In the Loupe
In the Loupe
The King's Diamond Dealer ft. Gems by Pancis
Kyle Pancis from Gems by Pancis shares the fascinating world of fancy colored diamonds, revealing how a royal connection in Belgium launched his family's 30-year specialty business. His insider perspective offers rare glimpses into the value, cutting techniques, and origin stories behind some of the world's most exclusive gemstones.
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Welcome to In the Loop. What is up everybody? My name is Michael Barpo. Thanks again for listening to In the Loop. This week I have Kyle Pantason from Gems by Pantas and he is a specialty dealer in fancy diamonds and it's a really cool conversation. Normally I structure these interviews in kind of a linear fashion, meaning I start with like their introduction and then we kind of flow through these conversations and I sort of bring up these topic points. For this one, I had met Kyle at the client workshop a month and a half ago at this point and at the time I was like man, I don't know anything about this topic. I would love to have him explain to me more about these colored diamonds and the process of them and kind of like the world of dealing them. It's a really interesting conversation. I basically just threw every question I had about the topic at him and he filled them perfectly. I would really recommend this one. This is a very interesting conversation. Kyle's great on the mic.
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Speaker 1:And now back to the show. What is up everybody? My name is Michael Burpo. Thanks again for listening to. In the Loop I'm joined by Kyle Pantus with Pantus Gems how are you doing? Or Gems by Pantus how are you doing today, kyle?
Speaker 3:Pantus Gems. Gems by Pantus. I'm doing great. How are you, michael? Thanks for having me on here.
Speaker 1:So excited to get a chance to speak with you again. We met at the Punch Bar Client Workshop where you were one of the sponsors and gave a presentation, and I really enjoyed your presentation all about colored diamonds and kind of the world of colored diamonds. It was very educational. It wasn't just here's, you know, this cool diamond, this cool diamond, it was more about like the, the story of them, uh, is colored diamonds specifically what you work in?
Speaker 1:yes, that's been our uh specialty for 20 plus years, actually 30 plus years and so tell me, tell me about gems by pantsis and uh, it sounds like you guys have a pretty exciting uh origin story.
Speaker 3:Yeah, so company. My dad came into the business in the late like mid to late seventies I always say 76. I think the official start was like 82 with the company. But he was already in the business, in the trade doing business before that. Started as a young young, 19 year old, 20 year old out of college, started working retail at Mel Arts it used to be a chain operation down in Baltimore Started learning. He was selling diamonds over the counter bridal rings fell in love with the business, always knew he wanted to be in the industry from a kid and so eventually he kind of started off on his own and kept diving further and further into the trade and built a business with my mom essentially.
Speaker 1:Amazing. And what's the story behind the King of Brussels? I was reading your guys about page.
Speaker 3:I was like, yeah, I can't be real, what is that about? So so that was so. Get started a couple years into the business. You know, everybody as an entrepreneur is always trying to figure out new ways to invent themselves and figure things out Right. And so in the beginning he was selling and all sorts of different loose diamonds. And by 1985 ish, 86, he was like looking to expand into more sourcing overseas.
Speaker 3:And my great uncle was the King's journalist. And wow, that's cool. Kings journalists and wow, that's cool. Yeah, it was really cool story. And so he had asked my grandfather at the time, or my grandmother, to write this letter in German to to my uncle, kurt, who I'm actually named after. Ironically, it's kind of very cool. I don't think I've told that story when I met you a couple weeks back, but anyway. So he writes this letter and says in the story when I met you a couple weeks back, but anyway, so he writes this letter, he says, okay, go on this such and such plane, meet me in Brussels, in Antwerp. So he flew over there. This is way before technology and all that good stuff. He picked him up on the tarmac off the plane and brought him straight to the king's palace. He had the whole experience meeting the king.
Speaker 3:It was pretty like an incredible story from a young man's perspective. I King it was. It was pretty like an incredible story from a young man's perspective. I think he was like, you know, maybe late twenties, early thirties. At that point, early thirties, I would say, and uh, kind of really cool story. And went there on business, said hey, I want to, you know, get more involved into the diamond trade. This is what we're doing here in the United States. And lo and behold, he introduced my father to some of his personal cutters that he was working with in Antwerp and one of the gentlemen's name was Harry Polakevich. It's, I guess, a famous guy at the time in the trade. He was cutting, like you know, all these like blue diamonds and colored diamonds. My dad had no idea about any of this stuff. It was all new to him at the time and that was kind of his quick, you know, intro to that world and the network kind of just built out from there.
Speaker 1:That's so cool. I love sometimes those weird meetings and the fact that people can offer you such a I don't want to say a leg up, but more like can offer you like a backstage pass. And what I always think about is it's really a lot of what you make of the opportunities when they're given to you, because very easily you could take a backstage pass and it's just a cool story and you know there's that. But making the connections because you know, if I was to say, if you're an aspiring musician and I give you a backstage pass to like a, you know, jay-z concert or something like that like theoretically, there's a world where you could make these great connections that change your life.
