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Tuesday, Nov 28, 2023

JEWELRY—Going for the Gold

JewelryFactory.com Year Founded: 1999 Core Business: Online retail jewelry Revenue in 2000: $875,000 Number of Employees in 2000: 5 Goal: To build up retail business. Driving Force: Demand for fine jewelry and convenience Bruce spiegel turned the jewelry factory into jewelryfactory.com two years ago and is still hoping the trip from bricks and mortar to the internet is a safe one Every dot-com retailer has a story to tell about where they came from. Not that many, however, have roots as deep as JewelryFactory.com’s. But you can trace the lineage of the two-year-old North Hollywood-based company all the way back to 1975 and a small office in downtown Los Angeles’ jewelry district. That’s the intimate community of wholesale and retail jewelers that has seen its industry morph along with the personal computer, the Internet and online shopping. The Jewelry Factory, the brick and mortar version, was founded by Bruce Spiegel’s father Sam that year. Ben took over the company in 1985, just in time to witness the decline of the wholesale jewelry industry in central Los Angeles as the risks of doing business began to drive long-time businesses out of the city and into safer areas. “A worker of ours was attacked downtown and I said, ‘That’s it, this is no place for us to do business anymore,”‘ said Spiegel. So he moved the wholesale business to the Valley. At the same time he established a by-appointment-only retail store in an otherwise nondescript industrial office park Business took a downturn turn shortly thereafter along with the rest of the Southern California economy as the company’s largest, and for all intents and purposes, only wholesale customer went belly up. That’s when Spiegel decided to broaden the scope of the business. “We learned the lesson the hard way that we were doing most of our business with one customer, and that just wasn’t going to work anymore,” said Spiegel. The company recovered, slowly, but it’s a very different company today. Now, instead of one wholesale customer, Spiegel works with many spread out across the country. The bulk of his revenues come from the manufacturing and distribution of gold and silver medical identification bracelets, In addition, the company also manufactures jewelry and commemorative items for the National Hot Rod Association, for which Jewelry Factory has exclusive licensing rights. “What we did was we turned the company from relying on one wholesaler to a bunch of different entities and it’s gotten us through beautifully,” said Spiegel. Along came the Internet, and Spiegel began offering gold and silver jewelry on line. “I was very skeptical at first. I believed it was going to be good, but I was still skeptical,” said Spiegel. “I didn’t want to just build an online store. I wanted it to be stronger than that.” So, with the help of Los Angeles-based iNet Web Solutions he built a Web site that included partnerships with other wholesalers around the country. That spelled the end of the old Jewelry Factory and the new JewelryFactory.com. Four months later, Spiegel sold his first diamond on line. “I couldn’t believe it,” said Spiegel. “That’s when I knew that there was a real market for this, that people would trust us to send them exactly what it was they saw on line, even if they didn’t get to see it first.” Barbara Friedman, owner of Barbara Friedman & Associates, an accounting firm in Encino, did business face to face with Spiegel for about three years before she took the plunge and pulled up his Web site. She said she wasn’t a die-hard online shopper and, had she not already done business with Spiegel in person, she likely would not have bothered with his Web site. “I was really impressed,” said Friedman, who went on line for a gift for a girlfriend. “I do a lot of catalogue shopping and I usually don’t like going on line, but with the jewelry it was much easier. The gift came wrapped in about two days and it was exactly the size, color and quality it was supposed to be.” Revenues for JewelryFactory.com for 2000 were $875,000. Spiegel said he anticipates those numbers to dip because of the economic slowdown. The site offers a link where customers can design their own engagement rings, another that offers a free ring sizing kit, and another specializing in children’s jewelry. As with so many dot-com success stories, Spiegel’s “jewelry place in cyberspace” had a relatively good chance for survival because of the company’s history, contacts and word-of-mouth support already in place before the first customer clicked through. But that doesn’t mean Spiegel won’t have to keep the content fresh and his eye on the market, especially when everywhere he’s looked in the last 18 months, dot-com death marches have become regularly scheduled events in the tech sector. Bob Bowker, co-founder of iNet, agreed. “There is no such thing as brand loyalty on the Internet,” said Bowker. “The Internet has never been and should never be anything other than one spoke in a business plan. In the seven years we’ve been doing this, we’ve found most successes are those businesses that already had an inventory of products and fulfillment procedures in place.” “The brick and mortar isn’t the determining factor, but it’s important,” said Bowker. “But what works is a company like Bruce’s that already knows how to get around, has suppliers in place, and has distribution in place.” Spiegel said most customers are men because they find the Internet takes the guesswork out of shopping, and second, relieves the agony of pacing a jewelry showroom. “What I’m learning about the online end of our business is that men just really don’t like shopping for jewelry, especially engagement rings. You should see the men’s faces when they come into our showroom,” said Spiegel. “They don’t really want to be there. That’s the women getting them in there. So when it comes to gifts, they love the option and the privacy of going on line.”

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