Fledgling jeweller relies on contractors to succeed
27 Queen St E #1004, Toronto, M5C 2M6
(416) 861-8110, firstname.lastname@example.org
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.”