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What is a fair commission in the jewellery industry?

Background.
Worldwide, most mall jewellers pay about ten percent of turnover to the landlord, while stand-alone
jewellers gladly pay a commission to tour guides and concierges who bring clients to their doors.
This is justified as the mall owner has to advertise to attract customers while a guide brings the
client to the jeweller and often has to do translations. Most local tour guides rely on such
commissions.



The practice of guides receiving commissions on retail purchases can be controversial and might
raise ethical concerns. It could influence the guide to prioritize sales over the tourist’s experience
or preference, and to pressurise tourists to make purchases they are uncomfortable with. In some
countries, and with certain tourism establishments in SA, this practice is regulated or even
prohibited.



During Covid, most retail jewellers who were dependent on overseas tourists were forced to close
and lay off staff. With the return of tourism, they re-opened and had to “steal” staff from
competitors. Today, some of these jewellers are wooing tour guides and concierges with extreme
commissions and enormous prizes. For example, they offer up to 30% commission on every sale
made, a payment of R250 for every tourist brought to the shop whether a sale is made or not, and
lucky-dip prizes such as a seven-seater tour bus. A certain Cape jeweller even proudly claims:
“We pay the highest commission. If this is the best they can offer to attract sales, their business
model is unsustainable, and they are destroying the reputation of SA as; “The Land of Diamonds
and Gold.”



Inescapable Realities
A tour operator and guide should be aware of the following: :
* Diamonds and precious metals are priced in US dollars and not cheaper in SA because they are
mined here.
* Most overseas buyers have a jeweller at home that they trust more than an unknown jeweller in a
foreign country.
Diamond and jewellery prices are freely available on the internet.
An excessive commission kills a sale.
Benefits to an overseas jewellery buyer
* SA salaries and overheads are less than overseas and most of our retailers can operate with a
lower mark-up than jewellers in large international cities.
* Tourists can claim a vat refund.
* On holiday, couples have time to shop together.
* The availability of hand-made jewellery and unique African designs.

Experience has taught us:
– an open book between referrer and jeweller is required.
– a tourist needs to trust the integrity and expertise of the local jeweller.
– no sales pressure, not from the guide or sales staff, should be put on a prospective client.
the correct pricing, a wide selection of unique, good quality items, and a world-class service are
non-negotiable.
Please Note: 1. It
is easy to pay a massive commission and overcharge a naive diamond buyer. In reality, tourists
who buy diamonds in SA are likely to compare prices when back home. Others may find a price on
the internet – And if overcharged, they will speak badly of the guide who referred them and of the
jeweller.

2. A few years ago, Chinese tourists to SA were major diamond buyers – not anymore. The
excessive commission (25-35%) demanded by Chinese tour operators has all but destroyed this
market. Today, Chinese tourists will google a price before buying, and most Chinese operators
accept any commission as long as a sale is made.
What is the correct commission?
Worldwide, our industry normally offers a 10% commission, which usually applies to buses and
small group tours.
We believe a commission structure should be flexible, ranging from 10-15%, depending on
* the size of the sale,
* whether a similar item can be found elsewhere,
* what assistance the guide has provided.
However, referrers should note that large certified diamonds have a fixed international dollar price,
which limits the possible profit and, thus the percentage commission payable.
A unique diamond experience in Cape Town. Since 1982, tour guides and concierges have referred their diamond buying guests to Prins & Prins Diamonds because: We carry the right inventory, our expertise instills confidence, and we know how to sell diamonds and fine jewellery to tourists. Our success in selling to tourists is undoubtedly the best in Cape Town due to a balance between our markups, discounts allowed, and commissions payable. We take a moderate profit, pay a reasonable commission, and make the sale. Better a sale than no sale, and a happy client benefits all. Wouldn’t you agree?



What we offer At Prins & Prins tourists can:


 Browse through extensive showrooms or enjoy a private consultation.
 Visit our Museum of Gems and Jewellery.
 Watch and interact with our goldsmiths.
 Relax with a drink in our indoor garden, or
 Listen to a talk on the historical importance of Huguenot House.
We offer an incomparable destination for Natural Diamonds, Tanzanite, Coloured gems, and
bespoke handmade jewellery. See more at: www.prinsandprins.com.
Thanking You
We appreciate the trust of our local tourism partners and thank them for their referrals over four
decades.
Invitation
Tour guides and operators that are unaware of our business are invited to Huguenot House for a
coffee and to discover the unique diamond experience we offer. Those familiar with our operation
are invited to see the new additions to our Museum and showrooms.
Dr Petre Prins


PRINS & PRINS DIAMONDS
Expertise – Integrity – Quality since 1982
Huguenot House, 66 Loop Street
Cape Town
021 422 1090
www.prinsandprins.com

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