Speaker 3:There's also another world where you just go and you have a great time backstage pass, and then there you go, you know well and so and so the the connection started and then he started importing color diamonds and working with the argyle mine already back in the 80s and running in-store programs. And it was it was so new to the marketplace like selling a color diamond to the consumer even today is kind of difficult. But it's easier now, obviously, with all of the marketing that's gone behind the whole product line. But back 30 years ago you could barely even sell these things. Right, it was a very difficult product to sell. Nobody understood it, nobody knew it. They only knew white diamonds. That was the only thing people knew, because the beers and the marketing and the industry was solely around bridal white diamonds for a hundred years prior, right. So so you know, as a, as an entrepreneur, even even as a gen two for myself, about 10 years ago, my dad had kept.
Speaker 3:My dad always told this story and I'm like you know 10, you know 10 years ago, I'm 12 years in the business. I'm like new in the trade, I'm like trying to. You know, I'm traveling the road like old school sales guys are still today. I mean, it's kind of like an interesting breed that still exists in the trade and I'm driving around the country, slaving away, trying to figure out how to make a living, trying to do like everybody else in the business and in other businesses, not just solely the diamond jewelry industry and I just keep hearing my dad telling the story and, like you said, it's like what you do with this connections and how you build from it. Right, and as a company, we were always focused on the color category and I continue to hear the story and one day I'm like in the one night, of course, it's always the shower. I am in the shower and I'm thinking about this whole thing.
Speaker 3:Pants is gems, color diamonds here's the story and I'm like this story needs to be glorified. We need to expand this because when you're in the moment in business, you never realize what you're actually sitting on until you look at it hindsight, 2020, right, and then you start to, you know, sensationalize something of what is a reality, but in your own reality you don't really think of it, like you're saying. And so I say you know what we need to rebrand the company. You know we didn't change the legal stuff pants, gems incorporated is still pens, gems incorporated. But like let's rebrand, let's do gems by pants nobody cuts a gem like gems by pants, right, and let's just focus on this exclusive color diamond market.
Speaker 3:Go a little higher end, build out some cool products and and bring it to market. And um, again, it's you. You take a story, you take an experience, you take a situation and um, take an experience, you take a situation and in my dad's view he kind of just that was his story, that was his life, right, it's his experience. And in my world I was like how do we sensationalize the shit out of this thing and make it cool? Because that's really what the marketing, that's what marketing business is all about, right, and it is very cool. History.
Speaker 1:It's about, yeah, like the the angle on these kinds of things, and I think maybe this kind of connects really well into into colored diamonds and talking about them a little bit more, just because I I'm down to geek out about these things. If you are, it's one of those things, and I don't want to.
Speaker 1:I don't want to get rid of the magic, but I do kind of want to talk a little bit about like these diamonds. So the one I'm hesitant about is I sometimes feel like the marketing has almost jumped the shark and they're like salt and pepper diamonds, and then I'm just like those are just, you know, those are the worst diamonds, and I kind of think, you know, maybe worse is a terrible way to frame them.
Speaker 1:One thing I always wonder, though, is I could tell you what that is yeah I could say freely what I want on here, right, of course, absolutely let it rip, because it's you're the business owner and in the end, I'm just you know it's, I gotta be me.
Speaker 3:That's anyone who knows me in the trade. That's what it is. You get what you get, so salt and pepper diamonds. Right here you have a mining operation that's getting all these goods and they're cutting them and they're it's shit, literally. However, there's beautiful shit out there, right, you can glorify anything and turn it into something good, and essentially, all they did was they took worthless material in the fine gemstone world is what it's classified as worthless. I mean, it's what it is. It's diamonds with a lot of inclusions in it, right, and they just kind of made it cool salt and pepper.
Speaker 3:And they mounted up in some cool yellow gold and took some Instagram Etsy pictures and lo and behold with the, with the power of Instagram and social media they're kind of cool and it's cool. And so you're making this segment of like really inexpensive diamond jewelry.
Speaker 1:That fits a market. There's a market for it. But it kind of almost reminds me of, uh, for example, um, you know oxtail, you know the the cut of meat oxtail. So it's, uh, it used to be considered just almost like a throwaway style but, um, a lot of cultures were eating it and it was kind of like this super valuable, really flavorful spot. But what's so funny is then again it almost like goes beyond where it was and then suddenly oxtail soup is like considered like this high level and then it takes the price of oxtail, all like the you know folks that were eating it as like a value cut.
Speaker 1:Suddenly they're all like damn like these. These michelin star restaurants are buying up all the oxtail.
Speaker 1:Now oxtail is you know this much per pound as opposed to what it was when it was cheap and I sometimes yeah, I sometimes wonder if that's what kind of happens sometimes with diamonds and I was wondering if is there a way to kind of look through those things, like and see, is there more than just the, the four c's of diamonds when it comes to these things that you're looking at, because in the end I mean the diamond colors, is this spectrum? I'm sure that there's every color of the spectrum but, like, is there something you're looking at that makes it a more valuable one on there?
Speaker 3:well, yeah, so creating a commercialized product line, because there's segments of our products that we, you know you want to have a commercialized price points to this and that you know you're just kind of looking for a nice looking stone that can still carry the story. If it's a price point, you put in a nice piece of jewelry or design, something fun around it and it is what it is. Like someone coming in and spending $2,000 on a piece, you're still going to get something that's one of a kind in the color diamond category. It's true, right, it's not a let me blow smoke up your ass type of tagline. It is true, I can't duplicate that piece. I can make a similar style with another similar stone, but that particular stone one of a kind. So, another similar stone, but that particular stone one of a kind. So, yeah, that is true.
