Diamond is among the most wonderful substances known to man. From regular jewellery to medical equipment, diamonds are used in many instances. A diamond dealer gets their supply by contacting diamond mine owners and further sells these diamonds to retailers or jewellers.
In natural form, these diamonds don't have a proper shape. The diamond cutter's job is to cut and polish the diamonds and make them look like most of us know. If you're already studying gemology and have an interest in this line, you can run a successful business as a diamond trader.
Besides in-depth knowledge of the diamond market, you should also consider the risk factor. You need to work with trusted people as diamond dealers, traders, and brokers have significant stakes and earn a significant profit.
Did you know?
India's diamond industry is worth USD 23 billion (approximately ₹1753 billion), and it forms around 7% of India's GDP.
Tips on Starting a Diamond Business in India
Understand the Market
Researching the market is always vital, no matter what business you're in. Talking about the diamond market, you will have to research a lot of factors, but the vital ones are listed below:
- How many diamond investors are there in your locality, and how much do they roughly invest?
- What are various types of diamond businesses available?
- What's the diamond market size in your area, and which nearby markets can you target as a diamond dealer?
- How many varieties of diamonds are available in your local market? Is there something new that you can introduce?
- In what circumstances may you face losses, and what are your loss-recovery strategies?
Once you consolidate your connections in the market, you'll be able to decide your niche and predict investments, chances of success, timer period, market fluctuations, etc.
Increase Your Expertise
Without in-depth knowledge about diamonds, you can't run a diamonds business. If you're qualified enough, then it's great for you, and if you already have some experience working under somebody else, it's even better.
You need to be an expert in estimating the costs of diamonds in various forms. Remember that your competitors haven't established businesses in the same domain without expertise. So, you'll have to do the same.
Decide the Model and Size of Your Business
You should have a strong understanding of how much funds you'll need to run a business of your scale. So, before organising your business, you should have proper estimations in your hand.
- Will you begin with some local jewellers?
- Will you run your business online as well?
- How confident are you in terms of dominating the competition?
- How much funding is readily available?
- Are you planning to onboard team members?
- How much commission will you give to the diamond artists?
Beware of the Competition
The diamond business is very cutthroat and well-established, and many college degrees are mass training students to work in it. So, competition remains a huge factor.
You'll have to lay a lot of emphasis on marketing to beat the competition. You can even start collaborating with an established company and do in-depth research.
Set a Business Model
Diamond trading is undoubtedly a very big business. You need to be safe and always follow all vital legal procedures while buying/selling diamonds. It includes having a legal team, agreements with clients and suppliers, written documents confirming commission rates for brokers, mediators, etc.
If you're looking at the success of launching your company and making the most profits, then you have to make sure you do your cost and economic analysis correctly. You should attempt as hard as you can to apply international best practices to the field you decide to start a business.
The trading business in diamonds has roots that go back to the barter trade. Therefore, when planning your cost and economic analysis, conduct a thorough market analysis of the money required to purchase diamonds and the equipment or facility required to manage the business.
It is important to include the securities and travel expenses in analysing the costs of the beginning of a diamond trading business. Be aware that you could benefit from a network and economies of scale. In the end, when you're unfamiliar with this kind of business that requires capital, you should seek out experts who can assist you in completing a thorough economic analysis.
Should You Get a Franchise or Begin From Scratch?
Diamond trading business is among the companies that have not fully embraced franchising due to obvious reasons. If you're thinking of starting your diamond trading business, there is no other choice other than to start from the starting point. Don't be scared to begin from the beginning because you could work with someone already working in the field to get the basics of the trade and invest carefully.
One of the biggest threats you will be confronted with when you start your diamond trading business, especially if you're getting started on a small scale, is the competition from large players in the business that includes mine-to-market companies. A diamond could be taken from the ground to be displayed in the jewellers' display case and all under one company's control.
Learn About the Best Insurance Policies for You
It is essential to establish an insurance budget and possibly seek an insurance agent to help you select the most appropriate and effective insurance policy to protect your diamond-trading company.
Secure Your Intellectual Property
Are you thinking of setting up a diamond trade company? You may not have to apply trademarks or intellectual property protection because the nature of your business allows you to operate it without having a reason to sue anyone in court for infringement of the intellectual property rights of your company.
Also Read: An Overview of India’s Best Clothing Brands
Meet Your Technical and Personnel Requirements
There are no specific technologies or equipment required to operate this kind of business, except for secure shelves and software for retail. Additionally, you'll require computers/laptops with proper internet access, phones, office furniture, etc.
In the case of leasing or buying outright a store, the decision will depend on your financial situation. The reality is to remain on the safer side. It's recommended to start with a short-term lease or rent while evaluating the possibility of operating the business from one fixed place.
If everything goes the way you planned, opt for a long lease for a specific period or outright purchase the building. Search for a new place if things don't work out for you while operating from your existing place.
After knowing everything about how to start a diamond business, we would like to say that the diamond business can never be your side game. Undoubtedly there are chances of great profit margins, but you need to touch the depths of the market to reach that level. Your knowledge and connections make the biggest impact in the diamond trading business, which depends on your marketing skills.