There is an old joke on 47th Street about a begger on Fifth Avenue, who says, “Mister. Give me fifty cents for a cup of coffee.”
Someone passed him by, saying, “You can’t get a cup of coffee for 50 cents today.” And he responded, “Who pays retail?”
In other words, there is no more retail anymore.
Which puts us in mind of another story — this time a true one — about a young broker came over to us and asked our advice. “Should I continue to be a diamond broker?” he asked. “The margins are so small. There is no real future in it. Perhaps I should open a store and sell diamonds.” We told him we are not sure that is such a good idea. “Everyone is selling retail these days. The retail end is not something great. All the miners are selling retail: De Beers, Leviev.”
In other words, there are problems at both wholesale and retail.
So he responded, “But what can I do? Diamonds are the only thing I know about.”
We said the only people who will likely stay in the business for the long term are those who specialize — whether it’s people who sell only pink diamonds, or sell only marquises.
He said, “By specializing, should I become a brand name?” We told him that to establish a brand you need millions of dollars, which he did not have.
But we said the only brand you can establish is your own name — meaning your integrity, your knowledge, the ability to service your customers. When people are willing to give you millions of dollars on diamonds on a handshake, then you have a trustworthy “brand.” And, even in these tough times, that will carry you very far.