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Wholesalers in Thailand?
Post#1 @
07-01-01
, 02:20 AM
Any advice on buying from diamond wholesalers in Thailand? The above "Ask Diamond Talk" post was filled out online at http://www.diamondring.com/forums/n...amondq uestion |
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Post#2 @
07-01-01
, 02:41 AM
A victim of fortunate circumstances, maybe? Nevertheless, any and all advice would be very much appreciated in response to my dilemma. I am in the position to obtain stones (Thai wholesale market) at 35% of the Rappaport report. I appreciate that the report does not take into consideration cut, but what other pitfalls should i look out for? As a novice, you will no doubt understand my apprehention to taking advantage of what "seems" to be a good opportunity. Any advice would be most welcome. Thanks. |
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Post#3 @
07-01-01
, 04:21 AM
Are you buying to yourself or are you planning to resell them? It makes a big diffence. S |
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Post#4 @
07-01-01
, 07:05 AM
Sibelius, Thanks for the reply. I'd like to re-sell them, but not get into it full time (if you understand what i mean). I've done a little homework on it. For example a 01 ct. VVS1 "H" is i believe retailed at around U$7500. Obviously, i will not be selling to the "end user". I'd like to sell to other dealers (i.e. stick to margins within the wholesaler market 5-10%). I can aquire stones at around 35-40% of retail price. This simplifies things a lot as there is no need to get GIA certification (U$500+ i believe). Any advice is very much welcome. Thanks. |
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Post#5 @
07-01-01
, 07:27 AM
nickcn- Depending on quality of cut your retail estimate seems rather optimistic. Your buyers will expect lower prices from you if you have no independant labs reports. (GIA certifies nothing or no one) Learn, Learn, Learn. We can't teach you enough from this typing to help you protect yourself. Find your buyers and talk to them before you spend your money. |
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Post#6 @
07-01-01
, 08:03 AM
jbacon, You're insight is very much appreciated, and indeed i have been studying up for the past six months. The retail figure mentioned was merely quoted from a copy of the rappaport report which i recently saw. And i have learnt that the cut is extrememly important. The quality of stones is assured (my close friend, a wholesale dealer in Diamonds/Coloured stones for the past twenty years). He would sell me a 01 ct. VVS1 H Ideal cut for U$4900. I would like then to re-sell to another dealer for a small margin (5-10%). Sounds simple, but after six months of studying i am well aware that it is not. Hence, the reason why i have'nt indulged in this opportunity. You're quite correct jbacon. More studying is necessary i believe. |
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Danger of Thai stones
Post#7 @
07-01-01
, 11:25 AM
I'm surprised that no one has mentioned the imminent danger of that H VVS not being an H VVS1 at all. Who graded it? How do you know it's accurate? What if you try to resell it and a vendor says "this is a J SI2" and throws you out on your coattails? Now you've paid 35% off Rap for an H VVS1 but how much is the Rap price for a J SI2? Even getting an IGI cert from the Thailand lab doesn't guarantee anything. I would think it would be wise to take a course in diamond grading before I'd give any money to the wholesaler and certainly before selling it to a vendor. Either that or send the diamonds to a lab. I certainly wouldn't pay for an H VVS1 unless I knew for darn sure it was an H VVS1 or within one grade of it. Also, it might be a good idea to include decimal points when describing diamond weight. I haven't seen a lot of leading zeros, so a 1 carat would be 1.0 carats or 1.00, and a 01 ct. could easily be misread as a .01 ct which would be worth less than a hundred dollars--or you could refer to points, which puts a 1.0 carat at 100 points and a .01 carat at 1 point. Shelby 
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Rap report
Post#8 @
07-01-01
, 11:30 AM
Also, I believe that Jbacon is calling your retail figure a little ambitious because for the most part, what I've seen is that vendors use the Rap less for determining what their wholesale prices should be but as a selling tool for consumers by showing them the Rap and then taking 10-15% or more off of that to make the consumer feel like they're getting a good deal. I know this is prevalent in the Los Angeles diamond district and have heard this is the M.O. of the New York district as well. So if vendors are discounting off of Rap for consumers and still making a profit, it would seem that they are getting their diamonds at significantly cheaper costs. I would strongly suggest that you visit the New York diamond district posing as a consumer to get a very good idea of how diamonds are sold and what the Rap is used for. I think you're putting far too much trust in the accuracy of the Rap report. I would research that more closely as well--get some actual Rap reports, hit the streets of the diamond districts, and figure out how diamonds are really priced. Although Rap is supposed to be "indicative" of the wholesale market, it doesn't necessarily mean that's what dealers are actually paying for their stones. You need to find out what other wholesalers are actually selling their stones for to determine how to price your own to be competetive. Shelby [Edited by shelbyscout on 07-01-01 at 11:39 AM] |
