When Jeremy Shepherd told his friends and family in 1996 that he was going to start a business selling pearls on the Internet, they told him he was crazy. Fourteen years later, Shepherd’s company, PearlParadise.com, is the world’s largest online pearl retailer and sells one pearl necklace every five minutes on average. What started out as an entrepreneurial venture selling strands of pearls through Amazon.com auctions quickly became a pearl industry force to be reckoned with. How did someone with no background knowledge of pearls, jewelry or e-commerce achieve this kind of success? Shepherd says he was just in the right place at the right time.
Taking a chance
It all began when Shepherd’s job as a flight attendant brought him to China. At the time, he was in his early twenties and knew nothing about pearls and their potential value. While wandering through an exotic pearl market, Shepherd came across a strand that he found particularly interesting and purchased it for $25. Upon his return to the States, a jeweler told Shepherd that the pearls were worth twenty times more than what he had paid. He then visited local jewelry retailers trying to sell the gems, but no one was interested. Then a friend told Shepherd about the success he’d had selling various items on eBay, and suggested that Shepherd try the Internet. That’s when he decided to take a chance: he cashed his entire paycheck, maxed out his credit cards and got on a flight to China to buy more pearls from the same seller—but not before putting the first set up for auction.
“When I posted my first auction on Amazon, I actually didn’t have the pearls, I had the idea. I’d only bought one strand of pearls,” said Shepherd. “[I posted] about forty strands. Every one sold.”
Going it alone
Shepherd's risky decision could have cost him his investment, but luckily he was able to purchase enough pearls from China to meet the demand. Over the next few years, he continued to travel back and forth to Asia, hand-picking beautiful strands of pearls to sell on various online auction platforms. In 2000, Shepherd decided to start his website, PearlParadise.com, so he could sell directly to consumers. Within the first year he made more than $25,000. Since then, PearlParadise’s sales have continued to climb—the company currently makes over $20 million in sales annually—and Shepherd hasn’t looked back.
By 2006, Shepherd had crossed the Pacific hundreds of times, learning as much as he could about pearls and their harvesting process along the way. It was then that he decided to invest in a pearl farm, something that no Westerner had ever done before. Because the company also does all the processing, Shepherd has been able to achieve complete vertical integration and keep his prices low – up to 80 percent less than traditional retail.
While offering low prices has always been Shepherd’s strategy, the recession led to a new marketing strategy . The company’s “Luxury for Less” campaign focuses on the affordability of the company’s product.
“When people shop online, they expect to save money,” Shepherd told BusinessNewsDaily. “If we can sell them a pearl necklace that they’d pay $1,000 for, for $200, people are going to buy online. With the recession, people aren’t willing to go to a jewelry store and drop $1,000.”
Perhaps this tendency to turn to the Internet to save money is one of the reasons that Shepherd has been able to increase his company’s revenue by 50 to 100 percent every year. Another reason, he says, is the ever-increasing number of people who do their shopping online.
“In brick-and-mortar retail stores, sales have been falling. As more people become more accustomed to [online shopping,] our available demographic grows,” Shepherd said.
For all its success, PearlParadise.com, Inc. has rarely utilized traditional advertising methods. Heavy use of search engine optimization , social media marketing and word-of-mouth have proven to be quite effective for Shepherd, who also created a site called Pearl-Guide.com that includes general information on the gems and a community forum on pearls. Talks with an agency licensing company are under way to help the company branch out, but Shepherd sees no reason to stray too far from what has been so successful up to this point.
“Social networking is bringing in millions of dollars in sales,” said Shepherd. “That’s still my main focus. It just takes time, knowledge, and expertise.”