Importer expects $20 million in 2007
LA Business Journal
Pearls Before Design
May 25th, 2007
Importer expects $20 million in 2007 sales as popularity increases in fashion world
The adage that it’s better to give than receive resonates with Jeremy Shepherd. A $25 pearl necklace he gave his girlfriend a decade ago has turned into a $20 million business.
Shepherd was a 22-year-old flight attendant in 1996, making regular trips to China. He decided to visit Beijing pearl market when he’d run out of tourist attractions to visit. He bought a necklace for $25 for his girlfriend. She was impressed at the quality of the piece he bought, especially when he got home and the necklace was appraised at $600. He did some checking and realized that the many players between the Chinese pearl farm and the retail store were what drove the price up.
“I started to look at ways to start a business,” Shepherd said. “I talked to jewelry stores and even pawn shops, but no one would buy pearls from me.”
Then a friend suggested eBay.
“I’d never really done anything online,” Shepherd said, but he decided to give it
So with $4,000 he pulled together from paycheck and credit cards, Shepherd hopped a flight to China, but not before listing online the necklaces he planned to buy.
When he returned from China a week later with a suitcase full of $4,000 in pearls, all of the necklaces had already sold on auction. He sold each for $60, but Shepherd had paid $20 a pop. He ran his little gem of a business out of his suitcase for three years, buying necklaces when his airline trips took him to China and then selling them on online auctions.
His brother helped him build a Web site in 1999, and he built a bigger site in 2000, debuting his company name, PearlParadise.com, and dropping the day job. By 2001, he was doing enough business from his Web site to forgo the online auctions.
His efforts have paid off. Pearl Paradise grossed $15 million in 2006 and Shepherd is projecting a $20 million haul in 2007. He does 95 percent of his business online.
“We sell for at least 80 percent off retail,” Shepherd said. “And our volume is very high. That’s why we’ve been able to do what we’ve done.”
The international pearl market has drawn some headlines this year. Tahitian pearls, which sold for thousands of dollars just a few years ago, plummeted to a three-figure price range. Pearl prospectors sprung up in Tahiti and they pulled pearls out of the water early to make a quick profit, although the product was inferior. As a result, prices dropped. However they’re rising again.
But it’s clear that pearls have gotten more popular among designers.
Chinese freshwater pearls are now being produced with the smooth, round look of the more upscale cultured and Akoya varieties. The freshwater pearls can also be grown in the shape of petals or coins – and they cost less. China has been ramping up production of freshwater pearls, which has led to a drop in price, as much as 40 percent in some cases.
As a result, major players like Bulgari, Tiffany, Fortunoff and David Yurman are all using more pearls in their designs.