Of course, these are my basic rules and my opinions based on my personal experiences. Others in the gem cutting business may disagree. (Some certainly will). However, I think you’ll find my rules are mostly common sense and apply to real situations you’ll face in this business.
Disregard them at your own risk.
Don’t Be Rude
I can’t stress this enough. If you break this simple rule — especially if you’re a newcomer trying to get established — you won’t succeed in the gem cutting business. You’d be surprised at how obnoxious many “wannabes” act at gem shows and trade events.
My article on gem business etiquette covers this rule in depth. Read it carefully.
Why is this simple rule so important? Because people in the gem trade talk to each other all the time. Many are good friends and have done business for decades. Gem dealers network with each other. It’s a small, tight community, too. Besides friendships and business associations, dealers often have bonds of family and marriage.
If you’re getting into the gem cutting business, you’re going to have to do business with gem rough dealers in person at gem shows. Therefore, if you insult Uncle Frank, he’s going to tell his family and friends in the business, they’ll tell their friends, and so on…. Sooner or later (usually very soon), you might find it hard to buy rough. When you inquire, it’s unavailable, and when it’s available, it’s much more expensive. You’ll be left out in the cold and wondering what happened.
The gem trade is a very people-oriented business. Rude behavior will severely limit your chances of success.
The Gem Cutting Business Requires Time and Money
This is true for any business, but it’s especially true for professional gem cutters. If you’re not willing or able to make the financial and time commitments, don’t bother. Just keep faceting as an enjoyable hobby.
Many people seem to think that running your own business means you only have to work half-days. That’s actually true. When you start running your own business, you can even pick which 12 hours a day you want to work.
Believe me, you’ll work 12-hour days, and it’ll be a very rare weekend when you don’t have something business-related that has to be done. In other words, plan on being a workaholic, at least during the start-up years.
Get Expert Business Advice
You’ll need money not only for your gems but also to pay experts to help you.
If you have no business experience (and even if you do), you must seek expert advice. Otherwise, you won’t survive. No whining. No excuses. Identify the areas where you need help. Find experts, talk to experts, and pay them for their advice. For example, what do you know about business taxes? Nothing? Then go to a business tax expert. Not your Uncle Fred or Aunt Bess, unless they’re legitimate experts. Pay a certified public accountant (CPA).
Experts will save you a lot more than they’ll ever cost you, if you follow their advice. I can’t even begin to count how much time and money experts have saved me over the years.
What experts do you need when you’re getting started in the gem cutting business? A qualified CPA is a must, and I’d highly recommend a financial advisor. Other experts you’ll need depend on your business plan. For example, if you’re planning on doing much business overseas or bringing goods into the country, you may need a customs broker to help you with importing and exporting gems.
Buy the Best You Can; Cut the Best You Can
If you buy anything less than the best gem rough you can afford, you’re wasting your time. Junk is junk. If you decide to cut low-quality material, you’ll be competing — and losing — to big cutting houses in Bangkok or India. Always buy the best quality gem rough you can and cut it the best you can. Top-quality rough will cut into top-quality gemstones.
You’re Better Off With a Few Quality Stones Than a Lot of Low-Quality Stones
This is true for a simple reason. Most people just getting into the gem cutting business have limited funds. Quality gemstones are always in demand. You want to establish yourself as a quality gem dealer and cutter, so actually having quality gems to show your customers (rather than a bunch of low-quality stones) will help.
Keep in mind that quality doesn’t necessarily mean expensive. For example, you can buy really nice quality quartz for not a lot of money.
Unique Gem Cuts Sell
If you go to any large gem show, I guarantee by the time you’ve seen your 2nd or 3rd case that your eyes will glaze over because of all the repetitive designs and junk stones. You’ll occasionally see a gem of exceptional color and quality, but you’ll probably say to yourself, “If I could just get the rough, I could have done better.”
My point is this: if you cut your stones in a unique style, your work will stand out from the pack of commercial schlock.
Quality Cutting Stands Out
Your eyes will glaze over even faster when you look at the cut quality of the stones on display at gem shows. In general, the faceting quality available in the trade as well as commercially is terrible. Even some (not all) professional, award-winning cutting is poor. You’ll find poor designs, bellies for weight retention that kill light return, no facets on the girdles, no polished girdles, wrong designs for the rough (likely chosen just to maximize weight), completely blown meetpoints, and poor polishes.
Quality meetpoint cutting will stand out from the crowd. Quality cutting overall will help distinguish your gemstones. Of course, you’ll have to find the right buyers, people willing to pay for quality faceting. They’re out there.
This is why you want to buy the best quality gem rough you can, so you can really showcase your quality faceting.
Invest in Your Inventory
Expect to spend a lot of time and money building your inventory. The gem cutting business isn’t an easy way to make a living. Building a good inventory of quality rough can take years.
Of course, the amount of funds you have available at a time will limit how often you can purchase rough. However, there are more reasons why developing your inventory can take so long. You’ll often find certain types of gem rough unavailable on the market. That’s just the nature of gem mining and supply and demand. You can’t cut what you can’t buy, and you can’t buy what’s not for sale. On the other hand, when the rough is available, you’ll face a lot of competition to buy the rough as well as competition to cut and sell it. So, the faster you try to make a profit by buying the available rough and then selling the cut gems, the less money you’ll make. The rough will cost more, and the finished gems will sell for less.
Let’s say you buy quality tourmaline rough when there’s a good find of a particular color. Since it’s available, many of your fellow faceters will also buy it, cut it, and try to sell it. This makes the “peak of the find” the worst time to sell your work.
This is where the investment approach comes into play. While you have to cut and sell what you must to pay for your buys, you need to hold back some material and plan on making the best profits later. Wait for the time when the material from the find is exhausted, so you’ll face far less competition when you sell gems cut from that material. Just realize that this could take years.
Finished Gem Size Matters
Focusing on quality rough, quality cutting, and unique designs are the best ways to succeed as a custom gem faceter. However, cutting the right finished gem sizes will also play a critical role. As I’ve written in another article, avoid cutting anything under 2 carats (except for rare exceptions). Under that size, commercial cutting houses will almost always beat you. Generally speaking, keep your finished gems above 2 carats.
You Need to Sell What You Cut
Many newcomers to the gem cutting business overlook the importance of salesmanship. However, this is a critical skill for success. Read my article on selling your gemstones.