Profit From The Long Game

Sustainability. It’s today’s buzzword but, beyond the buzz, it’s hardly new because it encompasses basic things like trust, ethics and responsibility.

When I started in the gem trade I was made acquainted with the spirit of Mahzal u’ Bracha. Luck and blessings. “Take the stones and pay for them after you made your deal…I trust you.” Some people abused this trust but in general, the system worked and still works. The colored gem trade wasn’t quite as formal but it did (ad still does) operate in a spirit of competitive collegiality that demanded certain ethical trading standards were met.

However ethical dealers may have traded within their own community, the least asked question about any particular stone always was “where did it come from?” If the 4Cs checked out, or the color was right and the price, after haggling, allowed a decent profit. Who cared whether it illicitly mined, stolen, mined under exploitive circumstances or cut in a sweat shop?

Who cared? …Until some people started caring.

Conflict diamonds brought the movie Blood Diamond (and the lesser known Lord of War) and on from there. Now sustainability had to extend far beyond ethical trading within the confines of the gem community. The diamond trade understood this necessity fairly quickly, but the colored gem trade, being very fragmented and without a De Beers/father-figure, has been much more slow to react, though there is good progress.

It will cost more to give artisanal miners a fairer return on their labors. IT will cost more to help develop ancillary activities around mining site to provide other incomes and sustenance for miners’ communities. It will cost more to improve working conditions in cutting operations. But in the long game, the money will come back

Here’s a real-life case in how this can happen: In the mid-1980s India’s diamond cutting industry had grown mightily in the 10 years leading up to that time. But working conditions for people in diamond factories were appalling. I witnessed them myself. No chairs, only hard pillows, no safety precautions or ventilation (I developed aggravating respiratory infections after my visits), poor pay and, yes, a too many under-age workers. The product suffered. Complaints mounted about out -of-round diamonds falling out of mountings or diamonds that just looked dead from burns and abrasions. And there were rumblings from social organizations about children cutting diamonds.

Both De Beers and Rio Tinto acted; obliging their clients improve working conditions — immediately. Many companies balked at the costs of building new, healthy, safe places to work but if they wanted to be supplied with rough diamonds they complied. By the end of the decade, India boasted some of the safest, most modern diamond operations in the world. Places where I didn’t need to see a doctor after visiting. The product (and productivity) greatly improved, Workers were rewarded, with cleaner workplaces and better pay but more rewards, in the form of supply contracts with major US, Japanese and European jewelry companies, went to the business owners. In short, they made an investment in the long term that made their businesses much more profitable than continuing the old way.

Can we transform other sectors of our industry in the same way? Many are working on it but it is not easy because there’s so much invested in the status-quo. The real challenge is changing minds because almost no one looks up when they are counting money. Only when the money stops flowing do they ask what happened.
Adopting responsible practices may mean there’s a bit less money to count in the short run, but the pay-out will be much, much longer. And that’s where the word “sustainable” has real meaning.

In future columns, I will address how these lessons can be applied though the supply chains in a realistic market oriented way.

Community and Corona

The Corona Pandemic is affecting the lives and livelihoods of millions of people around the globe and our industry is surely in for a few very slow months— people are  into survival mode, thinking more about essential supplies rather than jewelry.

In these times retail jewelers can win immense goodwill by providing support for their communities — paying their employees sick leave if they don’t qualify under the recent USA legislation,  if they are not already doing so — including allowing employees to take off to help and ill family member;  sponsoring testing in areas which are not participating in such measures, and supply-drives to help those unable to stock up on essentials.

Then, announce this police in place  of the usual promotional special sale of the  week, and in your social media posts. Stress your ties to the community.

Of course it will be a difficult decision because, without a miracle, we are all in for a pretty soft first half of the year, which may knock on to the second half.  The temptation to spend as little as possible is there, but think of this as an investment, rather than an expense.

This idea come to me when the GIA announced it was ensuring all of its employees would have adequate sick leave, including  time to care for a family member if they became ill. Even though I had just left, I felt a strong surge of pride that I worked 19 years for an organization that cared so much about its workers. Some local utilities have pledged not to cut or suspend services for customers behind in their bills and I have read of other local businesses pledged to pitch in with resources, even sponsoring testing, if the tests are not paid by the state or federal government.  I will damn sure patronize them once this pandemic winter passes over.

Businesses are integral parts of every community and jewelers are an integral part of neighbors’weddings, graduations, anniversaries and — perhaps even a guilt trip— and there’s no more effective way of demonstrating commitment to your community than by coming through in a time of need.  People don’t forget that.

I created this website to advise and comment on issues regarding sustainability and best business practices, which most people tend to think of pertaining to gemstone mining and cutting, but not at the retail counter.  But this is where the goodwill of the consumer counts to most so it’s very relevant here.

With all the negativity going on, this is a chance to be different — way different — and the goodwill that will come back will be much greater than any 20% off sale will ever generate.