Posted on: 19-01-05 13:22:15
Quote:
Orginally posted by DiogenestheCynic
Help,
I would like to import diamond jewelry from India and sell it here to retailers. How do I go about it?
Questions:
1. How do I find the retailers that would be willing to buy the stuff?
2. What are the import duty rates? I tried looking for diamond jewelry on the CRA and the CBSA websites and from what I could understand it says "free". Obviously I am missing something. What is it?
3. What should be the expected profit margin on such jewelry?
4. Which is better and why:
a. To take orders from retailers and make and supply product as per requirement
or
b. Import readymade jewelry and find a market for it.
Any other information you think is necessary. Thanks in advance.
I am amazed (though may be wrongly) that an intelligent guy like you is asking such a question.
In case you know even a little bit about this trade, you will know that this trade works on the principal - the lesser disclosed, the better it is. A major portion of this trade is done off records and without any GST involved (infact this is exactly the kind of trade why the govt levies GST - otherwise they would have just done with PST if all they wanted to do is collect taxes - though GST the govt comes to know how the same thing has moved from start to final consumption).
Some of my friends and relations are in this trade, and I know how much they smuggle into the country (now smuggling can be of any kind, right? A diamond bag worth say 20 carats and particular clarity and worth say $100k can be declared as same no of pieces but less caratage and less clarity and therefore worth only say 20 k).
Moreover, how do you expect to do this trade unless you have technical knowledge about the goods - to a professional a diamond may be worth 20K, while to a layman, it is just a stone and worth what his friend whom he would trust, calls it worth!
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
Quote:
Orginally posted by chandresh
I am amazed (though may be wrongly) that an intelligent guy like you is asking such a question.
Don't be amazed.
Quote:
Orginally posted by chandresh
In case you know even a little bit about this trade, you will know that this trade works on the principal - the lesser disclosed, the better it is.
I agree that in any trade, the lesser disclosed the better. However, disclosure of some sort is mandatory if one is to involve himself in this as a business.
Quote:
Orginally posted by chandresh
A major portion of this trade is done off records and without any GST involved (infact this is exactly the kind of trade why the govt levies GST - otherwise they would have just done with PST if all they wanted to do is collect taxes - though GST the govt comes to know how the same thing has moved from start to final consumption).
First, I do not understand how this trade can be done "off the record" altogether unless the stuff is smuggled into the country, and sold clandestinely.
If the product is imported thro CBSA, all necessary duties have to be paid that inlcude customs duty, GST and excise if applicable. So, again, how can anyone legitimately import anything and not pay GST?
Quote:
Orginally posted by chandresh
Some of my friends and relations are in this trade, and I know how much they smuggle into the country (now smuggling can be of any kind, right? A diamond bag worth say 20 carats and particular clarity and worth say $100k can be declared as same no of pieces but less caratage and less clarity and therefore worth only say 20 k).
That is more a case of "underinvoicing" and practised quite widely. Smuggling OTOH involves sneaking material into a country without making any declaration at all.
Quote:
Orginally posted by chandresh
Moreover, how do you expect to do this trade unless you have technical knowledge about the goods - to a professional a diamond may be worth 20K, while to a layman, it is just a stone and worth what his friend whom he would trust, calls it worth!
I have done a little bit of reading myself and continuing to do so. Quite a bit is available on the internet. I do not claim to become an expert only by reading, and neither will I be able to become a gemologist, but at least I will be in a position to understand the language somewhat. My contact in Jaipur has been is in this trade for quite a while and it is from him that I will get the jewelry. And then one learns to swim only if he enters the water.
Since you say you have friends in this trade, can you find out who their buyers are?
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Diogenes
====================
The Cynic
Quote:
Orginally posted by DiogenestheCynic
Quote:
Orginally posted by chandresh
In case you know even a little bit about this trade, you will know that this trade works on the principal - the lesser disclosed, the better it is.
I agree that in any trade, the lesser disclosed the better. However, disclosure of some sort is mandatory if one is to involve himself in this as a business.
This is a very different trade when compared to normal trades and disclosures. This trade even involves getting in the goods in your pocket while travelling. It is difficult for me to explain why non-disclosure is different in this type of trade..........I just know is far more when compared to any other trade.
Quote:
Orginally posted by chandresh
A major portion of this trade is done off records and without any GST involved (infact this is exactly the kind of trade why the govt levies GST - otherwise they would have just done with PST if all they wanted to do is collect taxes - though GST the govt comes to know how the same thing has moved from start to final consumption).
First, I do not understand how this trade can be done \"off the record\" altogether unless the stuff is smuggled into the country, and sold clandestinely.
If the product is imported thro CBSA, all necessary duties have to be paid that inlcude customs duty, GST and excise if applicable. So, again, how can anyone legitimately import anything and not pay GST?
Well that is the answer to your question above....non-disclosure. See this is possible because even the buyers in this trade (the big buyers...and believe me there are a lot), do not want to increase their cost, or do not want the purchase to be on record, and so the trade is done totally off the record.
