Secondary market research

[rockhound777]

Hello,

Im fairly new to the gem world, and am trying to do some market research before I start a gem business. Can anyone point me in the right direction for facts and figures for gem and crystal sales in Australia?

Many thanks in advance,

Ben

[mehoose]

Well, can't help with your question but I have a few for you...which might narrow things down for someone else who might be able to help.

What materials exactly are you considering and quality of to have on offer?
Rough, facet or cab? Finished, facet or cab? Big honking high end specimens or the other end of the scale?

Are you able to take high quality photos if you're thinking of being web based?

What are your qualifications?
 Yes I know of a few folk who don't have qual's who do buy and sell but for some materials you really should be able to ascertain whether it's natural or man made and if natural, do you have the knowledge to detect treatments?

I'm not trying to say don't do it but these are some things you'll need to take into consideration.

[Jimnyjerry]

Going to a local large gem and lapidary show will give you an idea of what is being offered etc. Look at what is being offered on ebay for Australia. There are also facebook pages that are of interest.

If you are just doing it online that cuts out travel, camping/accomodation and insurance as a trader etc. but you miss out on the interaction with real people.

 

[mehoose]

Absolutely Jer.

What I will add... and this is a personal observation... is that in the few years I've been awol, about half of the dealers that I'd bookmarked for quality gem rough have disappeared. Quite a few of these are/were actually from the Country of gem source so if they were struggling for supplies or sales it means those next in line would be struggling too. I'm not even looking at the political side of things(some countries are now only releasing finished items instead of rough).

It is definitely an area of constant ups and downs, new finds and depleted sources. I did hear a rumour that the Chinese had backed off from buying a majority of goods but how reliable that is is anyone's guess.

When you say fairly new to the gem world, what is your experience/involvement so far?

[rockhound777]

Thanks guys,

I have a diploma in gemology, have cut cabochons for a 100hrs or so, had a few lessons in faceting, and have some friends in the industry that can supply cut/rough/specimens to get me started. Basically im doing NEIS (new enterprise incentive scheme) to get a business started, and formulating a business plan as to what direction to head in.  Im looking for current trends in the industry, how much people spend on gemstones/crystals etc in various states, or nationwide etc. Would definitely appreciate advice as to what anyone would do if they were starting out.

I am looking at starting a small online store while I get my cutting skills up to scratch, maybe doing a market stall or two.

Tnanks in advance,


Ben

[Aussie Sapphire]

Would definitely appreciate advice as to what anyone would do if they were starting out.

I am looking at starting a small online store while I get my cutting skills up to scratch, maybe doing a market stall or two.

Ben

My main advice is start small so if it goes pear shaped you have not lost too much.  This is a tough game !!!  For cut stones, there is a LOT of competition and most of it will have much lower costs to you. 

So do you differentiate on quality (eg. Paul Fenselau or Doug Menadue but those guys have years of experience and are very highly skilled) or are you going for the cheaper end of the market (but the overseas cutters will beat you on price, speed and labour costs).

Do you differentiate on source and type of material?  We did ok when we were selling sapphires from our own mine and we could tell that story but even then it took massive and constant work to have any chance of competing with others in the market. 

Dont want to be a downer but to build something up in this industry to be a viable business is really difficult.

Good quality rough is a different story - lots of demand there from the hobbyist cutters.  But you need good connections to source well.

I doubt you will get the kinds of stats you need for your business plan.  A lot of this industry operates on cash and much of it is not seen by the tax man (a bit of a bug bear of ours as our tax bill is pretty damn big).  Some of the bigger dealers who operate at gem shows now have credit card machines so that is accounted for but a lot is still cash under the table so reliable industry statistics just dont exist as far as I know.  Even when we were in the game, any official government report on gem mining only ever counted or consulted the couple of large publicly listed (and usually short-lived) companies and took very little account of smaller operators who were apparently invisible because we were not on the stock exchange. 

