Chapter 46: Gold In Exchange For Gold
Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio
By the sixth of November, Chen Jin’s jewelry shop still had not officially opened. It was stuck at the busy stage of preparations. The renovations had been completed. Overall, the shop had a luxurious and imposing atmosphere. There were dazzling displays of gold and jade, and the dimmed lighting of the crystal chandelier emitted a warm amber glow that made it seem as if the temperature of the interior had risen about two degrees.
People would not be able to help but get excited. Riches. Treasures! This was what people would perceive directly through their senses upon entering the shop. Guo Yan had been working there for more than half a month, and by now, her heart had completely settled. There were no remaining worries and doubt from her first days. Now, she only wanted to give it her all and work in this shop whole-heartedly. She was filled with power and vigor, because she realized that there was a future for her if she continued working in Brother Chen’s jewelry store.
First, the working environment was very good. The scale of the shop was very big. The first two stories were renovated into business areas, while half of the floor area on the third story was used as a storage room. The remaining 50 square meters were made into a kitchen, canteen, and lounge. Compared to her previous workplace where she had to brave the weather daily, the facilities here were much better.
Moreover, the store manager was easy-going, approachable, and nice. She took great care of her and was willing to impart some industry experience, showing that the manager had the intention to groom and cultivate her skills. Even the two aunties who had a few years of working experience with the store manager were polite to her. They frequently guided and aided her. The relationship between the superiors and colleagues was very harmonious.
Most importantly, however, the jewelry shop had a bright future. Although the shop was yet unopened, Guo Yan, through her observations, had noticed that its location was excellent. It was in the liveliest section of Jin Ling West Road with a definite stream of potential customers. In addition, Brother Chen had deep pockets. Auntie Chiu had randomly revealed this – the stocks coming into the shop had a total value of nearly $6,000,000, filling the third floor storage room almost to the brim.
The big promotion activity that they were preparing for would be a steal for customers! There were plenty of funds invested into it. If the jewelry shop started off with a bang and developed successfully, the boss definitely would definitely reward the pioneer batch of staff. She just had to perform actively, work diligently and make her fair share of contributions.
Naturally, the store manager, Chiu Wan-Ting took note of her performance. Whenever she called Chen Jin, she would praise her profusely and continuously.
Chen Jin nodded. “After the official opening of the shop, we can turn Guo Yan and the rest into confirmed staff with higher salaries. If the first month of the shop is good, we can give the sales staff some commissions.”
Chiu Wan-Ting said, “It’s better to wait until after a full month of operations, when we’ve calculated the shop’s profits, before considering to raise their salaries. It’s not too clear yet and we don’t want to incur additional costs.”
“Hmm, Auntie Chiu, you’re right.”
By now, Chen Jin had less than $3,000,000 remaining funds. Before the jewelry shop gave him any financial benefits, he could no longer be a spendthrift, and he had to control his expenses.
With regards to the stock, Chiu Wan-Ting had expressed that what they had prepared might not be sufficient. She said, “For a large jewelry shop with about 20 kilograms of gold jewelry in the display counters, the total cost would be at least $5,000,000 and above. But, we’ve only prepared 15 kilograms, and purchased more silver jewelry. The total cost of platinum, diamonds, and other gemstones that we procured are less than $500,000. We’ve spent all our money to barely stock up the counter displays on the first and second stories. However, we’ve nothing left in the storage room to replenish our stocks. If we have a large inflow of customers on our opening day, the sales amount could be above expectations. It’s possible that we might face the awkwardness of a shortage of stock.” She suggested, “Boss, I propose that we reduce the area of business operations and only operate on the first story. The jewelry on the second story can be used as ready stock while the counters on the first story can be placed closer together. This should allow us to face the situation if business sales flourish.”
“No!” On the contrary, Chen Jin shook his head, “If we want to open for business, we have to do it big. We’ll start operations on the first and second stories at the same time. Purchase another $5,000,000 worth of stocks.”
Chiu Wan-Ting was shocked. She asked, “Boss, you still have that much funds?”
“No, I have a batch of gold that was given to me by a friend. Its valued at $5,000,000 and above. Can I put this gold into the shop directly for sale?”
“What’s the primary form of that gold? Gold bars and bullions or gold jewelry?”
“Mainly gold bullions.”
“Is there a production certificate?” The certificate would clearly state the location of manufacture and the manufacturer.
“Um… I don’t think there is.”
“Is there a certificate of purchase?” This certificate would state the origins of the gold and the purchasing body.
Chen Jin’s voice became smaller. “No.”
“How about an inspection certificate? Do you have this?” The inspection certificate would indicate the specific components of the gold and the percentage of gold.