Quote:
Orginally posted by chandresh
Some of my friends and relations are in this trade, and I know how much they smuggle into the country (now smuggling can be of any kind, right? A diamond bag worth say 20 carats and particular clarity and worth say $100k can be declared as same no of pieces but less caratage and less clarity and therefore worth only say 20 k).
That is more a case of \"underinvoicing\" and practised quite widely. Smuggling OTOH involves sneaking material into a country without making any declaration at all.
No, underinvoicing is a case where you get invoice for less amount to save on import duties. Here, the case is smuggle because - say for example, you import 100 carats as 20 carats, sell 20 carats in books and sell rest 80 carats out of books - so neither the cost, nor the sale, nor any taxes are in books!
Quote:
Orginally posted by chandresh
Moreover, how do you expect to do this trade unless you have technical knowledge about the goods - to a professional a diamond may be worth 20K, while to a layman, it is just a stone and worth what his friend whom he would trust, calls it worth!
I have done a little bit of reading myself and continuing to do so. Quite a bit is available on the internet. I do not claim to become an expert only by reading, and neither will I be able to become a gemologist, but at least I will be in a position to understand the language somewhat. My contact in Jaipur has been is in this trade for quite a while and it is from him that I will get the jewelry. And then one learns to swim only if he enters the water.
Since you say you have friends in this trade, can you find out who their buyers are?
I would say you are brave to go into this trade only by reading .........!
Like any other trade, and more so in this trade, since most of it is based on personal relationships and networking, and non-disclosures and faith, people do not want to tell anyone else who they deal with. There are people who at times really go 'underground' for some sellers and then they would communicate only with guys who they trust totally.
However, I have seen my cousin start this trade in Singapore and later in Indonesia by taking the goods with him in a lousy looking bag or in the inner pocket of his trousers and sitting at various retail shops to 'sales talk' with the retailer when he can find time. he used to then give the goods on credit with no 'likha padhi' - purely on trust, and then again spend hours after hours day after day waiting for that 'piece' to be sold so that the retailer can pay to him.Today he is a multi-millionaire!
By the way, I did not know you are from Jaipur........I too am from the pink city, and yes, my cousin started his trade in Singapore by getting goods on consignment from his brother in law in Jaipur! So you can do that too!
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
tricky business, my cynical friend, because you have to deal with customs officials in at least two countries and the rules are ever changing. diamonds and gems are the trickiest because, as chandresh points out, a great deal of technical knowledge is required. the colour of the stone determines its value... to grade a stone by colour takes someone who really knows their business. when buying the stones, you REALLY have to be careful. there are so many ways of hiding flaws in stones and of masking the true colour that you have to be careful that you pay the right price.
finally, stones are key in money laundering and the drug trade. they are easy to move and the people associated with them are often in some sort of 'under the table' business; the principle, after all, is to sell someone something for more than its really worth, right? you will be part of the food chain... so they will try and trick you too. think of it as being a used car salesman: you are making money by taking advantage of people in the end.
this is a bit harsh, but there is a certain truth to it. thre was a documentary in the US a while back where they tried to sell a used diamond in NY's diamond district... no store would buy it. finally someone offered 10% for it. it makes you wonder...
but as chandresh points out, you can make a lot of money if you know what you doing. but you will be swimming with the sharks.
look into bringing uncut stones. you may not have to declare them and you won't have to worry about having to evaluate the cut of the diamond (another factor to consider).
I'm also into jewelry business now as before coming to canada in August 2004 I was into medical Diagnostics in Jaipur. I did'nt have any contacts here in Canada to sell semiprecious natural stones jewelry so I opted to sell my products on ebay and I got good response for my products. I got two small parcel(jewelry from Jaipur) through UPS as free trade samples and paid all the duty and taxes as applied and experimented with those products on ebay. I'm now after three-four months of experience on ebay looking for my first commercial consignment to come as now I have some customer base which is increasing everyday and they buy my products. If anyone who wants to do business without any personal contacts or network then this is the place where you can sell and if your product is good and you work honestly(like giving complete details of product) and sincerly then you really get market and a good customer base. All the best 
Note: I'm looking for some one to guide me for accounting, bank, tax and custom related matter. I need some one who can really help me in these matters and streamline the things for me. Thanks!
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Hello Veeru,
Thanks for digging up this old post and responding. I too was thinking of trying eBay. Some questions if you can please answer:
1. Do the buyers want some sort of documents or certifications for the diamonds or the jewelry?
2. How does one get the jewelry evaluated from a certified gemologist. What I mean is that since the diamonds are already set into the jewelry, how does a gemologist evaluate their carat, grade etc.?
3. eBay is basically an auction site. Since the rules dictate that the item has to be sold if a bid meets the reserve, how do you price your jewelry? If you set it at a higher level, it will not attract bids and if set lower the item may be forced to be undersold.
Thanks in advance. I am alsosending this by PM.
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Diogenes
====================
The Cynic
Hi guys,
I have a question on this also. What if you are personally bringing the jewellery for the express purpose of making a sale with you? What kind of declaration forms and custom forms do you have to fill?
Also when shipping the jewellery to customers what kind of insurance do you pay?
TIA
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