Speaker 3:And then, when it comes to the higher end, there's only so many of these types of stones in the marketplace, right? Just follow one character fancy ping, for instance. There might be 10 in the whole world on the live market right now. Maybe there's some in private collections that aren't publicized or not on the market per se, right? So again, you're going into a different type of product, different price point and even a different customer. So when you're presenting that type of product, you're, you're coming in there with all this cool education and cool presentation to allow them to fully understand what they're getting into. And most of the time they already understand it because they've done their own research and they kind of have a desire for it so that's the kind of clientele too.
Speaker 1:Yeah, yeah and that's exactly.
Speaker 3:They want something that somebody else can't have, and here there's one of 10 in in the market right now. Right a couple years ago, during covid, I remember flying out to this, this gentleman's house, uh, that was introduced to me through a retailer. We did the deal together and I sold them like a seven carat intense yellow. I think it was IF kind of cool. I think there was only one other one for sale in the world, on the market, so I was able to tell him that and I wasn't blowing smoke up his butt, you know, I was telling him the truth created a really cool experience, made a really cool piece and is, you know, very happy to spend the money.
Speaker 1:That's really interesting. What are there? Times, though, when people are like they want this and they almost work themselves into a corner where there's like, like you said, there's only two out there, or is there are there opportunities? Or times when you're working with a client they're like I really wanted to have these specs and you're like, well, unfortunately that doesn't exist right now. Does that ever okay, uh?
Speaker 3:happen, it happens. Yeah, I'm actually working. Actually, it's funny. You said that I met with somebody in vegas two weeks ago. He gave he gave me a project to work on uh, a particular shape, in a particular color and a particular weight. He says he's been working on this for four years. Hasn't been able to close anything. Of course I may. You know, I'm in, I'm close to the diamond trade and the supply chain, so I'm able to, through my network of people, able to source a particular stone in someone's collection and I'm able to present it now to the store. Right? So now he's going to take the information, present it to the client and hopefully make a nice transaction, and that's going to be retail will probably be over half a million dollars. Wow, that's incredible. Again, it takes time for these things to happen and you have to have the tenacity and the endurance and and all that stuff to to see it through.
Speaker 1:It sounds like you're almost kind of like, um, uh, it's like more along the lines of like a, like a, like a rare beast hunter or something like that, where it's like there's only so many of them out there, so many of them out there, right. I follow this one guy on uh on youtube and every now and then he pops up on my uh through the algorithm and it's this guy who sells private jets and the price, yeah, the private jet stuff is so interesting because what's fascinating is he already knows who's on the other line, even if they obfuscate it, because the number of people.
Speaker 1:You send me his instagram please. Yeah, I definitely 100. But he's like uh, you know they're selling this stuff for several million, you know hundreds of millions of dollars and there's only so many people that can pay for it and there's only this many billions, uh, billionaires in the world, and he's like, if this person, if this jet, is being interested and it's like a real interest, then it's one of these. You know 50 people, right? Is that is the community for these fancy stones? Is it that tight-knit, like you kind of know everybody that's out there, or are there?
Speaker 3:like these flyers that come in and out. It's tight, you, you, you pretty much get to know a lot of the people that are in it and you just take notes and try to learn what's there and and then again it's all who gets the business, who gets the call? You know, it's always. It's always the same type of scenario. There's 50 million millionaires in the world, right? How many 50 million millionaires can afford the jet? Yeah, exactly. Well, 1 million isn't going to do it, right? Maybe 50. That's still kind of cutting it close, still kind of cutting it close.
Speaker 1:What about is there? Is there any value in like dealing in, for example, like uncut fancy gems? Because, like you were saying, like there's only so much, and you were in your presentation you were talking about like the sourcing of these things, and then you have a you know an ace up your sleeve with knowing some of these cutters. Is that like your way of kind of getting more or less a leg up on some of this, this business, by having those two separate components, which is the rough cut and a cutter that you know can do an excellent job? Is that something that is like an angle you can work? Yeah?
Speaker 3:so. So there is part of that. Everybody that's got a good cutter like an angle you can work. Yeah, so there is part of that. Everybody that's got a good cutter has an angle right.
Speaker 3:The interesting thing about the diamond world like if I buy a stone that's finished right and I can see that there might be a color increase or a potential upgrade on the stone, you know, maybe the last guy's cutter didn't see it, maybe my cutter did, and vice versa. Maybe there's a project that I'm working on that I can't complete right. Then I sell the stone because, like I don't, I don't see any more upside. I'm also just sell the stone. I have it right. I can make some money. Next guy can take it and do what they want. Maybe the next guy buys it from me and his cutter sees it differently and they're able to cut it. So it's kind of like there's a science behind it. It's a, it's a real form of art, um. So yeah, that's a, that's a part of the trade. Uh, buying rough is.