By now, Chen Jin’s voice was tiny like a mosquito. “This…. I think I don’t have that either.” He suddenly realized that he was too simple-minded.
“Oh… I understand now,” Chiu Wan-Ting said with what seemed to be years of experience. “The gold that your friend gave you must be “third void gold.”
“Um, yes. Can I sell this type of gold in the shop?” Chen Jin refused to give up. He had more than a ton of this gold!
“Yes.” Unexpectedly, Chiu Wan-Ting answered in the affirmative. “You can sell it in the shop as long as there are no problems with the gold. But as a “third void gold” without any certifications, the customers will have their suspicions. If there are problems with the gold and customers report a complaint with the Consumers’ Association, it would cause big issues for us. Moreover, because our shop is so big, the Department of Industry and Commerce would conduct random inspections a few times annually. If they discover that we are selling “third void gold” or that the gold is adulterated, we will be fined and face corrective actions…. Boss, I don’t recommend that we sell the “third void gold”.”
Actually, there were many unbranded gold shops in the small cities and towns which sold “third void gold” in the majority. Not to go too deep into their extent of illegality, but there were severely adulterated items on sale and imitations were freely sold. Even so, they survived very well because the law didn’t crack down on them.
However, in such a big metropolitan city like Shang Hai, law enforcement would certainly be strict. In theory, the law did not allow the sale of “third void gold,” even if you were selling 100% pure gold.
“Then what should I do?” In an instant, Chen Jin had wilted like a vegetable left out for too long in the freezing cold. Was the gold only good to be destroyed?
“Don’t worry, Boss. The gold from your friend can be used to exchange for gold.”
“Gold in exchange for gold?” Chen Jin’s head was getting foggy.
Chiu Wan-Ting started to explain in a captivating manner, “You take your gold to legal jewelry manufacturers and exchange it for gold jewelry that has proper certifications. Indeed, if we sell “third void gold” at the consumer purchasing stage, they would be the ones bearing the risk of buying fakes. In order to protect the consumers’ benefits, the government regulatory body will enhance their controls. This is to prevent fake goods from flooding unchecked into the market.”
But, because the jewelry manufacturers belonged to the production stage and do not cater directly to the consumers, the relevant regulatory bodies are more lax about them. As long as there were no issues with the end products, the government departments would not interfere much with the specific manufacture processes.
It was similar to the analogy of the spicy beancurd strips. Everyone knew that they were delicious. But did anyone ever took a closer look at its manufacture process? Which customers would go into the kitchen for an inspection with regards to the delicacies provided at a restaurant?
By the same logic, the jewelry manufacturer supplied the jewelry shops with goods that had the proper certifications. But the manufacturer also needed gold, silver, and other raw materials for production. The origins of the raw materials were complicated. There were legal and illegal mining companies, as well as gold that was recovered from the market. A large proportion of raw materials were made up of market-recovered gold.
“Many goldsmiths and jewelry shops provide a gold return service. A majority of the gold recovered from the public had their certifications lost and thus become “third void gold.” The goldsmiths and the jewelry shops would sell the recovered gold to the jewelry manufacturers, and this forms a cycle of sale, return/recover, and re-production. So, even if the gold you got from your friend is “third void gold,” you can sell it for money or exchange it for gold jewelry at the manufacturer’s. As long as it is real gold, it will be a piece of cake. Of course, the price for recovered gold without its certifications would be slightly lower. There’ll be a “production wastage fee” for exchange of gold jewelry but there’s not much difference usually; only around five percent.”
As an expert professional in the industry, Chiu Wan-Ting was closely acquainted with many gold-to-gold exchange channels.
Chen Jin’s eyes gleamed brightly. Found it! There was a way to deal with the gold! He would take his “third void gold” of unclear origins to the jewelry manufacturers in exchange for gold jewelry that could be sold in his shop for a higher value, and which were legal and certified. In this way, his jewelry shop would not face any issues and could open for business in a public and grand manner to welcome a mass of consumers to purchase in their shop. He could even offer a greater discount on the price of the jewelry. As the business was based on selling huge quantities, Chen Jin could still earn a lot of money even if the prices were lowered to a more competitive level.
“Let’s go! Auntie Chiu, take me with you to the jewelry manufacturers that you know well and find a few trustworthy familiar people. I want to exchange gold for gold!”
Hence, in the following three days, under Chiu Wan-Ting’s direction, they went to over 10 jewelry manufacturers. Chen Jin took out 100 kilograms of gold and exchanged it for 90 kilograms of gold jewelry. The shortage of ready stock in the jewelry shop had been resolved!