Tobias Kormind (L), co-founder, Seventy Seven Diamonds on why he’s better than all Bond Street jewellers
From your knickers to homes, you can buy everything on the internet. But would you consider buying an engagement ring online?
If not, here’s why you should. Seventy Seven Diamonds, a London-based online jewellery retailer claims to have the “largest collection of certified diamonds in the world” and sells at prices 60% lower than a Bond Street jeweller.
The company takes its name from the date of the first recorded engagement ring in 1477 and is known to have sold its rocks to everyone from supermodels to oligarchs. It boasts a genuine collection of over 200,000 loose diamonds.
Based in Mayfair, the online boutique is on track to achieve £10m in sales this year.
Is it all too good to be true? We ask one of the founders Tobias Kormind for answers:
How did you come up with the idea of setting up an online jewellery business?
I was working in Morgan Stanley as an investment banker but online businesses always caught my fancy. So, I set up an online marketing agency called 77Agency. Around that time, my sister married into a big diamond manufacturing family and my friends started approaching me to buy diamonds.
This chain of events got me thinking and I set about launching Seventy Seven Diamonds because combining the opportunity of the internet and diamond was a no brainer. The diamond industry at the time was so archaic and there wasn’t much transparency in the diamond market. So, I knew a business like this would do well. I launched the website as a hobby in 2005 and started working on it full time by 2008.
How did you start getting customers in?
The Financial Times were kind enough to write about us as an up and coming diamond retailer. I was running the online marketing agency and had a few people writing about us too. People started calling, the pricing was compelling that was the initial driver.
How did you grow the business?
As with any new business there were a number of angles which we had to consider, namely finance, supply and product. Initially the financing came from loans from me and co-founder Vadim Weinig and then through its own cashflow.
The original ring designs were from us but we also had early support from jewellery designers at famous luxury jewellery brands, and that led to our own in-house Central Saint Martins-educated design team. Our experience in online marketing was also critical.
We’ve grown from that small start up which was dependent on personal funding to a company with forecast turnover of £10m this year. Also, we’ve got the largest collection of Gemological Institute Of America certificated diamonds in the world.
In essence, it’s been a combination of hard work, well-connected stakeholders and a bit of luck on the side!
How have you got access to the world’s diamond manufacturers?
We have been very fortunate that many doors have been opened for us. But once those doors were opened we worked hard to keep them open, and to convert those introductions into a solid channels for our business. We have our own in-house technology team and we have worked with suppliers to connect electronically with their stock, and as our reputation has grown this task has, inevitably, become a lot easier.
How can you justify your business model if you sell at a price that is 60% cheaper than the High Street?
Even at a 60% discount to high street prices, we still have large enough margins to enable us to grow our business and produce jewellery of the highest quality. But this also requires lower operating costs, more efficient diamond sourcing and a customer base that’ll refer us to their friends.
A key reason for cheaper prices is that we cut out the middleman and hence save customers up to 60% on the retail price.
Furthermore, all of our diamonds are verified by the most respected third party diamond certificators including Gemological Institute Of America and American Gem Society which sends out clear signals of our quality product offering.
And consequently our customer service, means that we see 35-40% of sales coming from repeat or referred business.
How do you keep costs low?
In terms of examples, we conduct price comparisons with leading luxury brands as well as high street names on a quarterly basis, across a range of like for like diamonds to ensure that we can back this claim.
Traditionally the value of diamonds has been kept intentionally murky and the value chain was long and multi-faceted. But the growth of the internet has brought real power to consumers. We are shortening the value chain by sourcing our diamonds directly from the manufacturer, and still giving our customer’s the traditional luxury bespoke experience. That has to be an unbeatable offer that will ensure we not only survive, but thrive.
Great! Thanks for your time Tobias!
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