Want to incorporate more international flair into your showcases? Take a page from the experts.
Five years ago, Maria Benavides, co-owner of Soho Gem in New York City, started carrying a line of enamel, precious stone, and gold rings made in Italy. The look was pretty and popular, but a year after she sold the first pieces, they started coming back into the store for repair. “You can replace stones, but when the enamel starts chipping, that’s a big issue that only someone with a particular know-how can fix,” she says.
Back the rings went to the manufacturer, at a minimum cost of $100 for a one-way trip. Neither the vendor nor Benavides wanted to pay for the shipping; the customers certainly didn’t want to pony up. Repairs became such a nuisance—and a pricey one at that—that two years ago, Benavides stopped stocking the items. “People are willing to wait for the repair, but they’re not willing to pay for postage and insurance,” she says.
|Maxi Marine Chronometer in stainless steel with 18k rose gold case and rubber bracelet; $14,800; Ulysse Nardin, Boca Raton, Fla.; 561-988-8600; ulysse-nardin.com|
|18k white gold tiger ring with diamonds and 1 ct. smoky topaz; $27,900; Carrera y Carrera, New York City; 212-753-8877; carreraycarrera.com|
Those are the lessons many retailers learn—the hard way—when they import jewelry. Carrying hard-to-find international vendors can set a business apart from the competition, attracting discriminating shoppers willing to pay a premium for exclusive merchandise. But the process can be frustrating: Besides the obvious language difficulties and time-zone inconveniences that complicate the buyer-seller relationship, there is the added burden of filling out Byzantine customs forms and mastering a whole new vocabulary (e.g., landed: industry lingo for payment prices inclusive of shipping and customs fees).
“Years ago, this process was a killer,” says George Press, president of George Press Jewelers in Livingston, N.J. “If we couldn’t buy items already landed, we’d stay away.”
Press outsources the task of importing jewelry to a broker that handles landing, paying duties, FedEx, and the occasionally laborious process of getting items through customs. Plus, because he uses a broker, he is able to lock in pre-invoiced prices. “I’ve never had an issue with fluctuating currencies,” he says.
By comparison, stores who don’t partner with brokers can struggle to find up-to-date import and export codes when items need to be shipped overseas—on repair jobs, for example. But even when they employ a savvy broker, some jewelers still prefer to fix as much merchandise in-house as possible instead of waiting a minimum of a month for pieces to return. Such is the case with Leon Adams, president of Cellini Jewelers in New York City. At one point, Adams had carried numerous international names, including Fabergé, Roberto Coin, and Spanish brand Carrera y Carrera, his first international acquisition in 1977. “If we had multiple items and didn’t need them back in a rush, then we would send them back to the manufacturer,” he says of expensive and time-consuming overseas returns.
Today, Cellini sells mainly private-label jewelry as well as high-end watches like Vacheron Constantin, Bell & Ross, Franck Muller, and Ulysse Nardin—though timepieces don’t necessarily make for easier transactions. Fluctuating currency values, particularly for the Swiss franc, can be a big headache. “I’m getting price increases every three to four months,” he says of some Swiss transactions.
For a busy retailer, paying a broker could be “money well spent,” says Tony Goldsberry, owner of Rock House New York, a sales and marketing agency that represents numerous international designers including Mattia Cielo and Federica Rettore from Italy, Shaun Leane from the United Kingdom, and Elena Votsi from Greece (all of whom are available landed to retailers). Broker costs, however, can range from a simple flat fee of $100 for a small shipment to a sliding-scale percentage of values, depending on materials. “It’s kind of like taxes—there are a lot of gray areas,” Goldsberry says.
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|Elena Votsi 18k gold ring with brilliant-cut diamonds and garnet; $42,000|
Veterans in dealing with overseas merchants advise asking lots of questions. For example, it’s important to find out how often firms visit the United States, when national holidays fall, and who the point of contact is when the firm is closed. “Factories can shut down for long vacations during summer months, and custom orders can take six to eight weeks for delivery,” says Benavides. The most successful international brands have domestic representation, says Goldsberry. “Americans want answers in real time to their customer service questions,” he says.
If you’re not working with a broker, have the following checklist ready when negotiating with overseas vendors:
- Who fills out the customs paperwork and pays customs duties (if any)?
- Are prices landed?
- How are items shipped?
- Are there minimums for orders?
- What is the lead time for reorders?
- What is a vendor’s recommended markup?
- Where are the other U.S. points of sale (for referral purposes)?
