What is diamond trading?
Diamond trading is a lucrative business that is akin to commodity trading. In India, the scope of diamond trading is massive. India is the world’s largest cutting and polishing centre for diamonds. The cutting and polishing industry is well supported by government policies. India is deemed to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour. In such a scenario, starting a diamond trading business would be an excellent choice!
Do you wish to start a diamond trading business?
Here’s what diamond traders do:
Diamond traders buy and sell various quantities and qualities of diamonds with the intention of generating a profit from the trade. Many traders are employed by mining companies, manufacturers and diamond distribution firms. In some countries, these traders are referred to as brokers since they are helping them sell their diamond inventories instead of maintaining their own stock.
Other sets of diamantaires or diamond traders are the ones who maintain their own stock of diamonds, try to get pricing benefits through bulk buying and thereafter, trade.
Do you know that you can make a good amount of money from diamond trading? Diamond trading business is one business that is not common in most parts of the world, but it has a very high profitability.
If you intend to start your own diamond trading business, then you must learn the subject of diamond assortment, grading, valuation and practical trading techniques.The truth is that only someone who can differentiate between various grades and quality of diamond will be able to make it really big and sustain in this line of business.
It is important to state that starting a diamond trading business requires a reasonable startup capital, and the ability to network and market high profile clients in the society. Sincerely, diamond is considered to be a luxurious commodity and the people that purchase it are those who are well to do. That is the reason why you must be prepared to target this class of people if you truly want your diamond trading business to succeed.
There are multiple avenues in terms of how much capital is required to start a diamond trading business. In fact, if you do not want to invest upfront, there are ways to start a diamond business without any investment as well. These aspects are covered in our Polished Diamond Graduate course at J K Diamonds Institute of Gems & Jewelry.
What do you need to know to become a successful diamond trader?
Understand the market:
Before an attempt to start any business, you must study the market. Carrying out a market research will:
- Help you plan your business goals
You may ideally decide to start small and run the diamond business in iteration to avoid any adverse investment decisions.
- Identify the types of diamonds you want to start dealing in
Different traders deal in different qualities, sizes, shapes of diamonds depending on their interest, sources and selling abilities. It would be prudent to gauge which niche do you want to start trading as trying to deal in all types of diamonds will be challenging without huge capital.
- Identify potential risks & opportunities
There are risks associated in the diamond trade such as credit risks, fake lab reports, wrong information mentioned in even original lab reports, etc. This can be an opportunity as well as it allows your customers to trust you if you can maintain extremely high ethical standards which is rare to find today.
- Improve your marketing strategies
For any business to flourish, you need to have some great marketing strategies. This would include good interpersonal skills, networking skills and promotional mindset. More so in the diamond trading which is highly based on trust.
- Help in establishing a unique selling point
As discussed above, establishing yourself in a niche segment of diamond trading will help you create a unique selling point for your diamond business. Another aspect would be providing value added services to your customers. This is discussed in detail below.
Build your expertise
You need to have a lot of information about diamonds. You must have the right knowledge about diamond grading, assorting, synthetic diamonds, valuation, mounted jewelry etc. Well, when it comes to diamond grading, a general assumption is – ‘Know the 4 C’s’. However, acquiring the knowledge of the 4 C’s is still half knowledge. The market is much wider and it is evolving at a fast-pace. Therefore, just knowing the 4 C’s is not enough.
In the market scenario, the quality, as well as the valuation of diamonds, depend upon factors way beyond the 4Cs. The diamond shapes and facets such as culet, girdle, etc. are all considered in the diamond market as quality parameters which are not taken into consideration by the 4Cs. The demand and supply factors, labor cost, changing and ever-evolving technology, regional differences, etc. all play a part in the determination of the value of a diamond. Hence, J K Diamonds Institute of Gems & Jewelry has introduced the concept of 7Cs and 7S’ to determine the quality as well as the price of diamonds keeping in mind practical market reality. After completing your course, try to intern or do a job at a diamond or jewelry company. This will help you get a deeper understanding of the business.