Speaker 3:Buying rough is interesting, is an interesting scenario. We just started this year really buying a lot more um out of canada and um, it's kind of cool. I think. If you, if we wanted to, I can get stones cut overseas, in india, let's say, for 150 to 100 dollars a carat. Right, that's what. That's what they cut, you know, cost me per carat, which is cheap. But my guy that's local to me, that I use for other higher end stuff, might charge me more. But again, I can kind of control the way the, the end result's going to be in terms of how the stone's going to be shaped, the, since you know the scintillation, the brilliance of it. Like we kind of really are able to just have more control of maximizing the potential, which makes, in my opinion, a prettier stone, which allows you to have a premium on the market more upside, and, of course, it differentiates yourself from everyone who's just cutting stones in India.
Speaker 1:Wow, it's so fascinating to me.
Speaker 2:I see.
Speaker 1:I apologize for this not being a very linear conversation.
Speaker 2:It's very much it's like hey, I'm really interested in this.
Speaker 1:I'd love you just to explain everything to me.
Speaker 2:Here's another one.
Speaker 1:Uh, for example, I follow this guy on on again a different guy on YouTube. He's, uh, I think it's Ari, uh, ari, the gem guy. So he he a lot of the time he's working in New York and he buys stuff over the counter and he sells stuff in lots. And so how often are you buying? Are you typically buying these fancy stones, um, in singles, or do you? You is there an opportunity to buy in lots and lots? I, at least. For me, what I think lots mean is like parcels, that's, I think, actually the more of the term. So do you? Is that like kind of an angle? Does that increase the value or is that actually? It seems like when you're selling a parcel, a lot of times the price is actually coming down because they're in in groups. It doesn't seem like it actually behooves you to do that yeah, so.
Speaker 3:So if I buy in parcels, you're gonna get you're gonna get a discount on the price per carrot which allows you to average cost, right. You're always going to have excess material out of that parcel, even if it's polished goods. That are going to be your dogs and your winners, right? So then you're able to take your winners, maximize your profit and then you do what you can with the dogs, right? So there's that angle.
Speaker 3:We do buy stuff like that, depending on what it is, and then in the higher end stuff, like a lot of times I'm getting leads from stores, clients that own stuff for 20 years, 10 years, 15 years, whatever that want to sell. I just actually bought something last week off of an auction house, which was kind of cool. There was an opportunity to buy something off auction, so I paid even the auction there. You, you know, buyer fee or whatever it was, you know, still okay, it's still a retail type of deal, but you know there's value there. I saw opportunity and I, you know I hit the strike, the strike, as they say, um, so things come from all over the place for us.
Speaker 1:Yeah, mainly because I was thinking about, for example, there's this one watch company, which I won't even mention, uh, that does a rainbow watch and, you know, has rainbows right around the bezel and it's. I mean, it's just incredible, yeah, yeah. And what I always think about, any time I see it, is man, that must be so hard to get a parcel that is the full spectrum, because undoubtedly you're going to have, like you know, 90% of it. And then it's like, okay, I need a stone that sets in between this color red and this color orange, because that's the way the spectrum works.
Speaker 3:Well, and in their case, in the gemstone world in particular, it's a little easier to cut the material. In the gemstone world in particular, it's a little easier to cut the material, so it's it's a little easier to mass produce that a little bit more in volume than it would be in the color diamond world.
Speaker 1:Oh, interesting, I didn't even notice. I didn't know that that would be a there'd be you know a level, a degree of difficulty compared to it.
Speaker 3:I mean there's. I mean it's not easy. Like it still takes time to color match these rainbow color gemstones. Like it's definitely a thing, but like if you have a supply chain for it, like it's the materials there so I guess I mean that ties in very well with um, these names.
Speaker 1:So obviously there's champagne, diamonds, which are slightly yellow, um, and then there's, I mean this argyle. Argyle pink is, I think, what you're most well known for, or at least what I've seen from you. Yeah, how is there a, is there a determination or kind of like a rule set around these colors that makes it this and not that? Because, for example, like, how do you know it's argyle pink and not red and how do you know it's not?
Speaker 3:you know white with like a little bit of pink, most of the reds are actually most of the reds that exist in the world, all of a few hundred of them. All come mostly from the argyle mine. There's a few that exist out there that are from a brazilian mine, um, but most are argyle um. So what you're going to see in pinks in particular is you have like a type one and a type two type material, right.
Speaker 3:So argyle type two, type two, a materials are going to typically be outside of the argyle mine. It would be more of like a South African mine, south American mine. They're going to be larger in size and they're going to be more pastel-y in color, right, they're going to be larger in size and they're going to be more pastelly in color, right, they're going to be more of a pastelly pink where the Argyle mine had a nitrogen rich environment, and these stones are typically going to be smaller in size but very, very vibrant in color, like very, very rich pink, very rich red, right. So that's that's kind of the main to to distinguish from an Argyle pink versus a non-Argyle pink. Then you have, like your Russian material, right? Russia was very known for like their purple diamonds, right. So like a lot of the purplish pinks or those that type of material it could be. Most of the time is going to be found out at, like Russian, russian mining operations.
Speaker 1:Oh, that's so fascinating that they're to me. Honestly, I just kind of assumed that it was like, yeah, they got this diamond mine and most of them come out white. Some of them come out, you know, a different color, but there's more.
