The wisdom of Marx

Posted October 29, 2010 | By Coleby Nicholson

Should online jewellery websites be considered retailers? Actually, it’s impossible to answer that in a meaningful way and, besides, it’s irrelevant because no one really cares. The real question, and one that has been asked before, is whether online jewellery businesses should be eligible for JAA membership.

Many in the industry believe online businesses are not “legitimate” retailers and should not be allowed to use the credibility and integrity that comes with holding JAA membership.

The issue has come to light again with the recent turmoil surrounding Australian online retailer Diamond Exchange. Some will say, “See? We told you online retailers were parasites feeding off bricks-and-mortar stores with much higher overheads. They hide behind websites with no addresses or phone numbers, and no one knows who they’re dealing with.”

In fairness to Diamond Exchange, it did none of those things. Furthermore, when confronted with the online retailer issue, the JAA surveyed its members and the results showed that the majority of members didn’t care about whether online businesses were members of the JAA or not.

With the Diamond Exchange issue being played out in the courts as we went to press, I wonder whether the JAA needs to review this area. Indeed, the JAA introduced a new constitution on October 1, yet the basis for membership was almost identical to that under the previous constitution – I think it needs a dramatic review.

For a start, the Diamond Exchange turmoil has exposed the fact that the JAA cannot suspend memberships – either someone is a member or they are not. There is certainly a need to have mechanism to suspend a member while a matter is being investigated and/or there is a court case pending. The JAA is reviewing this issue.

While the JAA is reviewing things, it should perhaps review the membership of this magazine. You see I don’t believe Jeweller should be eligible for a full membership in the JAA. Perhaps the magazine is more suited to an associate membership but, under the new constitution, any entity that derives more than 50 per cent of its business from the jewellery industry can apply for full (voting) membership.

A cursory glance might lead someone to believe that there’s nothing wrong with this model; however, my view is that an industry association should consist of industry members, not the people who provide products or services to that industry.

JAA membership should be restricted to two channels – suppliers of product or services to jewellery retailers; and those who retail that product or service to consumers. In my view, anyone else, like Jeweller, whose product or service is not purchased by the consumer through a retailer, would be ineligible for full membership; instead a non-voting, associate membership would apply.

Why? Well, under the current constitution a cleaning business that has jewellery store clients can be a full, voting member provided it derives more that 50 per cent of its income from the jewellery industry. It’s an extreme example, I agree, but it is also a fact. These are side issues to whether online businesses should be eligible for JAA membership because many believe the JAA exists for bricks-and-mortar stores, and that online websites should be banned. The JAA will deal with that in due course.

It’s a difficult debate and too complex to fully explore here. For example: what do you do with bricks-and-mortar stores that have transactional websites? Or what do you do with online retailers who allow customers to visit their offices? It’s not as easy as it seems, eh? It must be debated, along with rules surrounding the suspension of membership and full-membership eligibility.

It’s a little like Groucho Marx’s famous line, “I refuse to join any club that would have me as a member,” but I'm genuinely arguing that this “club”, the JAA, should not have me as a member because I'm not a jewellery supplier or retailer!