End of the Road

“The first time I was robbed, there were eight guys,” says Joe Carullo, co-owner of KC Designs, New York, and president of the Prime Jewelry Group Show. “One guy pushes me back … they slash your tires so you can’t chase them, they smash your [car] window, take your jewelry and run away. It’s all over in 30 seconds.”

Unfortunately, Carullo’s first time wasn’t the last. KC Designs has been hit on the road “two, three, five times, I can’t remember,” he says. But of one thing he’s certain: “If you’re going on the road, it’s only a matter of time before you get robbed.”

So Carullo and 29 other jewelry makers concerned about the safety of fellow traveling salesmen fought back: They started the PJG Show (also known as the “Prime Show”), a traveling jewelry show that visits high-crime areas such as Washington, D.C., and Houston. In secure—and posh, as most events are held at Ritz Carlton Hotels—settings, non-competing manufacturers and designers spoil their best clients with breakfast, lunch, and dinner during two days of business. And since the show’s inception three years ago, retailer response has allowed the addition of two more venues, in Dearborn, Mich., and Sarasota, Fla.

Jewelry shows allow retailers to view lines and buy without putting salesmen at risk. Shows such as Centurion, begun in 2002 and held yearly in Tucson for makers of luxury jewelry, offer “efficiency to those who offer high-value merchandise,” according to show organizer Howard Hauben, H2 Events, Merrick, N.Y. The lower risk level and greater security “lend more credence to trade shows in general,” adds Hauben.

Call what PJG does a “reverse sales call,” if you will, says Alan Lipscher, president of Global Diamonds, Chicago, and chairman of the rules committee of the PJG Show. There are some locales Lipscher doesn’t want his salespeople to venture into alone. “It’s just too dangerous to carry our lines individually,” he says.

Hannah Weiss, owner of H. Weiss Co., New York, agrees. She pairs up salespeople to visit cities with high rates of crime. “This increases expenses, but it’s well worth the peace of mind,” she says. To further reduce the exposure of salespeople on the road, Weiss also attends more regional shows.

Such policies are starting to have an impact. Preliminary JSA statistics for 2004 show instances of off-premises crime down 39.4% compared with 2003 figures. Wholesale values of losses dropped 23.2%, and arrests of those who committed these crimes increased 62%. These improvements are the result of better law enforcement efforts and better practices by industry members.

“Sometimes it’s at [a jeweler’s] own impetus, and sometimes insurers [force changes],” says Kennedy, referring to the drop in losses of $1 million or more.

A Changing Line of Work

Despite policies and practices that attempt to minimize risk to traveling salespeople, fewer young people are entering the profession. According to industry observers, a “young” salesperson is in his forties, and a typical one is in his fifties. A salesman for 30 years, Gary Risinger says the only exceptions to this age rule are commonly “a [company] owner’s son or daughter.” Exacerbating the decline in the numbers of new people entering the profession is a decrease in the level of income. “You don’t make the kind of money you made 10 years ago—I can’t tell you how many salesmen tell me that,” says John Kennedy, president of the Jewelers’ Security Alliance, New York.

Adds Lipsher: “The concept of a traveling salesman was great … but the world is changing, and this is not a system that will continue for many years more.”

Some manufacturers have even added the duties of accounts payable clerk and sales manager to the position of jewelry salesperson—making them responsible for deadbeat clients and their creditworthiness. In a recent JCK “Counterpoint” column, industry consultant and former JCK publisher Frank Dallahan decried “the transfer of business risk from business owners to the sales function” and suggested that salespeople are now “viewed as independent contractors as opposed to employees.”

Even when salespeople do visit stores, some retailers aren’t happy to see them. “The days of ‘Hi, I’m Joe, want to buy my stuff?’ that’s over,” says Carullo. “They only let in those they know.”

Non-traditional Sales

Many manufacturers now rely on “other means to conduct business,” says Kennedy, instead of sending so many salespeople—with so much merchandise—on the road.

The Internet. To entice retailers to place orders online, some vendors offer discounts. H. Weiss Co. does so because there’s so much more to see—more than salespeople physically can carry, or legitimately can carry according to insurance limitations. “Retailers are wowed on the Web,” says Weiss. “And it’s much easier for us.”

Technology. A CD-ROM with a 3-D presentation of an entire line allows vendors to reduce the amount of merchandise taken to stores, so that a salesperson might carry only new pieces and a few best sellers. “You could turn that inventory [not carried] to cash,” adds Dallahan.

Sometimes technology means more than laptop computers. At Suna Brothers, New York, salespeople travel with Babaco vehicle locks that enable lines to be left in trunks—insured and protected—for periods of time. The Babaco “sort of arms the trunk so it can’t easily be opened,” explains company president Aron Suna.

Office appointments. Buying can also occur in places other than a store or show. For example, Suna encourages customers to come to their office to shop.

“We’ll fly them into New York and put [a retailer] up for the night,” says Suna, who notes that orders always double if sales happen in his office. “We’ve captured [the retailer’s] attention and he has no distractions,” even more so than at shows.

The mail. Another clever move: Suna mails selections of lines—customized to the retailer, based on past order history—to stores for jewelers to make purchase decisions.

Jewelers must assess the quality of a vendor’s product, but do you really need to see one of every single product a company makes? “We have to get away from the concept that the customer has to touch and feel every piece,” says Lipscher. After seeing a sample of merchandise, order the rest from a catalog, Web site, or look at a CD of images and phone in a request. Then more energy could be spent on other areas—say, marketing assistance—rather than “picking out one style of every earring,” says Lipscher.

Total Dollar Losses
(in millions of wholesale dollars)

2003 2002 2001 2000
Source: Jewelers’ Security Alliance Annual Crime Reports
On-premises $88.3 $77.7 $71.2 $64.8
Off-premises $44.5 $48.3 $51.5 $53.1
Total $132.8 $126.0 $122.7 $117.9

Off-Premises Losses
(in millions of wholesale dollars, unless otherwise specified)

2003 2002 2001 2000
Source: Jewelers’ Security Alliance Annual Crime Reports
Robbery $31.6 $40.0 $32.9 $27.4
Theft $9.0 $8.1 $16.9 $24.4
Burglary $3.8 $246K $1.7 $1.3
Total $44.4 $48.3 $51.5 $53.1