B2B trading platform Nivoda is transforming the way the jewellery industry operates by providing access to a global diamond supply chain without the burden of high shipping fees, margin-sapping banking costs and unpredictable delivery times.
The company’s founder and CEO, David Sutton, reveals why the sky really is the limit for a business borne out of a challenge that he used to face every day himself.
Nivoda launched its diamond platform in 2019 when it’s fair to say the world and the global economy was in a different place to where it is now. Does the original philosophy and vision that you had for the business still stand?
Yes, the philosophy and vision of our business remains consistent. In fact, these shifts in the global economy and their effects on our industry have accelerated our ability to support businesses who are adjusting to the new way of doing things.
The use of technology in both selling and buying has increased exponentially. We are even noticing that the companies which are embracing this shift with us, in many cases, have been able to grow their business this year in spite of its many challenges.
I think it’s important to remember that the current generation of engagement ring shoppers start their search online, and the next generation coming doesn’t think there is any other way.
For anybody in the industry that might not be familiar with Nivoda, how would you summarise the service that you provide?
Nivoda combines physical transportation infrastructure with powerful technology to deliver both time and cost savings to the industry.
Nivoda makes buying natural diamonds, lab-grown diamonds and non-certified parcels at the lowest possible prices easy.
Free membership on Nivoda gives businesses the ability to cherry-pick the best-priced items from manufacturers all over the world.
The platform provides users with a vast selection, fast delivery and the best possible prices.
What sort of uptake have you seen in the UK, and can you put this into any sort of context with other markets that you operate in?
We have seen a good recovery. Most companies have recovered from the 65% dip in sales we experienced in March-April this year.
With a second tiered lockdown being introduced, we are expecting to see another dip in sales, however the initial uncertainty and fear of the unknown is not as prevalent, and we do not expect the same number of people to postpone engagements this time around.
Across Europe and the US, we have seen a similar rate of recovery and are positive for the holiday season.
At the start of the year I read that you can provide diamond buyers with access to suppliers offering more than 500,000 certified diamonds. How obsessed are you with increasing that number – and is there a sweet-spot you are looking to hit?
Buyers can already purchase any diamond in the world even if it’s not on the site. They can simply search for the certificate number on Nivoda and if the item is not listed there is an option to request that item be added to the site.
All they have to do is click ‘request’ and our team will quality-check the goods according to their preferences, negotiate the best price and include it in the next shipment.
We are currently onboarding circa 40 suppliers a week and our goal is to have all the available diamonds in the world on the site in the near future.
A vast selection is very important to the growth of our customers’ businesses, and having the right offering with low-cost delivery is one piece of the puzzle in unlocking exponential growth.
What would you describe as the real unique advantage of the platform? Is it all about the software engine and back-end systems that power it?
The initial major stand-out difference is that users can simply add to cart and checkout. It’s the difference between traditional classifieds and a service like Amazon.
When using the classifieds, you would have to call up the owner of the goods, negotiate a price, wait for an invoice, make an international transfer, arrange and pay for shipping, and only then receive the goods. Nivoda is a full-service logistics network.
There are daily shipments running between Hong Kong, India and the UK and the USA.
In addition to the enormous amount of time saving, the consolidation of shipments and payments give buyers access to the world’s stock at reduced shipping and payment fees.
It’s therefore both the cheapest and easiest way to procure goods and gives time back to companies to focus on finding and serving new customers.
You have spoken about being a trusted market place for the jewellery sector. How do you ensure and verify the legitimacy of the diamond suppliers that trade via your platform?
The major difference that exists between Nivoda and other marketplaces is that Nivoda is principal in the transaction.
This means that Nivoda takes title and possession of the items, quality-inspects them and is the issuer of invoices to buyers.
A key part of your mission when developing Nivoda has been to create a fast, easy and efficient way to buy and sell diamonds worldwide. How confident are you that it is also the most economical way for buyers to source diamonds given the online market place is constantly evolving?
The idea was borne out of a need I had myself. It was my job at my previous business to make sure we had the most competitive diamonds on the site so that we could make the highest possible margin while keeping customer acquisition costs in check.
I worked to integrate diamonds from many of the largest manufacturers in the world.
The issue I had is that when I did that, the customers would choose the best diamonds and I ended up buying from 450 different companies.
