[jshepherd]

Correct. Material sizes available from first-stage processors went from 25/75 to 50/50 and now 75/25 (percentage of pearls falling below the middle range). These are the processors on the production and collection level and they set the sizes every year. They are the same ones responsible for dropping the material MM sizes too. The 75/25 does not mean every necklace is going to be the same, of course. But the average across the industry that it creates is an overall smaller average size.

The processors hate this (second and third stage). The buyers hate this. But there is nothing they can do because even the medium-size processors who do own farms are very dependent upon the large producers and collectors in order to have any volume of high-grade production (the percentage is just so small).

We have been switching our inventory to half MM sizes. Soon, we will only be selling the upper half MM of each size. In the past we have been separating materials to reach exact sizes (in China, not here). But it has gotten more and more difficult, especially around the center of the strands due to the new 75/25 rule. By switching to .5 we don't have this problem any more.

[pearlescence]

there are noticeable differences, even from the same source in terms of diameter ratios.
But I think what we are all agreed on is that strand length has shrunk to an unacceptable shortness - so that now out of two strands we can only just get a decent necklace and a bracelet when only a few years ago it was one strand one necklace.
I happen to have some different strands here on my desk and the measurements are 15 inches, just under 16 inches, 15 1/2 for a strand of AA 11-12 white 15 for some big lavender ovals and 15 for some granulated/rosebuds. 15 with an 8mm ball clasp makes an uncomfortable choker on me and my neck is not huge!
I think 16 or even 17 should be the norm - thoughts P-Gers?

[pbazar]

In my experience I do not find buying from Hong Kong carries a premium. I have dealt with both Hong Kong and Mainland China. Unlike Tahitian where it is worth processing myself FW is not. The cost of freshwater is so low that processing stringing becomes the most important component.

The Hong Kong dealers have cash to buy pearls from the farms and process the material in china themselves. There is no strategic advantage that the Chinese dealers have over their Hong Kong counterparts.

When it comes to low end goods there is no bottom on either side. HK dealers tend to specialize in specific areas such as high quality , keshi or dyed.

They do tend to work in higher volume and will charge more for what they consider retail.

I have never had a Chinese dealer beat a HK dealer on a volume order.

Let me give you an interesting story going back to the 80s when I was invited by the Chinese government to have excusive rights to CFWP for the US market. After banquets and much pomp and ceremony I was offered the rice pearl strands at the best government rate but on my return to HK the same material was cheaper. I asked why? My friend explained that they pay the same price as was offered to me but they change their money on the black market first so their real cost was much lower.

They have been doing this for a long time.

[Mikeyy]

This thread started interesting and has come full circle back to confusing. I think I'll just go shopping and figure it out. The prices seem so good now that I think this becomes a bit of minutia after a while. Its all good info but I am sure each of us will have differing experiences at some point. Based on the volume and quality we seek.

But I still appreciate the article.

[jshepherd]

Originally Posted by pbazar

In my experience I do not find buying from Hong Kong carries a premium. I have dealt with both Hong Kong and Mainland China. Unlike Tahitian where it is worth processing myself FW is not. The cost of freshwater is so low that processing stringing becomes the most important component.

The Hong Kong dealers have cash to buy pearls from the farms and process the material in china themselves. There is no strategic advantage that the Chinese dealers have over their Hong Kong counterparts.

When it comes to low end goods there is no bottom on either side. HK dealers tend to specialize in specific areas such as high quality , keshi or dyed.

They do tend to work in higher volume and will charge more for what they consider retail.

I have never had a Chinese dealer beat a HK dealer on a volume order.

Let me give you an interesting story going back to the 80s when I was invited by the Chinese government to have exclusive rights to CFWP for the US market. After banquets and much pomp and ceremony I was offered the rice pearl strands at the best government rate but on my return to HK the same material was cheaper. I asked why? My friend explained that they pay the same price as was offered to me but they change their money on the black market first so their real cost was much lower.

They have been doing this for a long time.

Peter,
When was the last time you were in Zhuji to buy freshwater pearls? Have you ever gone in person and priced out different processors there?

The difference is 2-300%, sometimes more. In fact, many of the small and medium-size sellers in Zhuji also have offices in Hong Kong and keep separate pricing scales (Shanxiahu Pearl, for example). A typical negotiation cliché in Zhuji is "that's Hong Kong pricing!"

