Starting a new jewelry business is a dream for many people. It can be a very profitable and rewarding business to be in, but it does take some work and expense to get started. This article will outline the steps that you need to take to start your own jewelry company. We will also provide some helpful tips on how to make your business successful. So if you have always dreamed of starting your jewelry company, read on!
How Much Does it Cost to Start a Jewelry Business?
The cost of launching your own store can vary depending on the type of business it is. For instance, you may be able to get started for as little as $100 if you are doing something like selling handmade jewelry or costume jewelry on an eCommerce platform.
To give you a specific example, grinding and polishing white quartz crystals is a great way to start a cheap jewelry company on the side. They are plentiful, and you can literally find them in your backyard— so that makes them even cheaper since you are collecting them yourself instead of purchasing them.
Grinding and polishing tools that ready crystals like these for jewelry settings are relatively inexpensive, and some processes even use common household chemicals and sandpaper. After they are readied, you can use your jewelry-making skills to design pieces that are in high demand.
However, if you want to start a more traditional jewelry company, such as selling sterling silver or gold jewelry at a physical location, the costs will be higher. For instance, you can start a small brick & mortar startup for selling your jewelry for as little as $20,000. However, that figure can go up to around $100,000 depending on the materials and equipment you’ll be using and where your startup jewelry business is located.
As a general idea, typical costs for a jewelry store startup might include:
- Rent: $1000 – $2000 ($0 if you start your business out of your home)
- Purchase of a storefront: $10,000 – $100,000
- Basic tools: $300
- Jewelry manufacturing equipment: $2000 – $5000 (you can also lease)
- Purchase of raw materials and packaging supplies: $1,500 – $2,000
- Employee salaries: Varies depending on position and experience. Expect to pay an average of about $4,000 on average
- Utilities: $300
- Overhead and raw materials: $500 for basic raw materials to make low-end jewelry; $10,000+ for precious metals and gemstones.
- Advertising and promotions: $1,000
- Miscellaneous expenses (equipment, insurance, permits, etc.): $2,500
Is a Jewelry Business Profitable?
Yes, a store where you sell your jewelry can be profitable. In fact, the average gross margin for jewelers in the global jewelry market is about 42.6%. That means for every $100 worth of product sold, the jeweler makes approximately $42.60 in profit. Meanwhile, there are several factors that can determine a jeweler’s profitability, including the type of jewelry being sold, the price point and overhead costs.
Perhaps the better questions should be: what should I do to make my jewelry company more profitable? Or, What can differentiate my jewelry company from my competitors? When you answer these questions, you should be able to find a market and sell your pieces with ease.
Starting a Jewelry Business in 16 Simple Steps
Now that you have an idea of what it costs to start your store, and some information on whether or not it is profitable, let’s outline the steps you need to take to get your business up and running to make it in the jewelry industry.
1. Look at Your Competition
Before venturing out full force, it’s essential to take a good look at your competition. What type of jewelry are they selling? At what price point? How do their products differ from yours? What can you do differently to make your business more competitive and successful?
It’s also essential to research your target market and see if there is a need for the type of jewelry you want to sell. Are people looking for something new and different, or are they more likely to stick with classic designs?
Here’s a good low-cost strategy to use for competitor analysis:
- Identify who your competitors are by doing some market research. For instance, do a quick Google search and review their websites.
- Gather information about your main competition by:
- Checking out their social media posts to see what kind of content they are sharing.
- Signing up for their email list to get notified of new arrivals, sales etc.
- Subscribing to their YouTube channel to watch product reviews and how-to videos.
- Browsing through their online catalogs or looking for their products in local stores.
- Analyze your competitor’s strengths and weaknesses.
- Talk to your competitors directly. Ask them:
- What their business is like.
- What type of customers they are targeting.
- What strategies they are using to succeed.
- What are they doing well that you could emulate in your own business?
- Are there any areas where they are struggling that you can capitalize on?
- Identify your competitive advantage by figuring out what makes your jewelry unique and different from everyone else’s.
