Despite the Pandemic, There is a Gold Rush in the US Nepali Community

Even after three years of the COVID-19 epidemic, many small businesses are still struggling to return to their previous state. Businesses run by the Nepali community in New York have not been immune to this. However, these businesses are adopting new measures to recover their previous economic standing.

The COVID-19 epidemic has changed people’s lifestyles. Nonetheless, after almost three years of ups and downs, many businesses are managing to recover financially. Surya Maharjan, director of Queens Diamond and Jewelry in Jackson Heights, Queens, New York, said the family business run by her and her husband Samir has managed to recover financially.

In March 2020, New York became the epicenter of the COVID-19 epidemic, forcing most non-essential businesses to close, including Queens Diamond on 74th Street in Jackson Heights. Surya remembers, “Throughout 2020, we could not operate the business regularly. Even after closing for three months and reopening, we only opened with reduced hours. We also limited customers, resulting in a significant financial loss. But after the arrival of the vaccine, the business started operating full-time, adhering to health and safety standards. However, the business had not returned to its previous scale.”

Queens Diamond on 74th Street in Jackson Heights. Photo: Kishor Panthi

Creative Approaches to Overcoming Challenges

The Maharjans accelerated the same-day jewelry delivery system within New York City after the COVID-19 epidemic. If there is a ready-made piece of jewelry, it will be safely delivered on the same day that the order is received. As a result, customers within New York City started requesting home delivery of jewelry. Samir says, “It had a positive impact on the business. This measure has been effective, as insurance covers any theft or loss during delivery.”

Similarly, Queens Diamond launched an e-commerce website after the COVID-19 epidemic, making it unnecessary for customers to visit the store to order a piece of jewelry. The Maharjan couple has observed that orders coming through the official website of Queens Diamond have gradually increased, as customers have become accustomed to shopping online. Samir says, “After the epidemic, we redesigned the website. Customers outside of New York City find it easy to order small jewelry online. Customers can order with confidence online, as there is an insurance arrangement for the delivery until they sign for it.”

Samir has extensive experience using social media, which has had a positive effect. He said that measures have been taken, from creating digital flyers and spreading the word through social media, to establishing a Facebook shop. Although there are not many orders coming from the Facebook shop, the number of people directly contacting the shop after looking at the jewelry is significant. Samir has experience conducting live sales on social media for a few hours, and orders come in even during the live sales.

For customers who want to have a good look at the jewelry but cannot be physically present, orders are also taken through live video calls. Samir’s experience is that when the jewelry is shown to customers through a video call or Facetime, it becomes easier for the customer to decide which jewelry to buy. He said that customer attraction is increasing as they can return the jewelry within a week if they do not like it.

Gold Prices – 10 Year Historical Chart Source:Macrotrends

After the epidemic, the purchasing power of customers decreased, while the price of gold increased, making customers hesitate to buy expensive jewelry outright. In 2019, the price of gold was $1,285 per ounce, and in August 2020, it exceeded $2,000. In March 2022, the price of gold reached $2,000 per ounce, and on January 24, 2023, it reached $1,937. To cater to their customers, Queens Diamond has started a layaway system where customers can pay gradually. Under this system, customers pay 80 percent of the price of the jewelry, and can take merchandise with them. The remaining 20 percent can be paid later. No credit check is required.

Samir said, “We have adopted this system based on the relationship and mutual trust with the community.”

In addition, there is also a provision for applying for a credit card issued in collaboration with Synchrony Bank, allowing some customers to buy jewelry up to $15,000. However, a good credit score is required for credit approval from the bank, states Samir.

After the pandemic, the Maharjans started selling jewelry through, in addition to their official website. “We had already thought of starting it, but after the epidemic, it became a favorable time as customers started to get used to shopping online,” Samir said.

Since the festivals of the Nepali community are connected with jewelry and there is a tradition of wearing certain jewelry and giving gifts during such festivals, working these events generated sales and had a positive effect on the business. Surya commented, “Since jewelry is given as a gift to sisters during Tihar, we bring an offer of the same type of jewelry. As special types of jewelry are worn on Teej, we bring offers of those types of jewelry. For Valentine’s Day, we bring an offer of jewelry that reflects love.”

Due to these measures, Surya Maharjan has seen that the business has started to is returning to its previous state. “After the corona epidemic, luxury goods, including jewelry, have become less of a priority for customers,” she said. “By adopting these measures, we have almost returned to the situation before the epidemic.”

Business Expansion

Before the pandemic, Queens Diamond already had branches in Maryland and California. Since the pandemic, no new branches have been opened, but in 2021, the business in Jackson Heights expanded to occupy more square footage, from a 400 square feet space to 1600 square feet. “When the front of the store became too crowded,” Samir observed, “we took more space at the back to reduce crowding and make it easier for customers who order a lot of goods. Since it takes a long time for a single customer to order goods for events such as weddings, we made arrangements so that they could order comfortably.”

Director Surya Maharjan is seen at Queen’s Diamond, which reopened in 2020 after being closed for three months at the beginning of the Coronavirus epidemic.Photo: Kishor Panthi

He also mentioned that the company did not take any loans from the government for business expansion. Although the EIDL grant and Paycheck Protection Program funds helped pay the salaries of employees, they did not take any loans or grants for business expansion. Samir added, “We did not take that money with the intention that it should go to small businesses that need it more and are more affected than us.”

Despite the challenging situation Samir informed that no employees were laid off during the pandemic. In fact, three new employees were added. Even when the store was open for fewer hours and employees worked fewer hours, they received full hourly wages.