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I hope you know what you're doing
Post#9 @
07-01-01
, 11:41 AM
I used to work in Asia and have spent weeks at a stretch in Bangkok and environs. The situation you describe sounds an awful lot like a scam that was very popular when I was there. Perhaps things have changed, but the quote below I just got from the Lonely Planet website seems to indicate differently. Keep in mind that in Thailand, the cops won't help you against the mob -- they are the mob. Quote from Lonely Planet (http://www.lonelyplanet.com/letters/sea/tha_pc.htm#Scam): _________________________ ___________ "The current scam in Bangkok is still Gems. They are very elaborate involving taking you to various sites and planting 'strangers' there who will back up the taxi driver's information on the bargains available and *how much you can make selling them at home*. We followed this around out of interest and saw many travellers at the 'government' gem store we were taken to, who were seriously considering buying. *Do not buy stones for profit unless you know what you are doing*." _________________________ ____________ If you are in fact an experienced person in this area, please ignore my starting at shadows John |
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selling to dealers
Post#10 @
07-01-01
, 12:16 PM
I only sell and memo to dealers.I do no retail.If you think that you can buy one stone for 35 under rap and sell to venders.Think again. Most crediable venders, deals with crediable licenced dealers like myself.They may buy a deal off the street ,but want to steal it,as they have no reason to buy from you.We supply our venders with memo.And we give credit. now if you were buying and wanting to sell retail ,different story. jewerlydealersnetwork.com marvin |
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Post#11 @
07-01-01
, 12:39 PM
Hi Marvin, Long time no hear I went to see your www site you provided in your post. Its a good idea to put http://www. into the link, it would be a direct and working link. Now I had to write it, and of course misspelled at first  Interestin site. HAve you any members in Europe? S |
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Post#12 @
07-02-01
, 12:57 AM
Shelby, Many thanks for the words of caution, and also your invaluable research. I still remain a confused Re: the rappaport report. On one hand it is talked of as the "yard stick" for pricing within the industry, but on the other it is constantly flawed with remarks that no consideration for cut etc is included? Regards Nick |
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Post#13 @
07-02-01
, 01:03 AM
Archer/John. A very interesting quote. Thank you. The dangers of Thailand are well known to me (3yrs resident), but your advice is much appreciated. Any opinions on the Bombay Diamond market? Rgds Nick |
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Post#14 @
07-02-01
, 01:15 AM
Nick, I don't know exactly how Rappaport gets his numbers, and since this is his living I'm sure he's not all that up for sharing, but it might help you to think of it this way: Think of the Rap report as a collection of averages. Now you can have three diamonds at 100.00 dollars (poorly cut) and three diamonds at 1000.00 dollars (ideally cut). The average of these 6 diamonds is $550.00, but none of these actually cost that. The three diamonds with the outstanding cut are going to sell for far more than $550.00 because they are worth more. However the three diamonds worth $100.00 are going to sell for, say, $400.00 because the dealer can take out his report and say "look--the average cost of these diamonds is $550.00 and I'm discounting that!" The Rap report is meant as an indicator--a pointer to diamond prices, not as representations of actual diamond prices. And it's also used as advertisement by the retailers. If the Rap represented wholesale price, how could anyone discount off of it? Shelby Edited for faulty math. I'm an English major--what do you want?!  [Edited by shelbyscout on 07-02-01 at 01:17 AM] |
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Post#15 @
07-02-01
, 01:16 AM
Marvin, Thank you for the "clarity" in your remarks! You mention that you do not do retail. may i ask why? I can only speculate that at one stage you too must have taken your first steps into this business without having credability/licence. Please advice, how one can "test the water" so to speak? Kind Rgrds, Nick |
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Post#16 @
07-02-01
, 01:24 AM
Shelby, Re:Your remarks on diamond grading course. Such a course exists here in India with the Diamond Institute of India. The institute also has affilliation/accreditation with the Gemological Institute of London. Any advice on specific areas of study to look at? |
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Post#17 @
07-02-01
, 05:00 AM
Nickcn, I just want to add my 2 cents of advise. Bangkok and Bombay are main cutting centers for diamonds. For the Far East, Bangkok is also a trading center. Both centers however are specialised in cutting smaller goods. The specific specialty of Bangkok is going from 0.15 up to 0.50 carats. Bombay is a traditional center for lower quality goods, although some companies produce a very nice make. All other goods, sold on these markets, come from other centers, mainly Anwerp, possibly Tel Aviv. The only period in time, that it was interesting to buy in Bangkok, was in the midst of the financial crisis of 1997. At that time, people got rid of their luxuries, to avoid bankruptcies, and diamonds were clearly cheap then. But in normal circumstances, it is not a center to get your goods from, if you want to sell them wholesale afterwards. Good luck, Paul |
