Diamond standard for transition to online emporium
Inheriting the family diamond business sounds like a dream come true. But for Gus Hashem, the transition from suburban jewellery outfit to international online diamond behemoth has been a long journey.
Hashem's father, Simon, established the business in Lebanon in 1977. The family migrated to Australia in 1988, where Hashem snr continued with the business until 2006 when Gus joined it. He had previously worked in financial services, but had always had a passion for jewellery.
"We didn't have a succession plan, it was just a small business. When I joined I worked on developing the website and moved the business into the [Sydney] CBD. We rebranded as Diamond Emporium and launched the site in 2010," Gus says.
He also changed the focus of the business to selling diamond engagement rings. "Dad's business was more about handmade chains, and that market was dwindling."
Gus says the enterprise has experienced double-digit growth since 2010 and expects further growth in coming years. "People think retail is tough but there are great opportunities for businesses willing to make changes. But businesses like ours that are based on technology have to run like a well-oiled machine."
For Diamond Emporium, this started with moving away from a bricks-and-mortar business model with high overheads to a largely online offering. Gus purposely did not want to expand the business through shopping centres to keep costs low.
"We do have a city office where we meet clients by appointment," he says, explaining that this largely eliminates tyre-kicker customers who just come in to window shop without buying, but who take up staff time, which is costly.
"Our main focus is now online. I think we were one of the first fully functional websites where you could view and select diamonds and engagement rings," Gus says.
"The key has been providing transparency around pricing. All our prices are available online and discounted from the full retail price."
Gus started selling excess stock from the business on eBay before the website was up and running. But he soon realised a time-limited auction-based business model wasn't the right way to sell precious stones.
A point of difference has been cutting out the middlemen in the diamond industry. He buys from wholesalers who buy directly from diamond mines. This generates savings for the business, which are passed on to customers.
"This gives us an advantage locally and internationally. People think they can get things cheaper in the US, but we're just as competitive [on price]. We can price match and few family businesses can make that claim."
Gus says he has always seen the website as a proper business and has not been afraid to spend money on it - he says he's spent hundreds of thousands of dollars on it since launching to create a site that looks as high end as the diamonds he sells.
"Most people do their research online and if you're selling luxury items you have to present in a luxury way. Many of our competitors have missed that point, but it works well for us."
Gus acknowledges it was difficult managing the transition of ownership from his father to himself. Simon was initially sceptical about moving to an online model and had never used a computer. But when inquiries started to come in from the online side of the operation he became more supportive of Gus' efforts. But he still struggles with the idea that people would buy something of value over the internet.
"It wasn't until we sold something online for $8000 to a client in the US that he got it," says Gus.
Hashem senior is still involved in the enterprise, looking after aspects of production.
Gus' view is that there are still huge opportunities to develop the business and that the internet is in its infancy. "It's still in its early days. At the moment we're trying to grow market share in a market dominated by big players. We also have plans to expand the business in Brisbane and Melbourne where we want to set up boutique offices similar to the one we have in Sydney, where people can come in and discuss their design requirements."
He is also in the process of revamping the site and building functionality so that people can design and customise their wedding bands online.
"We're looking to expand more into fine jewellery in the next 12 months and we're planning some exciting new developments, including more advertising and marketing," Gus says.