Tips For Starting Your Own Jewelry Business
First, its important to have a good plan. A formal business plan isn’t neccessary unless you aim to get a loan or investors, but the plan should be thorough, especially in the financial section. The bottom line for most of us is: can I make a profit doing this? How long will it take to turn a profit? And, is this worth my time? Below I have outlined a few key factors to think about while devising your plan. I want to be clear that this is just a guideline, not a “how to” since everyone’s circumstances are different – what may work for one person may not work for another.
1. Why do you want to do this?
Is this something that you want to do for stricly for the money? For the thrill of starting something from scratch? Because you need to make extra money to pay your bills? Etc. The answer to this question will create the context you need to think through your plan. For example, if you want to start a jewelry business because you absolutely have to have extra money to survive – that consideration will limit your choices greatly because you will need to make decisions that lead you to a quick profit.
2. Market & Products
What do you plan on selling and why? Think about whether the jewelry or other products you intend to sell are right for your intended market. Diamond jewelry is probably not the right product for a flea market! Some good ‘off-line’ venues that I have used include:
- Craft fairs and outdoor festivals — generally in the summer time. You can usually get a table at these events for $20-$50 for the day. You will want to have a good selection of inventory; if you do you can usually gross anywhere between $150-$400 (based on my experience). If you hav. Your sales will be directly related to your quantity of inventory.Winter bazaars, church sales, holiday festivals — Oct-December. Check the local paper. Many churches have these annual events and tables are pretty inexpensive. These events are nice because people come to spend $ on gifts.
- Home-based jewelry parties. You can host an event yourself, or have a friend host it and give her some free stuff as compensation. I like to have a good friend or relative host – that way I am pretty sure they will follow through. Ask your friend to invite her friends, relatives, etc. for the party. You provide some light snacks and bring all your stuff. Again, people come to buy and you have no competition! If you get people to one of these you will make out pretty well, and you don’t need to have as large a selection. I have made up to $1500 in an hour and half! Typically, I’d gross $300-$500 in a pretty short time.
- Flea markets– usually in summer and holiday season. These can be boom or bust. It depends on whether, traffic, etc. Generally people at these want to spend very little, so the low-end stuff sells best. Good place to experiment since the tables are usually only $20 or so. I know people that go to the same flea markets every week and do very well with lots of repeat customers.
Store/ mall-cart. This is a much bigger leap since the overhead is so high compared to the above venues. I have done neither so cannot offer any good advice in except to plan really well and consider all the costs involved.
3. Where will you get your inventory?
This is the place you will need the best research. Unless you are selling in large volume, you will probably want to get a markup of about 3 times (what you paid for inventory). The lower the price you pay for your goods, the lower the price you can offer your customers/ the more profit you will make. You will always save more when you buy in bulk, so look for a supplier you can form a long-term relationship with who can give you good deals, service and selection. Buying a large quantity now may seem like a big expense now, but the result is you make more profit on every single item you sell.
- The more you spend the more you save. Find a few good suppliers and see what sells well and who is willing to work with you. Find suppliers who provide good service and are committed to your success.
Buy off ebay- many people buy stuff at good prices then just re-sell - Search the web for other silver jewelry wholesalers.
- Buy from me! I have a wholesale website with very good deals and always have closeout lots. Once in a while someone calls wanting to ‘haggle’. Well, call me old-fashioned, but I like to be straight-up and help everyone, especially the little guy. I offer the same low price for a $75 order as I do for a $1000 order. Check around and you will see that our prices are very low, value is very high and there are few wholesalers who offer no-hassle pricing and ordering as this site does.
- Search the web for manufacturers. Most are in Asia. And you will get the best deals this way – but you are going to have to spend $3000+ to get the best prices and give yourself 6 months to find the right vendors, get your inventory and develop a relationship. It seems simple, but trust me, the cultural differences alone will add 3 months to the process! Unless you need 20+ designs of each design you order, or actually want to get a mixed batch of random left-overs that you will not see in advance, this is not a great option for most small businesses.