By doing your research upfront, you’ll have a much better idea of what type of products to create and how to market pieces that appeal to your client base. Once you have a good understanding of what other jewelry designers are doing, you can begin to differentiate your business by creating unique designs, targeting a different market or offering lower prices.
2. Find a Niche
It’s important to find a niche market when starting any type of business. This is a target audience who is interested in the type of jewelry you sell and are willing to pay more for unique pieces that can’t be found at local stores. Your target market will also be more likely to recommend your business to their friends and family.
To find a niche market, you’ll need to do some additional research. Who is buying the type of jewelry you want to sell? What are their interests? Where do they live? What are their spending habits?
Once you have a good idea of who your target market is, you can begin to create content and design pieces that appeal specifically to them. You can also start targeting specific social media channels and online platforms that they are likely to use.
When selecting a niche, it’s important to consider your skills, interests and experience. For example, if you’re a metalsmith, you could specialize in creating jewelry from precious metals and gemstones. Or, if you have a background in fashion, you could create unique pieces that are inspired by current trends.
Other jewelry niches include:
- Fine jewelry products, including wedding rings and engagement rings.
- Boho chic jewelry.
- Rustic/vintage-inspired jewelry.
- Nature-inspired jewelry.
- Glamorous evening wear and fashion jewelry.
- Eco-friendly/upcycled jewelry.
- Fashion accessories (bracelets, necklaces, earrings, etc.).
3. Decide Between Offline and Online
Once you’ve identified your niche, you’ll need to decide how you want to sell your jewelry. Do you want to set up a physical store or sell online? The steps on this list may vary a little, depending on whether the business is online or offline.
In addition, there are pros and cons to both options. Selling offline allows customers to see and touch the jewelry in person, but it can be expensive to rent retail space. Plus, you’ll need to invest in inventory. Selling online is cheaper; you don’t have to carry any inventory, but, unfortunately, customers can’t see or touch the jewelry before they buy it.
It’s important to think about your target market when making this decision. If your niche is people who live near you, selling offline might be a better option. If your niche is people who live far away, an online jewelry business might be a better option.
There’s also the opportunity to hybridize these two options if you want to market your company as a brick & mortar store that also has an online presence. Jeweler James Allen is an example of a retailer that largely markets itself as a jewelry business online but also has a physical location to sell their jewelry in Washington D.C.
You also need to decide how you want to ship the jewelry. Do you want to offer free shipping? How will you handle returns? These are all important factors to consider when deciding between offline and online sales.
4. Choose a Business Name
When starting a business, it’s important to choose a name that is unique and memorable. After all, it’s one of the first things your clients will see. The name should reflect the type of jewelry you sell and who your target market is.
Some tips for choosing the name of your business:
- Make sure the domain is available.
- Check to see if the name is trademarked.
- Google the name to see if it’s being used by another business.
- Choose a name that is easy to spell and pronounce.
5. Brand Your Business
Once you’ve selected a niche, it’s important to create a brand that is associated with your jewelry. This includes developing a logo and tagline, as well as creating a website and social media pages that showcase your work and establish your brand identity. Use your brand to create a sense of exclusivity and make sure everything you produce reflects the values and mission of your business. For instance, jewelry brands like Tiffany & Co. and Cartier are known for their high-quality products and exclusive appeal.
Creating a brand can be a lot of work, but it’s worth it in the long run. It will help you stand out from the competition and make your business more recognizable to customers.
6. Create Your Own Jewelry Business Plan
A business plan is a document that outlines your business goals and how you plan to achieve them. Some of the main information to put in yours includes:
- Your target market.
- Product/service offerings.
- Marketing strategy.
- Financial projections.
Creating a plan for your company is essential for setting up any business model, and it’s especially important when you are starting out on your business venture. Not only will it help you stay organized and focused, but it will also help you secure funding from investors or banks.
There are a number of templates and resources available online that can help you create a roadmap to success for your store. The online business plan tutorial at the Small Business Administration (SBA) is a good place to start.
7. Register Your Business
Once you’ve created your business plan, it’s time to register your business with the appropriate government agencies. This includes registering your business name, getting a tax ID number and setting up a bank account. You will also need to select the type of business entity you want to register as (sole proprietorship, partnership, LLC, corporation, etc.)
