A Story of Love and Success
85% of people who buy engagement rings are under 35. This generation is very comfortable purchasing online. In 2014, over $1bn worth of engagement rings were purchased online in the US and one jeweller had greater engagement ring revenues than Tiffany and Co sold across all their US stores put together.
This is a very exciting time for 1791 Diamonds. We sell designer engagement rings and wedding bands exclusively online. Like all great New Zealand ventures we started in a humble back bedroom, and just a handful of years later we have a thriving business, both here and overseas taking high street jewellers head on. We specifically started the business because more and more people are buying online, yet most traditional jewellery businesses have little access to the expertise and resources needed to make an e-commerce venture really work.
Our story begins with Alice, a young woman with a fascination for drawing jewellery, and Richard, a young man who just couldn’t be prised off his computer. Roll forward twenty years, and they have a BA in Jewellery Design, a BSc in Computing, and decades of experience in business between them. Alice, being the creative one, contributes elegant design and exquisite craftsmanship, the hallmarks of our jewellery. Richard, the brilliant technical mind, underpins our Internet advertising and e-commerce sites.
Weddings are typically summer affairs, so covering both the northern and southern hemisphere means we can direct our Internet advertising spend to where the market is hot. Initially, people find us by searching for “engagement rings” on Google, and Facebook. We’ve spent thousands of hours developing and tuning our Internet advertising and e-commerce systems specifically to out-manoeuvre the old-school bricks and mortar jewellers.
To date we have sold NZD $7.5m of engagement rings and wedding bands exclusively online. Our websites and comprehensive back office systems run 24/7 making sales around the clock. We typically sell over $120k of rings a month with a gross profit of 36%. Some years back we formed subsidiaries in NZ, AUS, UK and recently the USA. Those companies are taking off, with 75% of our income now coming from overseas. We are really pleased that 1791 works so well in the much larger overseas markets, with key metrics being well above Australia, and well above forecast.
Proving our systems and products and getting rave reviews from our customers around the globe was the important first phase. All our research and development, business planning, and quite simply thousands of hours of good old-fashioned hard work have paid off.
We are excited to offer you the opportunity to come on board and be part of our journey to build one of the best online jewellers. We are particularly pleased to be raising funds via Snowball Effect. 1791’s business is all about people and their relationships, so what could be more perfect than the public actually owning a part of our company.
The funds we raise will principally be used to amplify the success we are already having with our campaigns in each country. As you can see in the table above we get a 477% return, or put another way, for each dollar we spend we get $4.77 of revenue back. We have very detailed tracking of how all our internet adverts work, and the results are excellent.
We are seeking to raise a minimum of NZD $750k (14.29%) in new share equity at a pre-money valuation of $4.5m, and a maximum of NZD $2m (30.77%). Oh, and did we forget to mention, there are some rather beautiful investor rewards too… diamond necklaces, earrings, and rings.
Alice Herald, our co-founder has a BA Hons in Jewellery Design from Central St Martins, and later worked at Benney’s, the Goldsmith and Silversmith to The Queen. Over the past five years Alice has designed our various jewellery collections, sometimes on her own, sometimes working in collaboration with other designers. We own the intellectual property rights to all the designs.
Today we have jewellery collections for friendship, engagement, wedding, and anniversaries, ranging from $350 to $150,000, and yes we do sell some of those top rings!
Alice’s insistence on only the highest level of craftsmanship saw us review 17 jewellery manufacturers before finding the right ones. Today we entrust those teams of jewellers to make our products, buying diamonds and precious metal only when we need them as customers place orders.
This means we don’t need to hold stock, and we have very little exposure to movements in currency, gold, or diamonds. Traditional jewellers have to pre-make stock, and have cash tied up having it all on display in shops. It also means when customers call, we ask them what they want rather than pushing unsold stock onto them.
Whilst Alice draws new product collections the traditional way using pen and ink, something our customers love having a copy of, we convert these to 3D CAD drawings, and utilise the latest 3D printing to make the foundry moulds for each ring. This is a very efficient way to make rings and results in an extremely high quality end product. It also means we can produce prototypes very quickly either for one-off customer pieces or as part of designing new collections. Such technology is very established and often used at the leading end of manufacturing. It is not often found in traditional jewellers.
Overview of USPs
First and foremost we have some amazing products. They are elegantly designed and exquisitely crafted. They are also matched together so people can build a collection over time. We have ranges for differing age groups and budgets, and we have designs covering all the traditional styles, but also some really contemporary ones too.
One thing that may surprise you is that virtually none of the world’s top engagement ring brands sell engagement rings online. Companies such as Tiffany, Cartier and De Beers have considerable investments in costly high-street stores and are committed to traditional sales channels. However, the younger generation is very keen to buy online. This leaves a great opportunity for us.
We utilise some very sophisticated technology to control our Internet advertising and also to optimise how our web site works.
We have comprehensive back office systems, ready to support an increased team of sales, customer services people, and an expanded product range, as well as provide management KPIs. These systems are typically beyond what the vast majority of smaller jewellers can afford.
It’s rare for a new brand to be able to consistently sell products worth $10k – $20k online. We have developed proprietary sales processes and systems to achieve this and have worked on refining them over the last five years so that we are ready to scale up. Most of what we do is about good old-fashioned relationship building, but where appropriate it’s mixed with the latest research in sales and marketing.
Lastly it is important to understand that we have spent years refining our internet advertising and e-commerce sites so that they perform so efficiently, attracting potential customers and getting them to enquire and purchase.