Talleres de los Ballesteros welcomes TWU business students.

Talleres de los Ballesteros store in Mexico City.

Unique silver products, sculpture and jewelry are displayed in the Mexico City showroom.

MBA study tour group in front of
Talleres de los Ballesteros

Talleres de los Ballesteros

Talleres de los Ballesteros specializes in the design and manufacture of jewelry and silver work using traditional artisan processes. The company is known around the world for its exceptional quality and exclusive designs. One can purchase something as simple as a ring, bracelet or necklace…to something as intricate as a tall sailing ship or as elegant as a custom tea service. In Mexico City, we toured three stories of silver showrooms with amazing art, sculptures and jewelry, some with beautiful stones. One room was just for original pieces that were custom-designed for clients from around the world. It was an awesome experience.

The company was founded in 1937 by Don Jalil Majul Ballesteros, a Lebanese immigrant who traded silver near the town of Taxco, the historic silver mining center of Mexico. Today his grandson, Mario Flores Majul, manages the company.

Under Mr. Majul’s leadership, the company has grown from a small family firm to a global enterprise. When Mr. Majul took over the company in 1997, Ballesteros was making 60,000 pieces of jewelry and art per year. In 2003, they expect to make over 300,000 pieces. Overall sales growth has been 25% - 30% for the past five years. Among Mexican companies exporting silver products, Mario Flores Majul has increased Talleres de los Ballesteros’ market share from 4% last year to 7% this year.

To place this company in a national economic context: Mexico exports roughly $50 million per year of silver jewelry, with approximately 1,200 companies in the export business.

Mr. Majul attributes part of the company’s success in growing sales to its ability to establish a “trusted supplier” relationship with its customers. He summarizes the goal of Ballesteros as “providing the best service and quality products to our customers, who are our reason for being.”

Ballesteros has a worldwide sales force with representatives in Sweden, Norway, Finland, Spain, France, Germany and Japan, as well as the United States. Although they are active retailers within Mexico, 80% of Talleres de los Ballesteros’ sales are in the export market. Their export business uses a variety of distribution channels:

Retail Trade Shows (such as Atlanta, Los Angeles and Dallas World Trade Center) in both Europe and the United States allow Ballesteros to reach small retailers. Although these small stores’ buyers average orders of only around $500 each, the company usually has orders from 10,000 – 20,000 stores per trade show.

International Distribution Contracts are a vital link to large retailers. Talleres de los Ballesteros has several distribution agreements with major U.S. companies, including QVC, Lillian Vernon, Federated Stores, and the Metropolitan Museum of Art.

With a fifteen-year relationship, Lillian Vernon’s catalog and online sales company is Ballesteros’ oldest U.S. customer. What takes Ballesteros three months to produce, the Lillian Vernon Corporation can sell in just three days!

Sales to QVC are handled by a New York-based American distribution partner firm that assumes responsibility for damaged or returned goods. This solution guarantees responsive customer service to QVC and eliminates the need to return goods via Mexico’s infamously slow, complicated (and often risky) customs processes.

The Metropolitan Museum of Art is one of Ballesteros’ export accounts that designs its own jewelry lines and contracts the Mexican company to manufacture special products. Talleres de los Ballesteros receives the design, creates prototypes, and then (upon approval) produces the quantities ordered. The minimum order for a special design is 100 pieces. Another account which designs exclusive products for Talleres de los Ballesteros to manufacture is a chain of retail stores in Japan, similar to The Gap, that sells custom jewelry in addition to clothing, etc.

Effects of NAFTA

Because Talleres de los Ballesteros’ products are considered an arts and crafts industry, GATT provisions already exempted them from duties and taxation when exporting to the U.S. NAFTA has, nevertheless, benefited Talleres de los Ballesteros in two ways. 1) NAFTA has streamlined export administration and sales processes because less paperwork and documentation are now required. 2) Talleres de los Ballesteros benefits from NAFTA as an importer of goods from the United States. American-made items such as earring backs, brooch pins, etc, which they purchase to use in manufacturing their products were previously subject to a 50% tax. Under NAFTA, these imports are now taxed at only 10%.

Global Business Issues

One challenge Mr. Majul has encountered is that potential foreign trade partners sometimes perceive Mexican companies as unreliable. Mr. Majul is very much attuned to the modern way of doing business and stresses the need for “a highly professional business ethic.” This includes cultivating a positive business image, fulfilling expected turn times, and doing business like U.S. and European companies in terms of responsiveness and accountability. Ballesteros’ competition is primarily from Italy, another country with a heritage of artistic metalwork and jewelry making, and Asia, where jewelry is often mass-produced.

Technology

Technology is also changing Talleres de los Ballesteros. Eighty percent of their orders are now received via e-mail. Ballesteros is also applying computer technology for inventory control, production scheduling (business is seasonal), and their future goal of just-in-time production.

Talleres de los Ballesteros has grown from a humble adobe building on a dusty street in Taxco to an impressive company headquartered in an elegant showroom in one of Mexico City’s finest commercial areas. The company has 12 retail stores, merchandising concessions in 80 duty-free airport shops, 50 administrative personnel, and over 500 craftspeople. One can visit their U.S. stores in San Francisco or San Antonio or order online from their San Antonio store at www.ballesteros.com.