because it hits a certain price point. They’re beautiful styles, fast-selling merchandise. Then we have one-of-a-kind pieces where we use two craftsman jewelers making one-of-a-kind pieces from $2,000 to a $10,000 setting, wholesale.”
Mr. Herskovitz sees bright days ahead for his company as he intends to stay true to the independents. “We have competition, but we believe we have an advantage against the competition through not just resources and finances, but in the way we conduct ourselves with our jewelers. That’s how we have grabbed so much market share in 11 years, and it’s creeping up. We also focus on what we’re not doing right and improve everything from customer service to marketing.
“We’re definitely doing something right, judging by the relationships that have grown in our customer bases. They’ve given us an opportunity we don’t take for granted.”