In this fast-paced technological age, there are several budding entrepreneurial ideas and innovative concepts. These concepts have been used in the creation of business startups. One of such breakthrough ideas exists in the diamond industry.
Backed by studies, the diamond industry is quoted to be doing figures at over 142 million carats produced from mines alone. This figure represents a significantly high stake demand for diamond jewelry. The diamond industry has a lot of attraction and a potentially good revenue stream for the entrepreneurial mind.
There are factors to consider when preparing to start a diamond business. In this article, we run through a list of innovative ideas you can consider to begin your diamond business.
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How to Start a Diamond Business
The fascination with diamonds began ages ago. There is a seemingly sentimental attachment to diamonds. Their rarity made them a coveted commodity by royal houses in medieval times. And yes, rare means expensive.
Below are ideas to consider when starting up your diamond business;
1. Source for Diamonds
The first thing on your list would be to find a credible diamond source, this is the part where you scout the market for a good supply chain. Next, you have to consider what diamonds you want to deal in. If you decide to go into natural diamonds, you would have to source from mines. Now on the premise that you’re entering this business as a distributor. It means you have to be informed of the Kimberley rule.
The Kimberley act process was a scheme passed to regulate diamond mining. This was done to prevent the spread of conflict diamonds mined unethically. Once this important foundation is in place you may proceed.
Natural diamonds are very pricey, so one innovative idea is to start a lab grown diamond business. The presence of a lab grown diamond business has presented us with a viable alternative that is relatively cheaper and still ranks high in the same quality as natural diamonds.
There is a big market for this and also it cuts away the problem of unethical mining since it is produced in a lab.
Lab grown diamonds can be grown in a few weeks and require fewer energy emissions, making them more eco-friendly. So you would have a choice to make on the type of diamond to go for.
2. Funding Your Diamond Business
The diamond business is capital intensive. Capital is a very crucial aspect to examine before creating your startup. The extent of funding is dependent on how you want to approach this business. Do you want to be a major distributor or a retailer of jewelry like diamond tennis bracelet, proposal rings, wedding sets, etc?
The choice for funding should be predicated on the business model you have chosen. This will give you a rough estimation of what you would be needing to start. Are you going to bring in team members? Then factor in manpower cost.
Run your cost analysis properly. If you decide on being a retailer, the capital requirements may not be as hefty as if you decide to take on the role of a major distributor. So you have to consider your ideas before starting up a diamond business.
Innovatively, you can decide to apply for a franchise. Franchising in the diamond industry is not a really widely known concept but it does exist. Owning a franchise under the corporate umbrella of another diamond-producing business will help you augment some funds. You would be able to spread these funds in other aspects of your business, while still retaining control of the franchise.
3. Don’t Forget Your License
You need a trading license to begin a credible diamond business. You don’t want to get in trouble with the authorities so it is best to get this factor sorted at the start. Licensing is not difficult. For example, if you decide to start a diamond trade business in Dubai, obtaining a diamond trading license is not expensive.
Depending on how far you intend to go in this business, your ideas have to stand as a legal entity. It can be a sole proprietorship, a partnership, or an LLC (Limited Liability Company).
As a sole proprietor, you can access business funds and have 100% control. It is ideal if you are interested in retailing on a small scale. However, if you wish to trade on a bigger scale, a general partnership or an LLC will serve you best.
Aside from licensing, you should also consider getting some insurance coverage. Adding insurance to your operating license is an innovative way to make your business stand out from the pack. Many jewelry dealers operating on a low-scale level do not care much about licensing and getting professional documents. This is because they run the business like a black market. But you can create the right impression in the mind of buyers by adding these professional touch points.
Insurance helps indemnify your business against future potential occurrences like theft and fire. Moreover, it will aid your plans if you intend to scale up your diamond business operations at some point in the future. You cannot run a credible diamond business in most parts of the world without getting basic insurance cover at least.
4. Selling to a Market
Every product needs buyers. This fact is no different for diamond jewelry whether you deal in all types of diamonds or customized wedding ring shapes. The act of selling is an art indeed. It is no different from the diamond business.
Carrying out feasibility studies and market research can help you understand the market buys, type of diamonds, and where they’re located at. This stat is referred to as demographics. You have to consider hunting for buyers outside your geographical location if you intend to thrive in this business.
The truth is the diamond industry thrives on connection. You have to be well placed in society. You should also have visibility or be findable. As you already know, diamonds are a luxury. Its buyers can simply be termed ‘luxurious buyers’ so you have to get your marketing tactics on point to gain that massive traction that leads to sales conversion.
One innovative way to create a standout business for yourself is to study the previous market seasons. Sometimes the market fluctuates as a cause and effect of different seasons, like in the COVID times when a lot of stores were on lockdown and supply was greatly affected.
To prevent a dip in your business’ future, you would want to Innovatively create ideas that can invoke sentimental attachments between your business and the customers. Thus by creating your own market, you are able to build a strong supply chain that will stand the test of time.
An example of this can come in terms of creating a buyers forum for interactions, giving great discounts on diamond jewelry, and taking on customer email lists for constant reminders to make sure you and the customers are always in touch.
5. Define Your Brand
In business, branding is everything. It is no different for diamond business owners, so you have to work on creating your brand image in the minds of potential customers. It all starts with a plan of action.
A plan of action is where you start up and where you want to end up. It is a similar action done by the big trading companies now calling the shots in the diamond industry.
You should decide on a niche. For example, you can concentrate on retailing specific cut and polished diamonds for wedding sets or stud earrings. On the other hand, you might decide to go into the distribution of rough diamonds from mines or do both.
Carving a niche for your diamond business is an innovative way to build a standout brand. Interestingly, niching is not only what you choose to retail but how you choose to appear before the public. Your innovative side can appear in the way you brand your logo or customize your video ads and display color psychology. Remember, it is not only about building a diamond business but also laying down a marker in the minds of men.
The diamond industry pulls a lot of people together in the value chain from miners to dealers, retailers, and finally buyers. Starting a diamond business will help you come across different people in the value chain. What better way to start than consider our innovative ideas discussed?