Most of the larger sellers in Zhuji keep their prices on par with Hong Kong. Grace will not even attempt to sell to Zhuji and refers all buyers to their Hong Kong offices, although they process their large orders (like Honora) at their Zhuji facility.

As for strategic advantage on pricing, China most certainly does have it. Hong Kong is expensive, very expensive. China is cheap. Some of the larger players (like Man Sang, for example) do buy and process their own materials. But they process them in Shenzhen and sell in Hong Kong. Their prices, even at 50% wholesale discount rate, are close to triple Zhuji market prices.

Yes, freshwater pearls are very inexpensive. But when dealing in higher-end freshwaters the cost can be substantial, making the stringing and clasp a small afterthought.

It is easier to shop for freshwater in Hong Kong. There is no doubt about that. The sellers there understand the market needs much better, and are much more willing to customize production for a customer. But the options and the prices are substantially better in Mainland China. I don't think anyone who has spent ample time in both could disagree.

Pearlescence,
Strand length is a problem. If you shop at the markets in China the strands will always be short, under-sized, and the quality of the pearls will go down as the string progresses to the ends. The only way to really get away from this is dealing with materials and buying by weight, not by strand.

[pbazar]

Originally Posted by jshepherd

Peter,
When was the last time you were in Zhuji to buy freshwater pearls? Have you ever gone in person and priced out different processors there?

Jeremy its been at least 3 years. You make me work too hard. I will go back and I will let you know my thoughts unless you want to come with me.

[Mikeyy]

Jeremy if you are going to be offering a class in Chinese pearl buying I would like to sign up. Please send me the application at your earliest convenience. I am already packed. I can always use more education.

[Amrita]

This has been a most informative thread. I totally agree about the decreasing pearl sizes (actual vs. stated) as well as the shrinking strand lengths, as I have witnessed this firsthand as well. But I have found that the more knowledgeable you are while talking to your suppliers, the more likely you are to be able to get the right size strand length and the right pearl sizes. Just adding my two cents worth......

Below is a link to a video that my husband took when I was on my last trip to Zhuji and was talking about pearl size ( sorry, the video is in Chinese - but I am definitely talking about pearl size and asking that I get the size as stated, and not smaller......). I was not going to put this on, but seeing all this hot debate about the same issue, had second thoughts and put it on just because it seemed so relevant to the topic.

Thanks for letting me share!

http://www.harmonypearls.com/page/negotiating-in-china

[pearlescence]

I may not be able to understand what you are saying but I can follow the conversation - did you buy them? Even though they were small and short length?
wow - all the pearls stacked up all around as in the tracking shot - phew.

[Raisondetre]

Cool, Amrita! Is that you? I liked your polite but no nonsense attitude. So what if it's market standard? It's Chinese market standard ... not international. This just frustrates buyers across the board!

[jerin]

Amrita,

very nice video and it clearly came through that the selling lady tried to hold her own while you equally clear let her know about size length and pearl size... Thanks.

[Mikeyy]

Yes thanks for the video. But I have to admit after being in those types of negotiations overseas I could feel the jet lag creeping in. And because I don't speak the language who won?

[Amrita]

Originally Posted by pearlescence

I may not be able to understand what you are saying but I can follow the conversation - did you buy them? Even though they were small and short length?
wow - all the pearls stacked up all around as in the tracking shot - phew.

Hi Wendy! No, I did not buy the small and short length strands. I was able to convince these people that I need sizes and lengths exactly as I asked for, and they provided them for me....., some were even slightly bigger!

[Amrita]

Originally Posted by Raisondetre

Cool, Amrita! Is that you? I liked your polite but no nonsense attitude. So what if it's market standard? It's Chinese market standard ... not international. This just frustrates buyers across the board!

Hi Raisondetre! Yes, that's me! Thanks for your comments.....I agree that it is not international market standard, and that is what I have been able to convince a few of the factories about....at least for their supplies to me. But it is a slow process, and will take time for the whole Chinese FW pearl industry to change their ways, especially when innocent buyers not familiar with this trend buy huge amounts of pearls at the "Chinese market standard".

[Amrita]

Originally Posted by jerin

Amrita,

very nice video and it clearly came through that the selling lady tried to hold her own while you equally clear let her know about size length and pearl size... Thanks.

Thanks, Inge! I do try in my own small ways, don't we all?