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Post#18 @
07-02-01
, 07:19 AM
the rap sheet is used to give false condience to those who don't know the market. VERY helpful for sellers. very treacherous for buyers. |
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Post#19 @
07-02-01
, 10:32 AM
Shelby, Thank you for baring with me on this. Aside from the rap report is there another such indicator to prices? Kind Rgrds Nick |
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Post#20 @
07-02-01
, 10:39 AM
Paul, Your 2 cents are worth a lot more to me. Thank you for your insight. Currently, how does Bangkok and Bombay compare in terms of quality and price? Kind Rgrds Nick |
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Post#21 @
07-02-01
, 10:44 AM
Joe, Aside from the quality of cut, is it true to say that the fluorescence of a stone can add/minus to the selling price. I mean, like a fine painting, the true value is in the eye of the beholder?? Kind Rgrds Nick |
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Post#22 @
07-02-01
, 10:57 AM
Nick, Let us first take the example of Bangkok. For about 20 years, it is a very good cutting center for small goods, even so that something like a Bangkok-cut is known in small round brilliants. Most of these diamond cutting factories (up to more than 1,000 polishers in one factory sometimes) were set up by Antwerp or Indian companies. These companies usually exported their full production to Antwerp, for sorting and assembling purposes. Next to those factories, Thai companies, with experience in coloured gemstones, ventured also into diamond manufacturing. Other than the bigger factories, these companies sold their polished diamonds on the local Bangkok market. As the sales of polished diamonds grew in Bangkok, and as Bangkok became a big trading center for neighbouring countries, the supply of other goods became bigger. These however, could be polished anywhere, from Antwerp, to Bombay, to Tel Aviv. Because of the financial crisis in '97, a lot of the Thai manufacturers stopped or slowed down their production, and the supply of polished diamonds now is completely foreign, since the bigger factories do not sell locally immediately. Thus, Bangkok is a secondary trading center, as is L.A. or New York. Most of the polished, sold there, is imported from Antwerp or Tel Aviv. Prices therefore will be somewhat higher. Bombay is another matter. Piecewise, more than 80 % of the diamonds in the world are cut in India. However, generally speaking, we are talking about the smaller goods, and the lower quality in cut. Most of their production is sold through Antwerp, once again, but the local sales are growing. Bear in mind, however, that most Indian companies have a part of their production in other countries, like Belgium, Thailand, Sri Lanka, China, and so on. It is unlikely that these goods (of nicer cut, generally) can be found easily on the Bombay market. I have no experience with prices in Bombay, so no comment on that. Possibly, it is the same price as in Antwerp, but certainly not lower. Take care, Paul |
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why I only sell and memo to the wholesale
Post#23 @
07-02-01
, 12:09 PM
Thank you for the "clarity" in your remarks! You mention that you do not do retail. may i ask why? I can only speculate that at one stage you too must have taken your first steps into this business without having credability/licence. Please advice, how one can "test the water" so to speak? If I was to compete with my dealers they would not want to buy from me. I am part owner of a large chain of pawn shops.We need to turn our product,and the easiest way to turn is wholesale.The quality that sells on this network are seen few and far,we sell the normally stones,estate,and colored stones.We pull a lot odf the diamonds,and scrap the gold. Different operation than the most.Plus my personality doen't mess with retail. I started in the auto business and after making money,did I invest into the jewelry business.There are many success stories,I hope you become a Sam Walton. Good Luck marvin |
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Post#24 @
07-02-01
, 12:37 PM
Paul, An excellent read. You mentioned Sri-Lanka, a counrty i have fond memories of after working there for 7 yrs. Incedentally next to it's gem capital "Ratnapura". This i believe is where my interest in gems stems from as it was a daily routine to have gems passed before ones eyes. Re: Bangkok. Aside from the popular "Bangkok cut" (0.15ct - 0.50ct) did the production during the "boom" ever reach to dealing with the larger stones? At present i also see dealers (Both Thai and Indian) buying and selling between both countries? Are all chasing the same polished stones imported from Antwerp and Tel Aviv? Kind Rgrds Nick |
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Marvin, Thanks for the encouragement. In order not to become competetive with your dealers, by what guideline(s) do you do your pricing? Kind Rgrds Nick |
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