Speaker 3:There's more scientific testing that you can do to like to test the material, to really confirm all that stuff. But most of the time, like the trained eye, like if I loop a stone from from, uh, from, let's say, a purplish pink from russia, right, like it's typically going to be, like a more grainy diamond than, let's say, an argyle stone like or non-argyle stone.
Speaker 1:You know, you could see, you could just see the way the crystal is on the materials that from where it's basically coming from in the world, kind of interesting so, when it goes to the color, is there like, uh, it has to be this color, this level of saturation, to be considered a red diamond, because obviously calling it a red diamond, and then someone takes a look at it and they're like, ah, man, that ain't red. Is there like a grading process and it has to meet a certain criteria?
Speaker 3:Yeah, so there's a color spectrum wheel and GIA uses that very stringently when it comes to grading in their laboratories. But when you get red, let's say you get a fancy red. You're looking at that stone, you're like, damn, that thing's red. Right, that's kind of how that would work, right. And then when it knocks out of that realm, you can have like a purplish red, you can have brownish red, you can see red, brownish, brownish red is the thing. Values are obviously very different between a pure red and that. Purplish reds are a little bit less typically, but still expensive. And then when you go into the pink category on the color spectrum, you have your fancy light, fancy fancy intense, fancy deep and fancy vivid and those saturation. That saturation is is what they call the saturation right and the hue of the stone, and you can see just kind of the richness of what that looks like in the item really interesting and yeah, I mean we always love talking about, you know, the showstopper centers.
Speaker 1:What's the uh, what's the market like for, for example, from, for melee? You know like, uh, for these small you're talking about, argyle typically produces smaller stones and yeah, it's so funny, I, I you say smaller and I'm like, ah, probably only three quarters of the carrot, but it might be more like you know one, yeah, yeah, one pointers one and a half pointers, those are small melee a lot of times we're using that and the accent stones is for the diamonds um, there's a market for it.
Speaker 3:I mean, we're always shipping out melee, uh, for custom rings, custom deals. Um, and again, the same thing carries true with the, with the melee. When you have like a vivid pink melee or you know an intense pink, five pointer, for instance, could be like 30 to 40,000 a carat depending on the size and all that, right. So you know, like, for instance, last year we did a deal with the store custom ring seven pointers. I think it was like a. It was like a 40, $50,000 deal, all said and done in the ring, just melee, wow, that's so crazy to think about. And then we had it certified. They wanted like a color cert, so like it was to think about. And then we had it certified. They wanted like a color search. So like it was, it was a full presentation to the consumer and that's and and everyone loved it, are they?
Speaker 1:typically in. They have like an end goal with these pieces already mapped out like ready to be set, essentially, or are they buying the stones and then they're going to figure out what to do with them based on what they buy?
Speaker 3:well. So in this case they already had something in mind. So we kind of backed into the whole thing saying, okay, if you want this end design like this is what we need to do, this is what's available, take it or leave it. That was essentially how that played out, um, and then in other cases, yeah, there's most of the time you, you know, sometimes you buy stone and then you design around it.
Speaker 1:Yeah, that's a very common thing in the in the process sometimes, because you know, when I, when I paint, I start with the most interesting subject. I usually start from the center and I build out, and I think that's kind of how, a lot of times, how jewelry is done. However, uh, it almost to me, I think what I would probably do is just like design the whole piece and then it's like whatever you get for the center is what the center is going to be, but I can see how that might fluctuate depending on.
Speaker 3:It could be a problem with these rare one of a kind.
Speaker 1:I can only imagine man.
Speaker 3:I just sold a blue diamond out of one of our finished rings this year and it's like, now I have this beautiful ring with a hole in the center. The hole in the center, what the hell am I gonna put in there, you know? And it's like you got 10 grand wrapped up in this thing and it's us it's like, well, I might just sit on that for five years before I find the perfect stone to go in there.
Speaker 1:Yeah, one last question I guess I mean that. That begs a great, uh, a great question how often are you locked up with these stones? When you're dealing with these products that, can you know, range, crazy prices? I'm sure that you see these things come around. It's like, oh, it was too good of a deal for me to pass up. But now you've got to move it and I know enough about dealing things that sometimes you have a stinker that you know was going to be a winner, and then you know you can only have so much of your cash flow locked up before it becomes a problem. Is that something like when you're dealing? Is it like you're almost doing consignment from one place to the other until it eventually connects and then it just sort of flows together? Or do you actually have to be a pit stop for these stones?
Speaker 3:Sometimes we hold for quite a while you know, in some cases, if I can buy a stone really well, then I don't mind. If I want to, let's say, let's say I want to move it Like there's a stone, there's a stone. Right now I'm working on trying to get a nice you know a nice color out of it. I'm not going to disclose because I want to take it, but it could be worth a lot of money if it goes my way. But in the interim, if it doesn't go my way, I bought it at such a good price that I can probably offload it to the marketplace, to another diamond wholesaler that might want to sit on it, design a piece and do the same shtick that we do with other stuff you know what I mean and then I can just walk away, cashflow it and keep going.