4. Is an online business right for you? … or …
I make a living through my website. My business is successful because I:
- Have an efficient system to manage business operations
- Provide excellent service
- Have several great, inexpensive source for products – suppliers that I know well and trust 100%
- Purchase a high volume of jewelry each month (enabling lower margin on each item)
- Spent time researching/ testing products and marketing strategies and learning about ecommerce
- As I said, everyone’s situation may be different, but this is what works for me. I started about 6+ years ago part time, and within about 6 months had a full time internet business. I never expected it to work out this way, but it’s still going strong. Now it is much easier to get started from the technical side — the major auction sites offer good services for beginners and there are products out there to manage your business. You can even start a fully-functional ecommerce website without knowing any html! See links below for details. It is the “systems” that are the key factor for me. I have a system for inventory, a system to communicate with customers and a system to manage the fullfillment and customer service process. Most of my systems are computerized but I always take the time to get to know my customers in person when I have the opportunity.
5. … Is an offline business right for you?
Many folks are intimated at first by the whole ecommerce thing. The truth is an off-line business can be just as successful. Unless you have a lot of capital you want to start off (and continue!) with low overhead. So, you don’t need to go out and buy a store front! You can start by buying a small amount of intentory and testing the waters.
- Try selling to friends and co-workers
- Host a jewelry party (or better – have a friend host it) and invite a lot of people. I once made $1500 in an hour an a half! Typically, I would make about $400 or so in a couple hours.
- Rent a table at a craft show (summer fair or church bazaar around holiday time). Tables are usually only $20-$40 for the day.
- Get a spot a flea market
- Put stuff out at your or your friends garage sales. It really works!
- My advice is until you really know your market and have a handle on your revenue stream, start small. This way you are not going to lose much, if any, money.
6. Business licenses, TaxID numbers, merchant accounts, etc.
Check with your state to see what is required to do business. My experience is that it is very simple. You can get a TaxID, which takes about 1 hour and you can do it by phone, and this enables you to buy inventory without paying sales tax. But keep in mind that most vendors will be out of your state and wiill probably not charge sales tax anyway. In this case most vendors may not even need a TaxID. In terms of taxes, you can file under your TaxID or your social security number. If using your social security number and keeping the business under your own name, I do not THINK you need a TaxID, as long as you claim all your income appopriately. If you plan to have a business checking account you will need a TaxID number.
As far as I know you do not need any special license to sell retail. But you should contact your state tax office to get all the paperwork you will need to remit sales tax to the state. You are required to collect sales tax on retail purchases (most internet companies only charge sales tax to customers that live in the same state as the business). And at the end of the year, you have to pay this tax to the state.
As your business grows, its a good idea to take credit cards, especially for online businesses. Nowadays this is pretty easy. I get about 20 offers a day via email to setup merchant accounts and accept credit cards online. Do a search on google.com and you will find hundreds of places to do this for you! The cost is about $25/ month + $200-$300 setup fee. Another option is to use only a PayPal account. The account is free to setup. Get a paypal account regardless of what you do because its essential!! I’d say 50% or more of online shoppers now, and 80% of ebay customers have paypal accounts.
* I am NOT an accountant! This information is just based on my experience and may not be accurate.
7. Why am I telling you all this?
I could have used the advice when I got started! There is also plenty of market-share out there to share and I enjoy helping people get started in their own businesses. My other selfish motive is that since I am a wholesaler, it is in my best interest to help my customers succeed and would be happy to provide you with the inventory for your business. Even though my business has grown substantially since I started out, I still feel truly grateful to every one of my customers who enable me to succeed and allow me to pursue the lifestyle I choose. I am not interested in making a quick buck and I often tell people if I think there needs do not match with what I can provide – I only want to sell to people if I can help them be successful. I have shopped around a lot and will tell you that the products I carry are absolutely the nicest you will find in their price-points. And short of going to Bali or Kathmandu yourself I can provide you the lowest prices. In fact, I am so confident in my products and level of service that I provide a list of my competitors – other wholesale silver jewelry suppliers to make it easy for you to comparison-shop. If you find something better suited for your needs elsewhere, I truly wish you success.
8. These are the sites that I use frequently These are all sites that I use everyday!
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
very enlightening.. thanks