BlueNile Vs. "wholesale" - Jewelry Discussion

    Wholesale means you buy a whole lot. 

Hello Kevin and others;

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If you want your argument to be based on semantics, you&#;re ok, but
the fact is, there is a broader meaning when we are talking about
conventional usage of the term &#;wholesale&#;.

It means, as most people understand it today, that if I am a
retailer, I am one of many &#;outlets&#; for your product so that you can
do what you do best, namely manufacture, and I will do what I do
best, that is, sell to the public. You will not have to worry about
sales tax, and I will have to collect it and hand it over to the
state. You can stay in one place, or even have your operation
overseas, but if you have lots of retailers like me across the
country, you&#;ll reach a broad market. You will only make as much
inventory as you need to fill your order or as much as you see fit
to stockpile, whereas, I will have to invest in a whole lot of
inventory, relative to my investment in my business, so that my
customers will feel they have choices, and I will sit on it until it
sells.

Now most jewelry retailers, other than the big box stores and mall
chains, will buy in amounts varying from one piece to dozens, but
over a period of time, that adds up to &#;quantity&#;. For instance, I
only spend around $-$ a month with my largest vendor, less
with a few others. Add that up month by month, year after year. I
expect to mark it up and sell it for more than I paid for it. Why?
Because I don&#;t work selling other peoples stuff for free. How much
I mark it up depends on who I&#;m selling to. What!? How&#;s that fair,
you ask? Simple. If I&#;m selling it to a retailer, I keep the price
low enough to make it possible for him to make a living reselling it
at a competitive price. If I sell it to a private customer, I sell
it at a competitive &#;retail&#; price so as not to undercut my
retailers. Is the diamond industry doing business this way? I
think not. And I know if I did business the way they are doing it, I
might very well be out of business in relatively short order. But it
appears to me the diamond industry is expecting most retail to end up
in the hands of a very few.

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But they haven&#;t figured on the real 800 lb. gorilla. De Beers.
Wait until &#;the Octopus&#;, as they&#;ve been referred to historically,
starts setting up retail and online sales. Anybody else see this on
the horizon? Do you think it&#;s coincidence that, after decades of
not being allowed in this country for violation of the anti trust
laws, they finally fessed up, paid the fine, and are now good
citizens? Think it was keeping them up nights worrying that people
thought of them as a monopoly?

So why is it that diamonds are available to the public at near
wholesale prices? I have my theories (something along the lines of
an analogy to rats leaving a sinking ship), but I&#;ll be following
this thread to see what others have to say. And by the way, I hope
the &#;what&#;s wrong with Wal Mart&#; question is rhetorical. It&#;s been a
dead horse in these parts for some time now.

David L. Huffman

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