Purchasing diamonds has always been burdensome for many retailers, with issues such as capital investment, quality control, and unexpected shortages leading to severe headaches.
A new diamond supplier has expanded its business to Australia and New Zealand, intending to solve many of these issues with an innovative new service-based model for retailers.
Canada’s HRA Group has launched Dialog, dubbed the world’s first ‘subscription service’ for diamond jewellery retailers.
The process is simple – retailers subscribe to Dialog for a monthly fee. Dialog then provides retailers with anywhere between $100,000 and $5 million in stock/inventory – loose stones and finished jewellery – which is held in-store by the retailer.
The monthly fee is 1 per cent of the total inventory value up to $350,000, with the fee declining to 0.8 per cent beyond that.
The retailer pays the wholesale price only after a diamond or jewellery piece is sold. A replacement can be sent within 24-48 hours with no associated fee for replenishing stock levels.
Pricing is reviewed quarterly to ensure it is competitively priced against the market, and if needed, any amendments are communicated to retailers so they can adjust their pricing accordingly.
When a diamond or jewellery piece is sold, the retailer receives an additional two per cent rebate, which is deducted from the monthly subscription fee.
Dialog was launched in 2020 by co-founders Itay Ariel, Reut Rothstein, and Aaron Ariel.
Rothstein said the company’s approach has been slow and steady, and it is hoping to build long-term relationships with suitable retailers.
“Most of our growth has been by word-of-mouth so far. We currently have around 200 stores on Dialog, and we usually partner with new retailers due to recommendations from their friends,” she told Jeweller.
“The most common feedback we receive is that we’ve freed up more time for retailers. Most business owners are responsible for stock management, so things like travelling overseas for buying trips and time-intensive quality control procedures are no longer necessary.”
Rothstein said that the most high-profile endorsement of Dialog so far has been US chain Ben Bridge Jeweler, which has 35 stores. She explains that each store services a unique market, so a custom merchandise mix is generated for every location.
To determine the optimal merchandise mix, routine sales analysis is performed by Dialog to build custom recommendations for retailers.
A new Australian division of HRA Group has been established in Australia. It is headed by director of sales Nicole Bender, who explained that there are several key differences between Dialog and traditional ‘call stones’ or consignment agreements.
Firstly, the diamonds and jewellery are held by the retailer in-store indefinitely, with no sense of urgency or ‘rush to sell’ because Dialog will not request a return of inventory.
In addition, jewellers are free to set loose diamonds in any jewellery they like, and retailers can request any diamonds or jewellery available in the Dialog inventory. Retailers can also return diamonds or jewellery to Dialog at any time – there’s no obligation to stock specific inventory.
“We’ve recently expanded into Australia, and we have a few really good retailers on board already. So far, the reception has been really positive from everybody that we’ve spoken to,” Bender said.
“The message that stands out the most is that many people have never heard of something like this – it really is something new to the market and the industry.
“Because of this, some people find it difficult to grasp the service initially – because it can seem too good to be true. They often jokingly ask what the catch is.”
She continued: “The only thing I have to say to that is that the whole premise of the program is to sell more diamonds and diamond jewellery, and that’s why we are looking for the right retailers to work with. We do well if they do well; it’s as simple as that.”
Dialog owns all inventory/stock and is not a third-party aggregator, with a six-month trial available. If the service doesn’t fit the business, the diamonds are returned to Dialog and subscription fees are refunded to the retailer.
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