After the pandemic, Queens Diamond also focused on wholesale in addition to retail. There has been a significant trend of Nepali jewelry stores opening in other states of the USA, and Samir mentioned that they are supplying wholesale jewelry to those stores. They are currently working with ten such jewelry stores.

Queens Diamond has also expanded its factory in Nepal. Samir expects that with this expansion in Nepal, where labor costs are lower, will reduce jewelry production costs and prepare the business to face possible inflation. However, he informed that they still produce 30% of their jewelry in the USA.

The Maharjan couple has made various plans to deal with possible inflation. They plan to carefully manage their inventory and minimize stock since customers are likely to purchase fewer luxury goods during inflation. Their plan is to reduce unnecessary expenses and increase sales.

More People Selling Pre-Pandemic Jewelry for Profit

Since the price of gold went up after the epidemic, there has been a significant increase in the number of customers who sell their gold or jewelry. The number of people who bought jewelry before the epidemic had grown since they can make a significant profit by selling it now. Samir says that if there is a receipt for jewelry bought in the USA, they will directly buy such jewelry or gold.

“If there is gold or jewelry bought outside the USA, we have done lab tests and bought it. It takes one day to do the lab test,” says Samir, adding, “but there is no need to do a lab test if the jewelry or gold was previously bought from us or bought from an official store in the USA. Although there is not much profit when buying gold from customers, we do it for the relationship with customers.”

Samir said that even if customers come to exchange the diamond jewelry purchased from him after 10 years, he will exchange it at the same price as the purchase price without any additional charges. “But gold jewelry can only be exchanged or purchased at the current price,” he said.

Samir advises customers to get insurance while buying jewelry, since it will cover the purchased jewelry if it is stolen, lost or robbed.

Buying Gold in the US as Gifts for Nepal

Currently, the price of gold in the US is around 58 dollars per gram, and in Nepal, it is around 66 dollars. The price of 50 grams of gold in the USA is about 2900 dollars, and in Nepal, it is 3300 dollars. If a gold bar is taken to Nepal, there is not much profit due to the customs amount to be paid. However, if jewelry made at a low cost is taken to Nepal, the profit can be up to 400 dollars per 50 grams. But if someone takes more than that, they have to pay customs, so there is no benefit.

As gold is cheaper in the USA than in Nepal, many people buy it here and take it to Nepal as gifts. In Nepal, there is a legal provision that only up to 50 grams of gold jewelry can be taken without passing through customs. However, for gold jewelry up to 100 grams, a customs duty of 10,500 rupees per 10 grams, about 80 US dollars, must be paid. For more than 100 grams, they can pay 12,000 rupees per 10 grams, which is about 90 dollars. However, if someone carries more than 250 grams of gold jewelry, customs has the authority to confiscate everything. Similarly, raw gold can be transported up to a maximum of 100 grams by paying a customs duty.

In the case of gold bars, customs imposes a duty is 950 rupees per gram, about 7 dollars, for the first 50 grams. For an additional 50 grams, the customs duty is 1,000 rupees per gram, almost 8 dollars. If someone carries more in gold bars, customs has the authority to confiscate all excess gold.

Nirmala Baskota, a resident of Queens, New York, had to pay nearly 400 dollars in customs duty at the Kathmandu airport when she took 60 grams of raw gold to Nepal. She says, “If you take gold to Nepal, you must keep the receipt of paying the customs at the airport. If you do not pay the amount and do not get the receipt, you may have to face more trouble because the police can arrest you even after you leave.”

Samir Maharjan has experienced that although gold is cheaper in the USA than in Nepal, the cost of making jewelry is high in the USA. In Nepal, although gold is expensive, the cost of making jewelry is cheaper, so it affects little the overall price. However, according to Samir’s experience, a significant number of Nepali people buy such jewelry as gifts because it is cheaper to carry jewelry weighing less than 50 grams. Samir also informed that Classic Diamond Jewelers in Nepal, also a Maharjan family business, provides jewelry directly to those who want to give gifts to their relatives in Nepal, after paying for the jewels in the USA. However, the price will be set according to the market value in Nepal.

Tilari is a highly popular necklace made of gold, adorned with beads of multiple colors, particularly red, green, or yellow. It is considered an essential ornament for Nepali wedding ceremonies. Photo courtesy: Queens Diamond & Jewelry

Giving Back to the Community

Queens Diamond returns a portion of its profits to the community through various charitable activities. The Maharjan family has been active in sponsoring various community programs and providing donations to community members in need.

Samir Maharjan also does social work through the Ashtamaya Foundation, established in honor of his mother. The foundation focuses on empowering women in the USA and Nepal. Even during the COVID-19 pandemic, the Maharjan family helped students in need and supported campaigns started by others.

In addition, both Samir Maharjan and Surya Maharjan have been active in various social organizations within the Nepali community in the USA. Surya Maharjan, who served as treasurer of Newa Guthi, the organization of Newar community in the USA, until 2020, and is now the vice president of the World Newa Organization USA Chapter. Samir Maharjan has also held leadership positions in various Nepali community organizations in the USA. As a result, their relationship with the community has grown stronger.

Surya says, “In business, having a good relationship with the community is important because it builds trust. Despite tough competition in the business, we have been able to maintain a comfortable position due to our longstanding relationship and trust with the community.”

The Nepali version of this report is available here.

(This story was produced as part of the Small Business Reporting Fellowship, organized by the Center for Community Media and funded by the NYC Mayor’s Office of Media and Entertainment.)