Moving Jewelry With the Web

The Internet isn’t dead. Nor will it replace traditional jewelry stores.

Instead, the Internet is evolving into a business tool that’s helping to establish better relationships among jewelers, manufacturers, service providers, and consumers. The Internet as business tool is providing more efficient ways to perform a number of daily business functions—including inventory management—and quicker ways to transport and receive merchandise.

Forming a club. Jewelry manufacturer and distributor Super Bell Jewelry Inc., Los Angeles, is making one of the larger Internet investments. And the company is taking its best retail clients with them every step of the way with the creation of the “Jewelry Clubhouse” (JCH), www.jewelryclubhouse.com. Retailers and their customers can use the Web site to purchase jewelry directly from the Super Bell product line.

JCH merchants and their customers have dedicated access to the jewelry club Web site, says John Han, Jewelry Clubhouse CFO. With the Web site, retailers and their customers have access to the entire Super Bell inventory on a 24/7 basis—which means retailers can increase their Super Bell product line without buying more product.

“It’s another way to expand their inventory,” Han says. “We have more items in stock than they could possibly have in their store.”

In addition, Han explains, because of an “Internet-based network tracking system” that provides retailers and their customers with an “automated pipeline inventory,” all of the product on the site is guaranteed to be available.

“If there are less than 10 items in one particular stock, an ‘alarm’ is sent to the supplier,” Han says. “It provides real-time accounting.”

The retailer’s customers can access the secure site from any computer by using a password. The customer can choose to have purchased products delivered to the store or to his or her home. Products are priced at triple keystone, Han says, but customers can contact the retailer and negotiate the price of an item before purchasing.

“Their customers will log on to our site but directly link to the merchant,” Han says. “We don’t have the customer’s information. We are not stealing customers.”

Retailers enrolled in select membership categories also receive “points” that can be redeemed for merchandise or used for memo orders. Every dollar purchased equals one redeemable point. Han said that the company is working to make points redeemable for free airline travel.

Super Bell introduced JCH to their best retailers in May during an “open house” at The JCK Show ~ Las Vegas. During that meeting, Lo Y. Huang, Super Bell president/CEO, gave these retailers the opportunity to join and eventually become investors in the company. Attracting their best clients to the program is important for Super Bell because the company hopes to make each marketplace exclusive to one Super Bell retailer.

“We’re trying to limit the market based on criteria,” Han says. “It will be restricted by territory. We don’t want two advanced members in the same territory.”

So far, about 150 “merchant members” (retailers) have enrolled. Retailers can choose either “Basic” or “Affiliate” membership categories. “Affiliate” members can purchase product, have online access to the Web site, and have retail-time access to Super Bell’s inventory. Affiliate membership is free. Basic membership costs $30 per month and entitles members to points redemption, online access for their customers, and online accounting services.

During the first quarter of 2004, Super Bell will offer a $50-per-month “Basic Plus” membership that will include a “Limited Memo Program,” which allows serious buyers the chance to “touch and feel” a product before buying it, without added costs to the retailer.

The “Advanced” membership option, scheduled to be offered in May 2004, includes an investment and profit-sharing option and offers Web site customization, marketing services, and market exclusivity. Sometime next year, an “International Distributor” membership, which also includes the opportunity for ownership and profit sharing, will be offered.

Something for everyone. The model Super Bell is following, while advanced, is typical of the models many manufacturers are trying out. Kristian Chronister, vice president of marketing for jewelry manufacturer Andin Intl. Inc., says the goal is to market their products and sell more jewelry to more consumers without undercutting the retailer.

“From talking with my peers and a lot of my friends, we all seem to reach the conclusion that the best way to help large manufacturers and small retailers is to automate the process of selling jewelry,” he says. “The Internet makes the distribution channel more efficient.”

Jewelry.com is being used as one such model.

New York-based Andin purchased the jewelry.com name in 2000 during liquidation proceedings. The company then joined forces with Leo Schachter and Aurafin/OroAmerica to market their jewelry on the Web—not directly to consumers, but by partnering with national retailers such as J.C. Penney, Sears, and Zales.

Chronister notes that the manufacturers simply market their jewelry and give the customer the choice of how and where they want to buy it. “We do not sell jewelry,” he emphasizes. “We just match buyers to the sellers who have what they want.”

Chronister adds that the manufacturers who supply the jewelry were chosen because they complement each other. For example, Andin does mostly color and diamond fashion, Schachter does bridal and larger diamonds, and Aurafin does basic gold.

Andin owns and operates the site, which also is used to conduct consumer surveys.

For independent retailers, Andin took a different route by opening a discount Web site (www.jewelclub.net) that sells excess product quickly and at a discounted price to small retailers.

“It’s a private Web site where small retailers and independents can look at overages,” Chronister says. “We give you a better price if you go in and do it yourself rather than tying up our sales staff.”

Chronister says the site has been up for close to a year. “I would characterize it as being in the beta stage,” he says. “Although we haven’t been pushing it very hard, it is open for business and you can request a password.”

Moving goods. Once goods are purchased, retailers and manufacturers have to move them quickly and safely. The Internet is being used to streamline this process as well.

OneService, an El Segundo, Calif., company that ships and insures high-value goods, has made shipping and risk management services available to clients on the Internet.

“We now provide insured express shipping services from the desktop,” says OneService marketing director Mike Lazorchak. “This allows easier access to our service and makes it more convenient.”

By using the Internet, Lazorchak says, retailers don’t have to purchase any software. All they need is an Internet connection and a printer.

Without leaving their desktops, those using the service can secure delivery, print labels, track what they’re shipping, and maintain an electronic database of everything that has been shipped.

The service is similar to what the company has always offered. The difference is that the Internet has made the same process more efficient, says OneService president Scott Eschelman. “We just took the experience we have in managing risk for jewelers and took it online,” he says.

More businesses and consumers will continue to use the Internet—not to change the way business is done, but to make daily business transactions more streamlined and efficient.