Josh Opperman put a smart new business twist on the old adage: It’s not what they do to you that counts, it’s what you do with what they do to you.
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In 2006, he used his savings as a market researcher to buy his fiancée an engagement ring that cost him more than $10,000. Three months later, “after a tough day at work, I came home to find that my fiancée and all her belongings were gone,” he said.
But she did leave the engagement ring on a coffee table.
“I was devastated,” recalled Opperman, now 32. “The love of my life - or so I thought - was gone forever, and I was just crushed.”
He decided to sell the ring back to the jeweler, “to move on,” and recoup some of his losses.
“The offer was staggeringly low,” he said. “It turns out jewelers mark up rings two or three times over their wholesale cost. That $10,000 ring probably cost the jeweler $3,500. And that’s just about what I was offered. “
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That led to Josh Opperman’s “a-ha” moment.
In January 2007, he and his sister Mara launched IDoNowIDont.com, a Web site where jilted lovers could sell their rings – and where sellers would get paid more than they’d make by returning the ring to the jeweler and where buyers would be charged less than they’d pay for a new ring.
Not only that, but each ring put up for sale would be accompanied by the spurned lover’s story.
Mara, who works as the company’s vice president of marketing and public relations, used the site’s quirky beginnings to quickly attract the attention of major media. Opperman’s can’t-miss lament was featured on Rachel Ray, Good Morning America and CBS-TV.
Within months after launch, Josh and Mara were able to quit their day jobs to work full-time on the site.
By summer 2008, their business flattened. In October, they brought in e-commerce veteran David Becker as chief executive officer. He’d been involved with four Internet start-ups, two of which had gone public.
“We took a liking to him,” said Mara Opperman, 29. “We thought he could take us to the next level.”
Coinciding with Becker’s arrival, the U.S. economy tanked. But traffic didn’t.
In fact, in October 2008 alone, traffic nearly tripled compared to the previous month, and sales rose by 68 percent.
“Really, we attribute it to what’s going on in the economy, because we feel that buyers are looking for great deals,” Mara Opperman said. “At the same time, sellers are looking to make money, so we have a nice partnership between the buyers and sellers.”
She also noticed a change in the stories that sellers were posting to explain why they were trying to sell their rings.
“We started seeing more stories about people needing the money to finance things,” Mara Opperman said.
Like the person selling a diamond-and-ruby ring set in white gold, with an opening bid of $1,200: “This was not a wedding ring, I bought it in hopes of passing it on to my stepdaughter on some special day in her future. … Now we are having a baby of our own and have to make a few choices. Selling this ring will help furnish a much needed baby's room.”
Here’s how the site works:
Sellers register on the site, fill out a form offering information on the item for sale, with photos. Set an opening bid. In some cases, there’s a “buy it now” feature for those who don’t want to wait out an auction. If a buyer wins an auction, he sends the purchase price through a secure PayPal page. The payment is held in escrow by IDoNowIDon’t until a gemologist authenticates the diamond.
Once authenticated, IDNID will send the item to the buyer and release the cash held in escrow to the seller. Typically buyer and sellers communicate via email about any reduction in price.
Posting an item is free. Buyers pay only the purchase price plus shipping. Once a sale is finalized, IDNID charges sellers 12% of the sale price plus the PayPal credit-card fee.
Typically sellers receive 40-60% of the retail price for their item, Becker said, far better than what a consignment, pawnshop or retailer will pay.
“We focus on diamonds,” he said. “The unit average price is quite high, about $2,100 to $2,300.People are not going to buy them as often, but when they do, they require a high level of authenticity. It's important to give people total confidence on both sides of the equation. Having us between buyer and seller means everyone is happy. Both get good deals.”
But it’s Josh Opperman’s personal story that propelled the business, and the stories continue to fuel it.
“We put Josh's story front and center on the site," Becker said. "It's a very, very personal story that fits beautifully with the brand. Customers also respond to the other stories on the site, stories about divorce and moving on. It's an interesting way to attract an audience.”
A white gold diamond ring up for auction is accompanied by this tale:
“I dated my high school sweetheart for four and a half years before I popped the question and put the ring of her dreams on her finger. After four months of engagement, she broke it off and was in another man’s arms within two weeks. I just want to get this ring off my hands. I need not say more.”
The bidding starts at $6500 for a five-carat Asscher center stone ring whose photo is topped with the headline “NFL Divorce.”
“I married an NFL player, and let's just say it didn't work out” the seller writes. “It's a beautiful ring, and I got compliments on it every day.”
Bidding starts at $4,000 for “A Ring that Literally Went to War and Back”
“We were both dedicated military officers, with more time spent apart than together, especially after 911,” the seller writes. “We both served in Iraq, and all over the world, assisting with the war effort … Our marriage, while brief, was a blessing to us both and was the stepping stone in our lives to take us to our TRUE loves. This diamond has great intentions and is ready to serve another relationship. It will help lift its owner to their highest potential, as it did for us.”
Bidding starts at $4,000 for a 1.2 carat ring with this story: “I created the perfect scenario for a proposal that we would never forget. However after 3 months of being engaged, our reasons for separating in the past were still among us. After a few more months of preparing for a wedding and buying a house the engagement was broken off. Ever since then, we have not seen nor talked to each other in almost two years. The ring has only been a reminder of what my life was going to be and I cannot bear to hold onto it anymore. It wasn't meant to be.”
“The stories are important,” Mara Opperman said. “The items with stories sell faster. Every diamond is unique, but diamonds also can become a commodity. If you put a story alongside it, it captures peoples' attention. It personalizes an otherwise cold listing.”
A potential buyer can contact the seller on the site, for more information on the ring or more about its story. “Buyers and sellers sometimes maintain a relationship well beyond the sale,” Mara Opperman said. “We've heard of sellers attending a buyer's wedding.”
This year, the IDNID site engineered diamond deals with a retail value of $2.6 million, Becker said. The transaction value was about $900,000, he said, with plenty of future upside.
"CashforGold.com projects $180 million in revenue for 2009," Becker said. "And every year there are 1.3 million divorces. The value of those wedding rings is about $10.3 billion. Most people stick it in a drawer for years. It's a wasting asset. The market is woefully inefficient. We wouldn't have to mine another diamond in the world for 10 years if we could unlock the value of those that are sitting in peoples' jewelry boxes at home."
In case you’re wondering about Josh Opperman’s personal file, he got married in August “to the real love of my life,” he said.