Speaker 1:I see, yeah, Sometimes I mean, I guess, having things that are easier to move, then it's like you know, your, your risk is a little bit more minimal.
Speaker 3:But there's always. You're always sitting on something it's just part of the just part of it, you know, but something it's just part of the just part of it, you know. But but I don't mind it. Right, I don't mind it. There's certain stones that I don't care if I sit on it, because over time they just continue to appreciate value. I mean, obviously there's a capital cost to that right. How many times could you turn that money? You know, make 20 on it or whatever that looks like. You know, there there is that angle of it, but you always, you know, it's like every other business you try to keep an element of cashflow going and that's how it rolls. Yeah.
Speaker 1:Kyle, we're going to take a quick break and then I want to talk to you about cutting and maybe even a little bit about labs. So everybody, stay with us. Punchmarket is so excited to announce the launch of our email marketing campaigns crafted specifically for jewelers. Take your jewelry store's marketing to the next level with Punch Mark's email marketing service. We created tailored, data-driven campaigns that will not only engage your customers, but also boost your sales. Whether you want to be hands-on or prefer a fully managed service, we deliver everything you need to stay connected to your audience and increase your ROI. Let's grow your business through the power of strategic email marketing. Learn more at punchmarkcom. Slash email dash marketing. Again, that's punchmarkcom slash email dash marketing. And now back to the show. All right, everybody Still speaking with Kyle Pancis.
Speaker 1:So, kyle, we were talking about the advantages of having these cutters in your I don't want to say your back pocket, but like having a good relationship with them, and how there are advantages to using someone you know relatively local versus overseas. First of all, what does that relationship look like with building a relationship with a, with a diamond cutter? What are the? I've never actually spoken with someone that's a diamond cutter. I'd love to at some point.
Speaker 3:Wait, maybe I get you involved with somebody. Listen, when you go into Manhattan, in in in this particular case, that you're usually in a hole in the wall type of a room. Sometimes there's three of them, sometimes there's four of them, sometimes there's two of them. Um, sometimes there's like a factory of them where they all have their little llcs and there's like 15 guys with wheels lined up. You know it's a very under the radar type of in part of the industry it's kind of actually old school as anything could be right. That's cool and it's cool, it's very cool.
Speaker 3:Um, they're like any of us. They like to have a cigar, a cigarette, a drink. You know they talk about politics at current events. Sports like this is uh, this is what goes on right in the shop, if you will. Yeah and um, yeah, it's. It's cool, very, very interesting part of the business. Over time you develop just trust and relationships with these guys and some cutters have specialties in other areas more than others and you just try to figure out and navigate what fits your, what fits your needs, for you know, for what you're doing.
Speaker 1:I was going to say so. Like do some of them specialize in? Like I'm trying to understand the when you would need like an expert level cutter. Is it like you'd get like a rough stone and it has like a crazy inclusion and it could ruin the stone and this guy is going to be able to resuscitate it or be creative about it? Is that what it is, or is it more? I don't know.
Speaker 3:Like but when you're cutting from the rough we're cutting a stone right now with that exact scenario it's eyeballing where the inclusion is in the stone and then you try to set up where you want to put the crown, angles and the girdle to try to navigate that inclusion to make sure that the stone doesn't just fall apart on you Right, or make sure that the inclusions in a specific area. If you can try to finish the stone in that area, maybe it's off the side where it's eye clean. In this particular case we might end up having an SI2, borderline, i1 stone. We were shooting for a 10 carat and we're going to be at seven. It kind of sucks, but at the same time Seven carats, holy smokes.
Speaker 3:At the same time, the stone isn't going to just fall apart because of this big glitz in the crystal. You know what I mean.
Speaker 1:When you say fall apart. Is that actually a real thing?
Speaker 3:I mean, if you are cutting the stone and it's under that much stress right, and you hit something wrong in terms of the inclusion, it can break.
Speaker 1:Wow, holy smokes. I guess I just never, even when we're always taught diamonds are really hard. So I just never kind of thought that would be a possibility.
Speaker 3:Very risky part of the business.
Speaker 1:Yeah, and are you designing it Like?
Speaker 3:so you have, like the I don't know, some type of scan and then you're making the decisions ahead of time, or is it like how much? So, in this particular case, we'll scan the stone.
Speaker 1:And then, yeah, you take a Sharpie marker and we meet and we draw some lines on the stone as to what the plan could look like and execute it. That's so cool. Do you think that, though, that that particular skill might start being phased out? Thing I've seen, uh, robots be very good at.
Speaker 3:It is hyper, hyper precise, repeated movements, um that and, and they can mill down to the, I mean just uh a crazy level of detail yeah, I think if you're going in the world of ai robots, um, I mean, we're way too far away from it. I mean you're probably about five, at least five, at least five years before anything can really start something, maybe sooner. I know there's people working on it, but I think, more from the commercial end of the business, I think you can start to see technology kind of playing more of a role, you know taking over. That I can see it for sure. I think, in terms of, like the really one-off scenarios that you and I are talking about earlier in the podcast, with you know changing a rare color of a stone.