Set Up a business model:
Start small! And keep expanding gradually. Deciding the size and mode of your diamond business will help you in the initial stage of collecting funds for your business. Before you start your own business, you must have a plan in place- how will you organise your business and what will be the size of your business. Important questions to address: Will you also choose e-commerce platforms to do your business making it an omni channel business? Which category of diamonds will you deal in? How many carats of stock would you be able to sell in a week or month? What are your sources of diamonds? Are they genuine? How will you generate funds? List down all the questions and make sure you have answers to most of them before you start your diamond trading business.
Be aware of the competition:
Competition in the diamond industry has always existed, being a closed environment with some entry barriers. Competition is no different than any other conventional industry. . The industry is well-equipped and fully established. Many skilled and experienced traders are a part of the industry and companies have invested in multiple resources to grow their business. If you want to outrank this competition and achieve success in the diamond trading business, you must learn secrets from the industry which will help you form unique and innovative strategies.
Like any other industry, there are always companies who are not able to sustain due to unethical standards maintained by them, or baseless claims of diamond quality as well as wrong financial decisions. These companies eventually get filtered out of the trade resulting in opportunities for new entrants.
Learn how to swim through the competition and establish yourself in the diamond world. JK Diamonds Institute has trainers who are professionals with decades of experience from the industry. They provide insights like no other coaching center will.
Here’s one of the most important aspects of any business! Generation of good quality leads who are most likely to convert and drive sales for your diamond trading business. In this process, your networking and marketing skills come in handy. Connect with a maximum number of people to learn the process of generating leads especially and specifically for the diamond trading business. You can start by doing consumer research and be active on all those platforms where your audience is present. On the web, your potential clients will easily be able to locate you and contact you. The initial orders matter the most- First 10 orders are the most challenging. Put strong efforts in closing your first 10 customers. The rest will follow.
Finding the Right Supplier
You need to get your sources right. . Now, this business involves a bit of risk and to ensure that you’re carrying out safe trade- find out which supplier is trustworthy. You need to verify the quality of diamonds that they claim to be selling. Build a strong connection with them.. You must choose them wisely. Personal communication is one way to do so. Apart from that, reviews from other people can also help.
Take your business online!
With the ongoing pandemic, every business has made its place online. The opportunities on the internet get doubled because almost everyone is active on the internet. Though a large part of the diamond industry conducts business traditionally, the online disruption has begun. You see several diamond aggregators allowing diamond traders to trade on their platforms. Several larger diamond houses have launched their own platform and website.
However, one must be warned that online presence is necessary, but not for sales. Online presence complements your business as an overall business. Hence if your only motive from creating and establishing an online presence is sales and profit, you may fail miserably. Consider it as a branch of your existing marketing effort. The times are changing and people are moving from stores to online platforms to set up their business. To start a diamond trading business online, you’ll need to set up a user-friendly website that is glitch-free. Or you can also create an efficient app. Appoint a tech expert to ensure smooth functioning of your business online.
Marketing & Promotion
Marketing holds one of the prime spots if we think of the ‘essentials of starting a business’. In order to open a diamond trading business, you must find the people who can serve as a loyal customer base and a network of enthusiasts who can help you with marketing your diamond business. The best way to market your diamond trading business is by being in the market. There are several diamond markets across the world, in Mumbai, New York, Antwerp, Hong Kong, among many others.
By being inside the market naturally gives you momentum in terms of finding customers. You may propagate your diamond trading business easily on social media platforms by creating business accounts on Instagram and Facebook. Reach your right audience through these channels. Infact, Linkedin is a very good platform to find connections for export businesses.
Market your website as much as you can. Marketing is an investment. Ensure that the SEO of your site is updated regularly. You can also set up a WhatsApp Business Profile for keeping the customers intact and providing them with various personalised offers according to their needs. Leverage on different platforms such as Learnathon, Linkedin, to find new suppliers and customers. On Learnathon, you can build a credible network of people who belong to the gems and jewellery industry. This platform gives you regular industry updates which help you understand risks and opportunities. Rapnet is another platform that connects the diamond world, a must for diamond traders to analyse market price movements.
To launch a successful career in the diamond trading industry, pursue a comprehensive and 100% practical course in diamond grading.