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When Mills Menser took over his family’s successful jewelry company, Buchroeders, he wasn’t interested in running just another jewelry sales business. Instead the third generation entrepreneur set his sights on how he could disrupt a very archaic industry.
He did it by transforming the business into a hybrid jewelry and financial company, pioneering the term ‘jewelry equity lending’, and creating a new capital market for investors and entrepreneurs to access short term capital for expanding their portfolios by borrowing against the equity in their jewelry. Today Diamond Banc, as the new financial division is known, has multiple locations across the U.S.
From as far back as he could remember Menser had an intense drive for business success. So much so that ending up in the jewelry business was initially more about maximizing an opportunity than the love of the industry.
He says: “My father and I discussed the opportunity for me to join the family business from an early age, providing my results and success at my job earned me that right.”
Having worked at the company throughout his childhood, Menser ultimately earned his place in the management ranks. At 18 he was their top salesperson and was made sales manager, attending night school and working full time during the day. Around this time his father began thinking of retiring, which led to Menser purchasing the company at the age of 24.
Almost straight away he decided to change the model of the business. “It was obvious to me that the traditional retail model was broken,” he says. “Clients demanded better pricing, category specialization, transparency, and a non-stuffy, yet still luxurious shopping experience. The company was performing and profitable when I purchased it, but in need of a re-invention to create growth.”
He came up with the idea of a hybrid jewelry and financial company by identifying a gap in the market. There were no branded luxury companies offering a menu of financial liquidity options to customers who wished to leverage the equity the jewelry items possessed as well as maximize their return in the event of an outright sale.
“Supplying capital is always good business and it became my true passion,” says Menser.
The Diamond Banc division was hatched out of clients’ needs in 2008. People wanted to sell items outright, but a few individuals inquired about borrowing against major pieces that they could not bear to part with.
While there were plenty of companies that sold jewelry there were virtually no well-funded, professional jewelry buyers with the knowledge to take every value-adding factor into consideration when purchasing diamonds and fine jewelry. Outlets such as pawnshops often lack the expertise to evaluate a diamond’s true value, and as a result, typically undervalue diamonds.
“I identified the lending requests as the service that Diamond Banc could be the best in the nation at offering,” says Menser.
Wanting to keep the retail division, Buchroeders, separate from Diamond Banc, Mesner opened the first Diamond Banc branch in 2008 in a small office a couple of blocks from the retail store.
“It was bootstrapped in the beginning, and started with $20,000 in a checking account,” he says. “I invested a nickel to make a dime over and over again. From there, I found support from traditional banks that grew with Diamond Banc. Next, we took on private capital in the form of loans, returning above-market interest but never giving up any ownership.”
In 2018 Diamond Banc partnered with Diamond Cellar Holdings, one of the largest privately owned retail jewelers in the country to accelerate the nationwide expansion of the brand and offices.
A unique aspect of Diamond Banc is that it is a digitally native company in a very traditional industry, topping national SEO rankings in search terms related to borrowing money against jewelry.
Menser admits that getting clients to ship their most valuable assets to borrow money against and trust they will receive the wired funds is a challenge. He says: “We overcome this with hundreds of positive customer online reviews, lots of educational video content, and an extremely professional, knowledgeable, and responsive team of great communicators.”
Diamond Banc currently has seven offices nationwide, which it plans to double within the next 24 months, and has executed and funded over 3,000 loans. Future plans include opening more offices in metropolitan areas, continuing to double down on online growth, adding designer handbags to its menu of accepted collateral, and achieving its target of having an active loan book of over $100 million.
Changing a family-run business that has done things a certain way for many years is no mean feat. Menser says that for a successful family business transition to occur, the new family member at the helm must possess the same or greater passion, ability and drive than their predecessor.
“Customers cast votes with dollars, and few care today if the business they engage with is family owned,” he says. “The concern is value, experience and efficiency.”
He also pays tribute to family for supporting his endeavours and to his father for giving him the opportunity that led to the launch of Diamond Banc, adding: “Many of the lessons I learned from him and the values he taught me about persistence, work ethic, confidence, results, marketing, accepting mistakes and taking responsibility continue to service Diamond Banc and Buchroeders.”
March 14, 2019 at 07:00AM
Forbes – Entrepreneurs