If I shipped directly from each supplier, I would pay $150 in shipping costs and $40 in bank transfer fees.
I thought maybe I can buy from just two or three suppliers, and save time and shipping costs in the process.
We did many pricing comparisons and whichever way we looked at, we were out by roughly 10% on the average sale in either shipping and payment costs or simply a higher price when buying from fewer suppliers.
The final way we saw to solve it was by consolidating orders from multiple suppliers and shipping together.
The problem with that was transferring pricing issues and having people on the ground in India and Hong Kong also didn’t make financial sense.
The ideal solution would be to have another company which had fulfilment at its core service, but there wasn’t one.
I thought, ‘I know what needs to be built, I know how to build it, so create it and create it for the whole industry to benefit from.’
The same goes for suppliers – what evidence can you offer that the platform really is the most profitable way for suppliers to sell diamonds?
Savvy suppliers take the whole supply chain into consideration when looking at the cost of their products to the retailer and thus the end-consumers.
They look at the costs related to delivery all the way to the point of sale. They ask, ‘what is the landed cost of my $2,000 diamond in Mumbai when it arrives in the UK?’
If their delivery costs are $150 plus the $40 in bank fees, then their item has a delivered cost of $2,190 plus mark-up.
Now, if you are using Nivoda fulfilment then that same diamond has a delivered cost of $2,050. If you are shipping Nivoda, your goods are better priced on the frontline and selling faster.
What would you say is the hardest lesson you’ve learnt since launching the platform?
There are different stages in an organisation’s growth. The first stage is trying to find out if anyone appreciates the work you’re doing.
There is a lot of ideation, iterative design and building, and customer feedback cycles. I was very comfortable doing this as I had done this before in the other business I had built and I had a major advantage as I had also lived and worked in the shoes of our customers in the past.
The second phase is when you’ve worked it out and it’s time to deliver it to hundreds, then thousands of businesses.
We felt the pull from the market and began to accelerate our hiring and expand our fulfilment teams, mostly in India and Hong Kong.
The early stages of scaling the organisation has required significant expansion and investment into our tech development team.
Creating an excellent hiring process and making sure we have the right people in the right seats at the time we need them has been my greatest challenge thus far.
There is an excellent book I recommend reading called ‘Who’. It outlines a fantastic hiring process which we have now adopted and the results are showing.
What has been the high point and low point for you this year?
We had major challenges in delivery times from India during the first few months of lockdown. Mumbai is now open at a slightly restricted capacity and able to once again deliver consistently.
Despite the challenges, we have still managed to quadruple platform sales over the last 12 months and have raised over £1m in funding to be able to continue to innovate and deliver solutions to the market.
Our vision is to make virtual buying better than buying physically and our goal for next year is to really focus on providing a seamless service for all diamonds-related purchases.
We have recently added Star & Melee and Lab Grown Diamonds to the offering, which have been extremely successful from day one.
We are encouraging suppliers to take part in our returns programme, which allows companies to provide return policies to their customers without risk of getting stuck with unnecessary inventory.
We are now working towards being able to provide payments terms to buyers. This will be in the form of invoice financing.
This set-up allows us to continue to provide suppliers with funds straight away, giving them the ability to reinvest into rough production faster and ensuring the lowest possible prices for our buyers.
In the long run, we will continue to innovate according to what our customers request. Our vision is to provide them with a single operating system for global procurement.
Fitting into the jewellery ecosystem
Nivoda is a trade-only business and sells purely to registered businesses in the jewellery industry. It essentially has three broad customer types – manufacturers, wholesalers and retailers. Founder and CEO David Sutton explains where each one fits into the equation.
“Manufacturers primarily use Nivoda to reach more customers around the world but also appreciate the ease of dealing with one company, delivering hundreds of orders at a time to just one location and receiving one payment, on time, every time.”
“Wholesalers use the platform for both buying and selling. We have seen wholesalers selling internationally to new customers they may not have been in contact with before and appreciate being able to cherry-pick items from India and Hong Kong as and when they require them.”
“Retailers have been able to purchase from both wholesalers and manufacturers depending on whether they require appro/memo, fast delivery or payment terms. This will often lead to purchases from wholesalers in the same country as the buyer.”