The online family jewels

Shift: Gus Hashem has taken the reins from his father Simon, right Louise Kennerley

After two years of selling surplus stock from his father’s jewellery store on eBay, Gus Hashem wanted to take the next step and establish his own online retailer. But persuading his father, who was in his late 60s and had worked in the industry for many decades, to support an upstart online venture turned out to be just as challenging as finding the right website developer.

“I did approach dad,” Hashem recalls of a conversation in 2008. “I said, ‘This is what I’m planning on doing. I don’t know where it’s going to go. I know you don’t understand it, [and] I know you’ve been working all your life to provide for the family . . . but I need your support and I would like my inheritance a little bit earlier.”

Four years later, the younger Hashem is running a fledgling e-commerce player that is growing steadily and changing the way people shop for diamonds.

Diamond Emporium allows customers to customise pieces using an interactive, online interface.

“Even until today, I still don’t think he really understands what exactly I do,” Hashem says.

The experience of this father and son emphasises the fact that for all the positive marketing campaigns from organisations such as PayPal, Google and Sensis about “getting business online”, often the greatest challenge is cultural, not technical.

The barriers often are more about embracing a new world of retail or grappling with laying off a worker whose job is now done by online tools.

Hashem’s father, Simon, now 70, emigrated to Australia from Lebanon with his young family in 1988. The father of three set up a small jewellery manufacturer but later moved into retail and wholesale. The family shop was in Belfield, in western Sydney. Hashem has fond memories of helping in the shop and being a stubborn teenager, burning himself with a soldering torch.

Instead of joining his father, Hashem went into a financial services career, working with Sydney stockbroker Fat Prophets. In high school, Hashem had dabbled in some petty online retailing, buying laptops from the US and selling them on eBay for a profit. But in 2006, while on holiday in Turkey and Lebanon, he was thinking about the family business. At that stage his father was 64 and because neither Hashem nor his brother or sister had shown interest in taking over the jewellery store, it was winding down. “He definitely didn’t have the passion or the motivation [that he once had],” Hashem remembers. “I guess he was taking it easy.”

Hashem had thought, in particular, of the out of vogue surplus stock piling up in the store. He decided to try to sell it on eBay. “I called dad all excited and said, ‘When I come back I’m going to join the jewellery business, I’m going to sell on the internet.’ He obviously didn’t take me seriously,” he laughs.

Hashem had some success selling individual pieces on eBay. “When I used to tell [dad] what I was doing, to him, it didn’t seem like a real business or work, so to speak,” he says. “It wasn’t until we sold a necklace to a customer in Canada for $6000 or $7000, that’s when he took notice . . . It was foreign to him that people would spend that amount of money without seeing the item.”

By about 2008, Hashem began to notice more jewellery sellers on eBay. “With the internet there’s transparency and it’s not easy to be discreet about what you do,” he says.

He’d heard of US websites that sold custom jewellery, such as Blue Nile, and decided to start his own venture. He asked his father for financial support. “He said, ‘I don’t understand it. I don’t know how to use a computer, but I’m happy to support you.’ ”

Hashem quickly showed his father that he had some business nous, working hard on the diamond supply chain to cut out middle men and improve margins. But he still believes that his father’s support was paternal rather than commercial. “I think he saw the passion and fire in the conversations that we had and he didn’t want to be seen as stopping me from following my dreams.”

From 2008, Hashem began working on website development for the Diamond Emporium. Over the years he has used a mix of local and outsourced development. These days he has an Australian-based contractor that works on the front-end development (the user interface) and he uses developers in India for other coding. All up, the website development has cost about $150,000. He found the developers using freelance websites crowdSPRING and Elance. And Hashem also used Elance to find a copywriter in the US.

The Diamond Emporium website is quite complex and allows customers to customise their jewellery, with a focus on diamond engagement rings. Customers can pick their perfect ring through a search of the company’s database of diamonds based on scales of shape, carat, clarity, cut and, of course, budget.

The website was open for business in 2010 and Hashem admits to having some nerves. He was worried that the website wasn’t perfect but was persuaded by a friend, who had an online furniture retailer, to “just launch it”.

“I thought, ‘What’s launching? What am I supposed to launch? Put the cracker in the back of the website and let it go?’ ” Hashem laughs.

The website was launched with a $1000 Google AdWords campaign that lasted a month. “The phone started ringing . . . The first two phone calls I was with my kids at the markets at Lilyfield [in Sydney]. The phone rang and my son was on the horse and someone said I’m after a diamond, a 1.5 carat. I said, ‘When do you want to come in?’ ”

After meeting a doctor at the business’s Sydney suite, Hashem made his first engagement ring sale, as a result of a website enquiry, for $25,000.

Although the whole transaction can be carried out online, many customers prefer coming into Hashem’s city premises for a consultation. Based on a conversation about what the customer wants, sketches are sent to a jewellery design studio in Chippendale, inner-city Sydney, that creates digital CAD images.

“Interestingly, they’re a business as well that took over the family business and transformed it, moving more into high technology,” Hashem says.

The CAD files are returned to Hashem for feedback and once he’s happy, the studio creates high-quality rendered images that are emailed to the client, often one or two different concepts.

Once the client is happy, the design files are sent to a rapid prototyping company in St Peters, Sydney, that makes a resin model of the ring. The customer can try this on before the final precious metal and stone is manufactured locally. The whole process takes about four weeks.

About 15 per cent of customers buy jewellery from the Diamond Emporium without going to the store and Hashem expects this to grow. But for the rest, Hashem says his online shop offers convenience, the ability to research first and transparency, so there’s less price shock for a nervous groom to be. And with an average spend on diamond engagement rings of $10,000 there’s something to be said for touching and trying it on before paying for it.

It seems Simon Hashem’s concerns about online jewellery were real after all.

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