Trusting suppliers but checking their stock is the accepted practice among wholesalers that want to ensure their diamonds are ethically sourced. Dealing with well-known, accredited companies helps, many have noted, but vigilance is still crucial.
NY: Maintaining standards
“In our business, reputation is the biggest factor,” said Lior Sofer, vice president of New York-based diamond manufacturer Beny Sofer. “Most of our vendors are De Beers sightholders or well-established companies that have been in business for well over 40 to 50 years.” In fact, he said, he would rather lose business than deal with a supplier that did not meet his company’s ethical standards.
Initially, customers would inquire about the source of their diamonds and ask Sofer to sign the Kimberley Process (KP) guarantee. “We really don’t get those questions anymore,” said Sofer, explaining that all the company’s memos and invoices say it only buys from “conflict-free and ethical sources.”
“Buying from the normal channels definitely means you are paying the market price. Of course, there are ways to go outside the market to get cheaper stones. But we avoid dealing with those shadier companies,” he stressed.
Sofer applies the same standards to buying from the public — asking how the diamond was acquired and whether the seller knows where it was sourced. “Typically, it is a family heirloom or an engagement ring. But if the answers don’t seem kosher, we say no.”
Having those answers is critical for companies in today’s market, he went on. “If we really want to be an important industry that grows with the times — and especially caters to millennials — we need more information.”
Philadelphia: Check and recheck
Ensuring ethical sourcing for diamonds takes a combination of tools, technology and human knowledge, according to Eli Niv, whose manufacturing company, Crown Casting, is based in Philadelphia, Pennsylvania. Having spent 18 years as a retail jeweler before switching to wholesale, he has a broader perspective on the value that responsible sourcing has for the
end market.
“When people start working with me, they ask about ethical sourcing, and I answer every question. As a retailer myself, I was in that same situation,” Niv explained.
“At the end of the day, jewelry is liquid — it’s money — so trust is the biggest component,” he stated. While he has formed relationships and signed agreements with his own longtime suppliers, he admitted to being cautious with new clients, who come under greater scrutiny.
He also stressed the importance of checking goods multiple times — whether the diamonds are part of an incoming order, returned from clients, or closeouts. “We double-, triple-, even quadruple-check every parcel that comes in,” said Niv. “Everything goes through the chemical vapor deposition (CVD) machine” to identify any lab-grown diamonds.
While technology has expedited verification, he feels it is not fair to pass the price on to his customers. “It is my responsibility — not theirs.”
Social media has been an effective tool for Niv. “It enables you to educate your customers, and that enhances your reputation. This is even more important today when you can buy jewelry by pressing a button on your iPhone. You need a good name out there.”
Chicago: Compliance is key
Trust is a “huge” factor for Jai Bhansali, vice president of sales at Diagem, a wholesaler based in Chicago, Illinois.
“We only deal with vendors whose paperwork is in order and who have provided us with signed KP certificates to be sure that all the diamonds we receive are ethically sourced to the best of our knowledge,” he declared.
While he is willing to deal with companies that don’t have a long-established relationship in place, there is a caveat: He must be aware of their reputation and reliability. “We really do not look into any sources where there are any questions,” he stressed. He dismissed any notion of using a less-than-reliable source that might offer lower costs. “I’m not complaining,” he said. “At least I can sleep at night.”
Bhansali encourages clients to question whether the diamonds are ethically sourced. “They need to know that we are compliant with industry standards and practices, as well as anti-money laundering (AML) legislation. That knowledge allows them to be confident and comfortable selling our product — as well as truthful in sharing those guarantees with their own retail clients.”
Of course, he added, “it would be much better if everyone were on the same playing field regarding ethical compliance. Eventually those who engage in unethical or substandard practices will hurt the industry as a whole. Ethical sourcing is important for the long-term sustainability of our industry.”
Article from the Rapaport Magazine - June 2019. To subscribe click here.