Also, be specific about delivery dates as well as diamond and colored stone quality, and follow up on all aspects of the order before you send a deposit. “If a company is quick to send information and respond to your questions, this is a positive sign that they are attentive to your needs,” says Alan Friedman, owner of Alan Friedman in Beverly Hills, Calif., a manufacturer of natural colored diamond jewelry and a retailer with 35 years of experience buying and sourcing overseas, particularly in Hong Kong.
18k rose gold ring with antique-cut green prasiolite and 0.35 ct. t.w. rose-cut brown and 0.35 ct. t.w. rose-cut white diamonds; $10,530; Federica Rettore at Rock House New York, New York City; 917-553-5360; federicarettore.com
When Friedman travels to Asia, he looks for “unusual things” he can market under his own brand, he explains. “Hong Kong is like a giant grocery store with thousands of items,” he says. To purchase more exclusive product, look for vendors that show only in Hong Kong. And remember: Everything is negotiable. “Many factories are vying for your business,” he says.
For savings, Friedman advises buying basics like wedding bands from an Asian source, rather than from a U.S. manufacturer that has its bands made overseas. Regarding the June and September Hong Kong Jewellery & Gem Fair, he suggests staying for the duration (four days in the summer and seven days in the fall) since it takes so long to get there and requires a full day of rest before hitting the floor.
When traveling, bring a budget and stick to it, says Friedman. On a recent trip to Asia, a wholesaler from Los Angeles became overwhelmed by negotiations and wound up going home with huge amounts of merchandise he couldn’t sell. “He strayed from the initial plan to buy hoops, bangles, and wedding bands, and ended up overpaying for tons of colored stones,” says Friedman.
Additionally, book travel—including a hotel room near the show—early. The city of Basel, Switzerland, for example, is notorious for its tight accommodations, so when planning a trip to Baselworld—the annual spring luxury watch and jewelry fair—it pays to book as much as a year in advance. The same applies to the Hong Kong shows.
Also, don’t forget to inquire if merchandise contains any monitored materials or those protected by CITES—the Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international agreement between governments designed to ensure that international trade in specimens of wild animals and plants does not threaten their survival. Some pieces may require a store to have a U.S. Fish and Wildlife Service permit. (Certain types of coral, such as live rock, would require a permit to import.) “Get everything in writing,” advises Laura Brown, CEO of ViewPoint in New York City, a sales and marketing agency for foreign vendors.
In general, some of the best lessons in importing international merchandise are about what not to do. For instance, Rick Mahler, owner of Packouz Jewelers in Portland, Ore., stopped buying rings from a certain maker of enamel and gold jewels because “the company took forever to size one,” he says.
Benavides and her sister, Irina Ferry, also a co-owner, were plagued by quality issues from an Italian company with no U.S. office. “Stones kept popping out, and it became very costly for us to fix these ourselves,” she says. In another instance, they learned a lesson about what consumers are willing to pay for. It was the summer of 1998, and the siblings were just starting out—the store had recently opened, and Benavides had just gotten married. They brought in Majofer, a maker of colored stone jewelry from Córdoba, Spain, to lure clients interested in big looks for less. “They had large, colorful semiprecious stones set in hollow, lightweight gold settings,” Benavides recalls. But the same traits that attracted them to the line ultimately were its downfall. “The pieces were hollow, and at a time when gold was selling for $300 an ounce, customers were used to buying pieces with weight,” she says.
Sometimes, the vendor is the one who learns the lesson. On one such occasion, a Swiss company shipped Adams a selection of watches with crocodile straps—protected under CITES—but failed to properly document them on the customs forms. “The watches sat in customs at JFK airport for 60 days,” recalls Adams. “I had to physically send someone there to cut off the straps. Then I could have the watches.” The vendor, in turn, had to eat the cost and resend all new straps, which Adams received four weeks later.
Still, the cachet of carrying international designers can outweigh aggravations. “If something is sold in Italy, Japan, and the U.S., it’s a little more exotic,” says Benavides. Plus, price points can be better in one country versus another, depending on the merchandise. Brazil, for example, can offer better prices on big colored stone jewels than Italy because it is a source of them; Asia and India have lower labor costs, in many cases, for faceted loose stones and manufacturing. And despite some recent bad press—Standard & Poor’s credit rating downgrade, for one—and anecdotal grumblings about U.S. merchants “not paying their bills,” American jewelers are still considered trophy clients. “America is still a very big and lucrative market,” says Benavides.
Goldsberry couldn’t agree more: “Customers may be purchasing fewer items, but they want these pieces to be special, individual, and personal.” Rock House designers, he adds, “are on plan to double their U.S. sales during 2011.”