GemEx of Mequon Sparkles as a Future 50 Company
Both Randall Wagner and Kurt Shoeckert think - and hope - that diamonds really are forever. They believe in that so much that they founded GemEx Systems, Inc. four years ago to provide unique diamond evaluation equipment and services to diamond and gemstone manufacturers, wholesalers and retailers. It looks like they had the right idea, because they've grown the Mequon based business so much that they were named as one of the 50 fastest growing companies in the area. The Council of Small Business Executives (COSBE) of the Metropolitan Milwaukee Association of Commerce recently bestowed that honor on GemEx.
They were one of only five companies in Ozaukee County that were named to COSBE's "Future 50".
When GemEx started in 1998, they generated under $200,000 in revenues. Last year's sales volume hit over $1 million, and this year should hit about $3 million, according to Wagner, the company president. "Next year we'll triple that," he predicts. "We've quadrupled our sales force, and our marketing strategies now include trade advertising, public relations, direct mail, telemarketing and testimonial marketing."
The company's original business model had them concentrate initially on small buyers and aggressively grow that sector. "But the big guys have found us," Wagner admits. Two of the largest jewelers in the world--Zale and Sterling--offer diamonds to their customers that have been evaluated by GemEx. Between those two companies and 400 J.C. Penny stores, GemEx evaluates diamonds in more than 2,500 retail stores around the country.
"We grade diamonds in a new way," says Wagner. "We utilize our Brilliancescope imaging spectrophotometers to measure a diamond's light performance - its white light and color light. It also separately measures a diamond's scintillation."
The co-founders of GemEx say that when it comes to buying diamonds, consumers are most concerned with color and light. "They want to get that 'wow' effect," he emphasizes. "Our system actually measures the light performance and sparkle or scintillation of a diamond. If it's well cut it has lots of light performance. If it's poorly cut it doesn't have much light and can look like a piece of coal. It's light performance that we perceive as beauty."
Wagner says GemEx has developed a simple linear scale, from high to low, for measuring white light and color light. "We measured thousands and thousands of diamonds of each shape and found what the best light performance was and what the worst was. It's a kind of bench marking," he explains.
"Our Brilliancescope does the measuring and provides a countertop viewer for jewelers. We put a diamond inside a chamber and a moving light source snaps six pictures of the diamond. Then the images are transmitted to us in Mequon and we process them for the measurements. We don't sell the Brilliancescopes; we actually provide them to diamond cutters and wholesalers. We own about 50 of them. Ten are now in Israel, five in China, two in Taiwan, several in Antwerp and a number of them in New York City. We get a deposit on each machine and are paid for each report we do," Wagner says.
"To give you an idea of the size and scope of the diamond business," he says, "about five million diamonds of a half carat or bigger are sold in the USA each year. That boggles the mind. In the world, about fifteen million are sold. If you go down to a quarter carat, it comes to about 35 million sold each year."
"By providing these Brilliancescope evaluations, we're putting more power in the hand of the diamond consumer. Now he or she can spend their money more wisely."