Frank Murdocca prefers not to be caught in the middle of any situation, particularly when it comes to business.
As a wholesaler, he and a partner started Traders Jewellery in 1998 as the middlemen, importing diamond jewellery into Canada from U.S. and Chinese suppliers. About a decade later, though, the world was in recovery mode from the Great Recession, jewellery retailers were taking a very close look at their bottom lines, and Murdocca decided he needed to adjust his business model.
“I saw the market changing to where there was no room for a middleman anymore,” Murdocca says. “Retailers wanted to go to the source and not deal with an importer. I saw margins getting tighter and tighter, and customers getting more and more fickle.”
Buying out his partner in 2009, Murdocca took the Toronto-based company in a different direction, all the way to Los Angeles, so to speak. Amden Jewelry, one of Traders’ long-time suppliers, offered to enter into an exclusive deal with Murdocca.
The result is Amden-Traders Jewellery, a partnership comprising Murdocca and Amden founders, brothers Pat and Pasqual Javaheri, and Navid Gholian. The three formed Amden Jewelry as a division of Ital Gold, a manufacturer of gold mountings co-founded 35 years ago by Pat’s and Pasqual’s father.
The idea was to use Ital Gold’s manufacturing know-how to create mid- to high-end fashion diamond jewellery, which happened to be an area Murdocca had already identified as a niche in the Canadian market. Today, non-bridal diamond pieces account for 75 to 80 per cent of Amden-Traders’ business in Canada.
Since forming the partnership, the quartet has honed in on a growing trend among jewellery retailers: private label. Recognizing the restrictions and requirements some brands place on their clients, the partners set out to help retailers promote their own brand identity and, in the process, distance themselves from the pricing wars among stores offering the same products. Enter Amden-Traders’ ‘Seamless’ collection. The patent-pending design allows large stones to be set on the top and sides of a ring, creating a seamless appearance.
“We position it as private label and encourage retailers to brand it under their own name,” Murdocca says.
“Our thinking was to help build something around the company the client is putting all their efforts into, namely their own. We thought, ‘It’s their baby, so let’s give them something that can contribute to their baby under their own umbrella.’”
With rough diamond prices out of sync with polished and sightholders refusing goods, there’s no doubt the industry is going through some very tough times. Murdocca says the cost of production is the biggest challenge at the moment. Although Amden’s main manufacturing facility is in Los Angeles, it also has a small factory in Hong Kong that produces some collections to maintain cost efficiency. The sheer volume of diamonds Amden goes through in a production run also makes for some challenges that can trickle down to retailers in the form of higher prices. The goal is to minimize the impact as much as possible to maintain a happy client base.
“We can buy a lot of diamonds, but we have to buy smart to cover ourselves when there is a shift in the market,” Murdocca explains. “We can’t keep changing our prices, as retailers find that extremely frustrating… If we sell an item today that costs a retailer $2000, dynamics in the diamond trade could change six months from now and it might cost us 20 per cent more to manufacture. Yet, we still have to stick to that $2000 price or increase it very, very slightly. If a customer has a program in their store, it’s hard for them to absorb the fluctuation in ?the cost.”
So what’s the mood among consumers looking for mid- to high-end jewellery? Murdocca says his clients are reporting a slight dip in sales, although they are selling higher-ticket items.
“Has it become more challenging? Yes, but we’re trying to combat the difficulties of doing business and, at the same time, sustain what we do and what we make.”
Not quite the middleman anymore, but certainly aiming for a middle ground.
All information listed in this section was submitted by Amden-Traders Jewellery.
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