Speaker 3:I think there's still going to be a personal touch to that because it's no, it's so expensive, it's so expensive to risk. You know, like, if you're working on a couple hundred thousand dollar stone and you and a robot screws it up, right, I'd rather it be, I'd rather it be in a human's hand. To be honest, it seems sacrilegious, if you will, in terms of technology and trusting it. But like, I don't know, I'm kind of an old school guy when it comes to that, but I think there's a place for it in the marketplace with AI cutting for sure.
Speaker 1:Well, I mainly think about, for example, iteration. Place with the, with ai cutting for sure. Well, I mainly think about, for example, iteration. Um, to me, the best way to use ai right now is just iteration. It takes a lot of the the legwork out of things if you have the idea and you can see the final result. How you get there in the middle is sometimes a lot of times. It's just iteration, and what I was thinking about is like you were talking about with, yeah, you just got a sharpie and you're kind of have this scan of the image and you're trying to navigate around, uh, an inclusion of some sort. To me it it seems like that would be where you could find the way to get the best cut out of this with this inclusion, and I feel like if you trained it enough times, I it's gonna do.
Speaker 3:that's where it could be. It's going to for sure. I mean, we have some time for it, but it's definitely going to happen yeah.
Speaker 1:I mean on the topic of unsavory and unsettling, but I guess maybe kind of exciting. If you don't mind, I'd love to talk about lab diamonds and definitely something very extremely polarizing in the community and the one thing I've learned though consumers not that polarized by it. They are kind of just like they don't really care, and I think that's what I love it's well, I think.
Speaker 3:I mean it's a very complex issue. Um, fundamentally, I can't stand seeing what the lab business has done to the industry.
Speaker 1:I really can't um, just like from a business, uh strategy or ethics standpoint, or what do you mean?
Speaker 3:both sides of that ethics um strategy. I mean, these lab companies are selling stones for 50, 60 a carat, depending on what it is right, and these guys are busy, they're coming here from india, they're setting up an loc, they open up a desk in an office and all of a sudden there's another lab guy selling it for five dollars less than the other guy over here. Um, and then you go into, like the natural diamond guys and some of them are like it's quiet well, because if they were stocking one, two, three carat stones of white diamonds, that whole market has gotten really affected by the lab, unfortunately. However, on the flip coin there's opportunity because on the if you want to talk natural, for instance, you know four or five carat stones, six carat bigger, the guys buying those stones still want those stones. They're buying them because it's a hard asset, it's got a history to it. They know that. They're putting their money there. You know it's going to be there. So there's that On the other side of that coin.
Speaker 1:I think the lower the price. Third side of this coin, if you will.
Speaker 3:Yeah, right, when you go back to the lab and you start looking at the prices continuing to drop. It's like, okay, well, 25 years ago, when Moissanite came out and it was $300 a carat, it was the same concerns in the marketplace. And then eventually, moissanite was like 50 cents a carat or a dollar a stone or something right, and now, all of a sudden, the consumer is not interested in that because it's so freaking cheap. And I think the same thing will happen with lab. I mean, the industry goes through fads every 10 years. You know, when I came into the business, it was right after the recession of oa and, and the industry was still struggling with that and and and the whole economy, if you will, really, um, but in in that particular time, it was pandora beads. Right, a lot of these stores were kicking off pandora beads and that was how they were staying in business besides buying gold off the street. You know. So the, the stores that are selling lab, and they're making, you know, five times their money right now. I think that's fine, good, good, good, I'm with them, I hope that they. I'm all about making money. I think it's fine, um, but I think at some point that it's going to, the consumer is going to wake up and when you already start to talk to stores now, you can start to hear that naturals are starting to come back into play from a percentage point. So that's good. I'm not against lab, if you will. Like people are making money, I mean we. I don't invest my money in it per se, I'm I like naturals. I think the naturals make more sense to the consumer.
Speaker 3:Um, if you want to talk fundamentals of, like wealth transformation, you know like, obviously, when you buy a diamond, you're paying.
Speaker 3:You know consumers are paying. You know a retail premium, but over you know consumers are paying, you know a retail premium, but over time, you know markets do appreciate in value as an asset. And, um, I still like to think that I don't sell all my stones as assets per se. But if somebody has got, you know, a big net worth and they want to sink money into something that's a rare art, like people do in the art world, and you call it rare art, as in terms of a diamond, you know like it's the same type of concept, like, um, like last week or, yeah, just the other day, there was another auction record for pink diamond you know like $14 million for whatever the size I forget the size of the details, but it was another record setting price which drives prices up in the real market world, in the natural market world. So there's that too. Um, that's my, that's kind of like my high level take on lab very interesting.
Speaker 1:I love having a and you're much more well informed than I am going to jcp, if somebody wants to buy.
Speaker 3:If somebody wants to buy six carat total weight labs as a, as a costume earring for studs, for instance, you know, and it costs them 1500 bucks right now. Whatever that looks like, Got a place. Would I put it on my wife's ear? Probably not but that's me.
Speaker 1:Yeah, but that's a. That was one of those things. I was talking with a lot of jewelers, especially the ones that I was just becoming more friends with. For example, I was talking with this guy, um bobby, at cellini's, and we were talking with him a lot and he was talking about like you know what labs were great for the company and they to me.