The process of registering your business can be somewhat challenging, but the SBA has a number of resources and comprehensive guides to help you. It’s important to do your research and consult with an attorney or accountant if you have any questions. Your local SCORE chapter also offers free seminars and workshops that show you how to set up and run your small jewelry company—or any type of company, really.
8. Create a Business Bank Account
A bank account for your company is a separate bank account that you set up specifically for your business transactions. This is where you will deposit all the income you generate and pay your business expenses. It’s important to keep your personal and business finances separate, so it’s recommended to have two different bank accounts. If you don’t, you may be comingling your accounts. That can cause a really tangled web when you are doing your taxes too. Also, it’s good to get a business card to start building credit for your jewelry store.
When setting up your business bank account, be sure to provide the name of your business, tax ID number and contact information. You will also need to provide a voided personal check or bank statement so the bank can set up direct deposit for your business income.
9. Apply for Licenses, Insurance, and Permits
Depending on your location, you may need to apply for various licenses, permits and insurance policies before starting your own jewelry company. The requirements vary from state to state, but here are the main licenses, insurance and permits you typically need for your business:
- Business license.
- Tax ID number.
- Business insurance (general liability insurance and product liability insurance).
- Sales tax permit.
- Zoning approval.
- Health and safety inspection (if selling to the public)
- Workers’ compensation insurance (if hiring employees)
10. Decide Who Will Make Your Jewelry
Many jewelry creators are self-making jewelry and drop shipping them to their clients. If you are a jewelry designer and business owner doing this, you (and your small crew, if you have them) can benefit from jewelry-specific design software like Jewelry CAD Dream or RhinoGold 6. For drop shipping, you can depend on shipping apps like ShipStation.
With growth, you won’t be able to make your jewelry in your home and garage forever. Eventually, you may need to outsource some or all of the production to a third-party manufacturer. This can be a challenging process, as you want to find a manufacturer who is reliable and has good quality control.
There are a number of resources online that can help you find a jewelry manufacturer, such as the Jewelry Manufacturing Association (JMA) and Made-in-America.org. You can also search for “jewelry manufacturers” or “custom jewelry makers” in your area.
When contacting potential manufacturers, be sure to ask a lot of questions about their production process and quality control measures. It’s also important to get references from other businesses who have worked with them. Last but not least learn as much as possible how to make jewelry to sell.
11. Price Your Products
One of the most challenging aspects of starting a jewelry store is pricing your products. You want to price them high enough so you can make a profit, but not so high that people won’t buy them.
There are a few things you can do to help determine how to price your jewelry:
- Do some research on what other similar items are selling for.
- Factor in the cost of materials and labor.
- Consider how much time it took you to make the piece.
- Keep it at the same price or a little over the price of your competitors and offer a discount for buying more than one piece or a loyalty program.
12. Create a Website for Your Own Online Store
A well-designed website is beneficial for an online or an offline store, and you also will need it for your jewelry sales. It helps customers learn about your products and company, as well as makes it easy for them to purchase items.
If you’re not familiar with web design, there are a number of services that can help you create your own website for selling jewelry online. Wix, Squarespace, and Weebly are all popular website builders that have templates specifically for businesses. If you like a little more flexibility in design and functionality without knowing a lot of code, WordPress.org is the website builder for you.
You will also need to set up a payment processor so customers can pay for their items online. PayPal, Stripe, and Square are all popular options. Additionally, don’t forget to hire a professional photographer to take some pictures of your pieces. Beautiful pictures with good product descriptions on jewelry blogs make people want to buy jewelry products. Another option is learning how to sell jewelry on Etsy. This will give a quick entry into selling your items online.
13. Market Your Business
When it comes to marketing your jewelry company, there are a number of strategies you can use. And even if you have an online store, it’s important to market your business offline as well. This can be done offline by:
- Participating in local craft fairs and shows: This is a great way to get your jewelry in front of potential customers and make some sales.
- Setting up a booth at your local shopping mall: This can be a good way to reach more people, but it can also be expensive.
