Nick Kozak for the Toronto Star
Case Studies

Fledgling jeweller relies on contractors to succeed

Vital Stats
Name:
Kimberfire
Address:
27 Queen St E #1004, Toronto, M5C 2M6
Contact:
(416) 861-8110, info@kimberfire.com
Field:
Jeweler
Active:
1.5 years
Offering:
Custom engagement rings and jewellery online and in-store for lower prices than major retailers.

Kimberfire’s office is in a diamond compound of sorts. In place of razor wire and armed security, subtle black-eyed security cams and buzzer entries guard the non-descript office doors. Hidden amongst the fluorescent-lit hallways of this particularly boring looking office tower on Queen Street, is an all-in-one diamond compound filled with designers, wholesalers and setters.

 
As Jonathan Goldberg, founder of Kimberfire — a custom engagement ring and diamond jewelry retailer in Toronto — walks through the labyrinth of disparate workspaces belonging to the contractors that design and manufacture his jewelry, he consistently uses the word “we.”

Officially, Kimberfire is just Goldberg — a factor that helps him keep costs low — but he’s prone to calling this loose collective of contractors his “team.”

One of the diamond setters on that “team” mentions he works for more than ten different clients, half of which are his major clients.

“I hope I’m one of the top four,” says Goldberg, and the pair chuckles. But Goldberg is serious. These contractors are the backbone of his business.

 
“There are four or five guys I try to work with as often as I can because the work is great and I trust them,” he says. He wants to work with people he trusts who won’t cut corners and jeopardize the Kimberfire brand.

“But there’s definitely a lot of competing work and demand for their labour here,” he notes.

That leaves Goldberg struggling to find a way to incentivize and build a team from the medley of autonomous contractors.

When he launched Kimberfire in January 2013, Goldberg knew using contractors was going to be a part of the equation. In fact, his model was built around it.

He leverages his connections with the wholesaling industry to source his diamonds and consults with clients through his online store or at his office. The lack of a retail space or employees keeps the overheads low.

“There are a lot of providers who have low overhead models and lower prices, but they sometimes do it by skimping on the weight of the metal or using lower quality diamonds,” says Goldberg. “My price is lower because of my business model.”

But not having an official team means not having the right to insist employees prioritize a specific project, a predicament in the deadline-driven engagement ring business.

“I’m not ready to tell someone, ‘I’m sorry it’s going to be late’ — I don’t want someone to have to delay a proposal because of a mistake or if something happens during production and it has to go back in the queue,” he adds. “I’ve never missed a deadline and I don’t intend to, but that’s a constant fear of mine.”

Although Kimberfire’s volume of work is sporadic, ranging from several pieces of jewelry a month to back-to-back client meetings in a day, Goldberg’s contractors are steadily busy, laboring for businesses like his and contract jobs for major jewelry retailers like Birks.

An individual ring for a client might need only half an hour of a craftsman’s time. But mistakes happen, metal gets overheated and cracks or over-buffed and needs to be recast.

“It’s something that gives me a lot of stress,” Goldberg says. “I want them to be incentivized towards Kimberfire’s success. They all know each other and sometimes work closely with each other, but how do I take that connection between them and Kimberfire and strengthen the umbrella and make them feel like they’re all on a team?”

Becky Reuber, a professor of Strategic Management at the University of Toronto’s Rotman School of Management, admits it’s no easy task.

“In a lot of ways he’s more dependent on them then they are on him,” she says.

His challenge is also compounded by the fact that the contractors are used to working in close quarters with each other, so that social structure is already established.

“If they’ve been there for years and all know of each other, whatever social arrangement they have already is going to be hard to change,” she says.

His best bet at building a team, says Reuber, is by offering the contractors predictability and steady work.

“But I don’t think you’re going to incentivize someone by taking them out for lunch,” she adds.

Goldberg says he knows whatever the solution, it will likely require monetary motivation. But trust requires more than a pay out every time someone does a good job.

“How great would it be if I had an afternoon at a Jays game as if we were a company?” muses Goldberg.

He’d have to compensate them for missing potential work from other clients, but he thinks it’d help build the company feel he’s going for.

It’s a conundrum, one he admits will probably be in the back of his mind until he finds a genuine solution for incentivizing the hodgepodge of contractors he works with.

“They’re my team and like any team you want the best players. I spent a lot of time finding these guys — they’re my business’ competitive advantage,” says Goldberg. “We just happen to be separate businesses.”

EXPERT VIEWS

As Interviewed by: Rosemary Westwood

Jonathan has put together a very interesting business model, and he faces all the pluses and minuses that come with it. You have to nurture these contractors. You have to work with them. And they’re not yours to order around. They give you amazing flexibility, but the downside is they could walk. In this kind of relationship, trust is the name of the game. And that takes time. I think of it as a savings account — you need to invest to build the relationship. You have to let the relationship flourish before you can make withdrawals. You need to always keep them in your mind, and keep them engaged. He has to be very consistent and very open with them. That’s a challenge — to share more of your business with them then you would with your own employees. That includes forecasts and trends, the ups and downs. Ask them what their challenges are, and figure out how to improve the collaboration and solve their problems. That makes the contractors engaged, helps them better understand the business, and takes some of the transactional nature away.

by Theo Peridis, York

First, everybody who has suppliers has the same challenge. It’s not because these are jewelry designers and craftsmen. For me the most important thing is about goal alignment. Jonathan’s contractors are trying to accomplish the same thing — sell their services — and they’re independent business people, too. So he and they have aligned goals. As his business succeeds, their business succeeds. If he can continue to offer business, they’re going to continue to be motivated. Secondly, the relationship is very important. You need to be open and transparent. Say, “Here’s my plan. I don’t know if I’m going to succeed, but if you support me, and if I succeed, you succeed.” If they have the capacity, if they trust him and they’ve connected, why wouldn’t they take that shot? But if that business doesn’t materialize for them, they’ll move on. And what you don’t want to do is juice them — tell them you have all this business to make a lot of money, hustle them to treat you like you’re the goose that laid the golden egg, and then that promise never materializes. Be honest, transparent, and authentic.

by Neil Wolff, Ryerson

It’s all about how you treat people. Success in any company can really be measured by how well they treat their employees and the quality of the people they hire and maintain. So the key is empowerment, development and trust. Empowerment doesn’t have to cost Jonathan, and it can be easy. It’s about making people feel part of the team. If these guys have already bonded, he’s not going to break into that, so approach them as a team and ask, “What will make you happier at work?” Maybe that’s helping his contractors improve their workspace, or making the office fun. It could be taking them out for beers on a Friday — he’s on the right track with a baseball game. He can ask them, even, how he can improve their loyalty, so it’s not just about who offers the most money. That's where he’s going to have more buy-in from them. Development could be offering to pay for courses or organizing learning days where an expert comes in. And trust is going to follow from both of those. It’s built overtime, you can't demand it, and it’s a two way street.

by Deirdre Fitzpatrick, GBC

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