Speaker 1:I. I think we will look back on this span of time. This is me from a very from a web designer standpoint. Uh, I think we'll look back on labs in much in the same way that we look back on, like um, cash for gold, in that it was a very like important and impactful stage of the jewelry retail kind of life cycle and, like you know, do I wish cash for gold to come back? No, I kind of thought it was tacky and like it was before my time. I think it was like really that's when I was.
Speaker 3:That's when I got started.
Speaker 1:And you know what man and like. Do I like love it, it's like not really. It's not really the part of jewelry that I really like. However, it kept a lot of jewelry stores from going out of business in a very difficult time and I think that right now we're seeing that for labs too.
Speaker 3:Right now we're going back into a flux. You know, a lot of the guys that were making a boatload of money on lab the last couple of years are starting to like see struggles with that because, I mean, I don't know, their revenues have to be dropping right. I'd rather be selling a $10,000 diamond, making 20%, than a $300 diamond and making $1,500. Yeah, bucks, yeah, yeah I see what you mean talking about cash flow and revenue and and all these things like it changes. It changes the business.
Speaker 1:There's a huge impact on that and does that ever creep into um, you know the fancy diamond, uh, space, because I know that they can be just I just for fun.
Speaker 3:A friend of mine just bought a vivid blue radiant like carrot sized stone thing. Looked like vivid blue, beautiful, like if it was a natural vivid blue. It would probably be worth well into the millions, like probably easily five, six million dollars. And he threw it at me because the ruler and I looped it.
Speaker 3:I'm like this is lab like it's so, it was too perfect, like it just doesn't make any sense, um, and then, of course, he paid 200 for it. You know what I mean. It's like well, should you make a jewelry line around it? Well, I don't know kind of cool.
Speaker 1:It's a you know what I'm. Uh, I would never tell people what to do with their business. I'm just glad that there's options out there. I think it's fascinating.
Speaker 3:It's a category like electric car Definitely a category. I'm never going to buy an electric car for me, but maybe one day I'll buy it for my wife. It's kind of cool. It's a category, definitely.
Speaker 1:Yeah Well, Kyle, anything that you want to wrap with. If people were interested in learning more about your business, where can people go to start learning more?
Speaker 3:Great question. You guys can visit my website, gemsbypantscom. I do vet who gets access to it. We do have private information on the backside once you log in. That being said, we have a lot of education, have private information on the backside once you log in. That being said, we have a lot of education on the website on the backside. And then, of course, it kind of gives you access to some product pricing as well. And you can also follow us at Gems by Pantsys on Instagram. I do have a YouTube channel, but it's always tough to keep be consistent with the YouTube stuff.
Speaker 3:A lot of people are all about the social media. Our business relies on social media, but that's not our main driving force as a wholesale company. Um, so it's always an interesting what do we post, how, where, when, what? But best way to reach out is also Instagram. Um, you know it comes to my phone, so we're a family business, so if somebody messaged me, I'm the one know it comes to my phone, so we're a family business, so if somebody messaged me, I'm the one reading it. Maybe one or two other people have access to that account and then, of course, you can always text me or call me on my phone. Cell phone 973-800-3717.
Speaker 1:I have a lot of fun in the industry with everybody that we get to know, so I look forward to helping anybody so cool and Kyle, I think that's one of the best everybody that we get to get to know, so I look forward to helping anybody. So cool and kyle, I think that's one of the best parts about um, the the industry as a whole. You know, I got a chance to meet you at the client workshop. Now we're doing a podcast because I thought it was really interesting hearing you talk about, uh, kind of a part of the jewelry industry that it's almost feel like people don't don't talk about it as much because it's almost. It feels very, um, I don't want to say exclusive, but it's like very lofty. Yeah, maybe exclusive is the right word.
Speaker 3:Yeah like exclusive and and and. The best thing that I love about this business, this industry and not even particularly to what I do in general, but just as a general statement is it's very easy in life and in a career to become complacent, and I think that the way our industry flows with trends, new designs, whatever the theme might be, there's always really fun opportunity to be creative in a different way, and whether that's from a business perspective, from a designing perspective, from a product that you can purchase to make money on, or an array of products, like buying parcels of goods and making a sick, crazy piece of jewelry out of it and all of a sudden you turn, you know, you know, a couple of thousand dollars into tens of thousands of dollars Like that, those are the opportunities that exist in, in in the business, and I think that the diamond industry, the jewelry industry it's a really fun business to be in. We love that.
Speaker 1:You know. Thanks so much, kyle. We'll have to do a follow up sometime and I really appreciate your time. Everybody will be back next week, tuesday, with another episode. We'll give Kyle a follow up, all right, thanks everybody. Bye. Thank you, all right, everybody. That's another show. Thanks so much for listening. This week I had as my guest Kyle Pances with Gems by Pances. He was a really great guest. Make sure you check him out in the show notes below. This episode was brought to you by Punchmark and produced and hosted by me, michael Burpo. This episode was edited by Paul Suarez with music by Ross Cockrum. Don't forget to rate the podcast on Spotify and Apple Podcasts and leave us feedback on punchmarkcom slash loop. That's L-O-U-P-E. Cheers. We'll be back next week, Tuesday, with another episode. Cheers, bye.