- Contacting local boutiques and stores: You can offer to sell your jewelry in their store or let them borrow some pieces for a fashion show.
- Creating a mailer: You can create a mailer that showcases your products and offers a discount for people who visit your website or online store.
- Using marketing materials: Business cards, brochures, and product tags can help customers learn more about your jewelry and how to purchase it.
Also, there are ways to expand your reach online, including social media, search engine optimization (SEO) and paid advertising. No one says you have to do one or the other—just remember to try out a few and see what works best for you. Before long, your marketing endeavors will start to attract those dream clients you’ll want shopping at your jewelry store.
14. Fulfill Orders and Ship Products
Once orders start coming in, it’s important to be prepared to fulfill them quickly and correctly. This means having a process in place for:
- Receiving orders from customers.
- Picking the right products to send.
- Packaging the products securely.
- Shipping them out as soon as possible.
- Handling returns and having a return policy.
If you’re not able to handle fulfillment yourself, you can outsource this to a third-party company.
15. Get Your Taxes in Order
Running a jewelry establishment means you need to keep track of your income and expenses, and you may also need to file taxes as a self-employed individual. The best way to stay organized is to create a system for tracking your finances throughout the year. This can include:
- Creating invoices and receipts
- Tracking inventory
- Recording payments and expenses
- Hiring an accountant to help file your taxes
The main taxes you may need to pay are:
- Income tax
- Self-employment tax
- Local sales taxes
- Excise tax
Taxes may vary by state too, so be sure to research the specific taxes that apply to your business and make sure you’re compliant and staying abreast of filing deadlines. Filing taxes late or incorrectly can lead to penalties and interest charges, so it’s best to be prepared ahead of time.
16. Grow Your Business
Once you have a system in place and your business is running smoothly, it’s time to start thinking about ways to grow. This could mean expanding your product line, reaching new markets or hiring additional staff.
Another thing to think about is managing your inventory, as it can quickly get away from you when you’re not keeping a close eye on it. You may want to consider using inventory management software like a WMS (warehouse management system) to help you stay organized and keep an accurate count of your products.
Also, fashion and jewelry eCommerce ERP solutions can help you streamline your business processes and make it easier to manage your inventory, finances and customer data.
No matter what growth strategies you decide to pursue, always remember to stay focused on your customers and their needs. If you continue to provide excellent customer service and high-quality products, your business will continue to thrive.
How Do Beginners Sell jewelry?
There are a few different ways budding entrepreneurs start out their successful jewelry businesses. We’ve listed 10 of the most popular options below:
- Make sure your business finances are in order. This is essential for any business, but it’s especially important when you’re starting out. You’ll need to keep track of your income and expenses, and you may also need to file taxes as a self-employed individual.
- Get creative with your marketing efforts. Try out a few different methods and see what works best for you.
- Start small and grow from there. It’s important to have a solid foundation before expanding your business. Start by focusing on what you’re good at and then expand into other areas as you become more comfortable.
- Protect your jewelry brand by making sure the business you buy your jewelry from is legitimate and that the material is high-quality. There are a lot of scams out there, so it’s important to do your research before investing in any business. You don’t want your brand reputation hurt when you are just getting started!
- Take good care of your jewelry. This may seem like a no-brainer, but it’s important to remember that your jewelry is an investment. Make sure you’re taking care of it properly and storing it in a safe place.
- Make sure your customer service personnel are customer-centric. Your customers will remember how they were treated, so make sure you’re providing excellent customer service.
- Choose the right platform to sell your jewelry. There are a few different platforms to choose from, so do some research and find one that’s right for you.
- Market your jewelry company effectively. This process will require a lot of hard work, but it’s essential if you want your business to succeed.
- Stay up to date on the latest jewelry trends. This action will help you design new products and keep your business competitive.
- Submit your jewelry designs to contests. That way you’ll get exposure for your jewelry line and potentially win some prizes.
Whew! That was a lot of information! But if you’re ready to start your first jewelry company, it’s important to have all the facts at hand. By following these pointers, you’ll be on your way to starting a successful and profitable business.
This article, “How to Start a Jewelry Business” was first published on Small Business Trends