Cheers
Leah

[Woolshedjack]

Just my thoughts based on experience here. I did the NEIS scheme some years ago and developed a small gold mining company, and now also dabbling in gemstone mining, cutting and more. I am also a qualified gold and silversmith. The NEIS scheme is all about writing your business plan and doing financial modelling for your new business. It's pretty easy to get through it but I can tell you that whatever you estimate you will make in the first year, you can cut by 50% at least. Small mining and gem enterprises are extremely difficult to make work profitably. And you will work harder than you ever have before. I worked 60 hours plus per week in the first year, and made little money. Now, years later, and after a number of part time jobs to supplement income to feed the family, I can say I have a successful and viable business. Neis is good as it gives you start up funding, but the real crunch will come when that funding ends. You then need to be able to generate a profit on a regular basis, to pay the usual bills, and put some money in your pocket. I would suggest you need to do a little more than just cutting stones and selling them. maybe study jewellery making or silversmithing to add to what you do. Online store is a good idea, but you need to do a lot of markets on a regular basis to build a client base. For industry stats go to the  Australian Bureau of Statistics website and see what is in there.Gee here I am giving away secrets. Good Luck.

[rockhound777]

Thanks Guys and Gals


I am finding it tough, and many hours of work and training have led to very little results in terms of cash in any form!  except when it comes to helping other people lift stupidly heavy bags of rough and quartz chunks etc....

I do have a friend who has good stock and rough on hand,  and am leaning towards sales online and to crystal shops.  I wasnt quite prepared for the amount of metaphysical speak i have encountered to say the least!    Not being that way inclined,  im still working out how i can be in the crystal game and not know that stuff.  Any ideas?

[calxoddity]

When I hear or read about people claiming that crystals give you sparkly auras or realign your chakras, I feel an overpowering urge to puke - especially when they're referring to fake citrine or an alleged quartz crystal that's been machine shaped.

[Aussie Sapphire]

...  I wasnt quite prepared for the amount of metaphysical speak i have encountered to say the least!    Not being that way inclined,  im still working out how i can be in the crystal game and not know that stuff.  Any ideas?

We had a customer once who used to buy our low grade corundum for healing purposes via some weird and scammy "medical device".  Check it out here if you want a laugh:  http://medicahealth.org/crystal-light-therapy/

Our approach was to not buy into the new age stuff at all but more difficult in a retail setting I suppose when you are confronted by a true believer.

I will say that one of the MOST popular (by far) threads here on ALF was the (at time, heated) discussion on divining.

This stuff certainly has very strong schools of thought on both sides of the argument. I tend to lean to the sceptical side of the equation but if they wanted to buy my crystal(s) for some new age reason, then I would be happy to take their money.

cheers
Leah

[southerly]

Most of the market sellers have at least learned to speak the metaphysical language because that crowd pays the bills. There are many mines and sellers who are only viable because of the new age market who take up the lower quality goods, that allows them to stay in business and supply you and me. You could employ someone on your stall if you run one who could show you the ropes for a few weeks. You don't have to be a believer in order to allow others to have their beliefs, it's call tollarence.

[Aussie Sapphire]

There are many mines and sellers who are only viable because of the new age market who take up the lower quality goods, that allows them to stay in business and supply you and me.

Yes - we were certainly appreciative of the opportunity to sell low grade corundum that had very little market elsewhere.  I was uncomfortable about some of the healing claims they were making for the device but I suppose the placebo effect is measurably effective on some things.

cheers
Leah

[Lapis Lupinus]

Well Calx, I reckon my chakras realign when I find a nice crystal because I suddenly stand up straight with my hands stretched out above my head towards the sun so that I can peer into the stone. That pain I felt when I was bent over for hours on end just disappears!

[rockhound777]

thanks again for all the replies


I just returned from a little trip out the back of oberon with a box full of "metaphysical grade" quartz clusters that ill probably make more money on than the bag of gems ive been trying to sell recently, so good point!

Gem testing and certificates seem to be coming up too as a source of income.  What are the ins and outs of providing this service though?  I have access to the standard equipment needed for RI's SG Microscope etc and another gemologist to sign off, but  would anyone trust a cert from an unknown gemologist team? 

now to have a look at the benefits of sack grade corundum on my chakras

[rockhound777]

"We had a customer once who used to buy our low grade corundum for healing purposes via some weird and scammy "medical device".  Check it out here if you want a laugh:  http://medicahealth.org/crystal-light-therapy/"

^^^

i dont even know where to begin with their claims...... *cringe*

They obviously consulted only the best Scienticians