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Tips for getting started with a jewelry business
Why do you want to do this?
Market & Products
Online (Auctions, website, etc.)
Offline (jewelry parties, flea markets, etc.)
Inventory - where to buy?
Business licenses, TaxID numbers, merchant accounts, etc.
Why am I telling you all this?
First, you need a good plan. A formal business plan isn’t necessary unless you aim to get a loan or investors; but your plan should be thorough – especially in its 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? Is this worth my time?
Below, I’ve outlined some key factors to
consider while devising your plan. I want to be clear that this is a
guideline, not a “how to,” as everyone’s
circumstances are different: What works for one person may be disaster
Is this something you want to do strictly for the money? For the thrill of starting something from scratch? For extra money to pay your bills? Whatever your motivation, your answer will create the context you need to think through your plan. For example, if you want to start a jewelry business because you absolutely must have extra money to survive, that limits your options greatly, because you’ll need to make decisions that lead you to a quick profit.
What do you plan on selling? Are the products you intend to sell right for your intended market? Diamond jewelry is probably not the right product for a flea market! Some good ‘offline’ venues I have used include:
- Craft fairs/outdoor festivals (generally in the summertime). You can usually rent a table at these events for $20-$50 for the day. With a good selection of inventory, you can usually gross from $150-$400 (based on my experience). Your sales will be directly related to your quantity of inventory.
- Winter bazaars, church sales, holiday festivals (generally October to December). Check your local paper. Many churches sponsor these events and tables are fairly inexpensive. These events are nice because people come fully intending to buy gifts.
- Home-based jewelry parties. You can host an event or have a friend host it (and give her free jewelry as an incentive). I like to ask relatives/close friends to host parties – that way I am pretty sure they’ll follow through. Have your friend invite friends, relatives, coworkers, etc. Provide some light snacks and bring all your jewelry. Again, people come to buy and there’s no competition! If you get people here, you’ll make out pretty well, and you don’t need to have as large a selection. Typically, I’d gross $300-$500 in a short time; but I’ve made up to $1,500 in 1½ hours!
- Flea markets (usually summer and holiday season) can be boom or bust. Success depends on factors like weather, traffic, etc. Generally people want to spend very little, so low-end stuff sells best. They tend to be good places to experiment, as table rentals are cheap (usually $20 or so). I know people who go to the same flea markets every week and do really well, with lots of repeat customers.
- Store/mall cart. This is a much bigger leap, as the overhead is high, compared to the other venues. I haven’t done either of these, so my advice is plan carefully and consider all the costs involved.
This is where you need to do your best research. Unless you sell large volumes, you’ll probably want to get a markup of about three times what you pay your jewelry wholesale supplier for inventory. The less you pay for merchandise, the lower the rate you can offer customers (and, therefore, the more profit you make).
You save more buying in bulk, so find a jewelry wholesale supplier with whom you can form a long-term relationship and who offers good deals, service and selection. Buying large quantities of wholesale jewelry may involve greater expense, but the result is higher profit on each item you sell.
Generally, the more you spend, the more you save. Shop jewelry wholesalers; find a few good suppliers and see what sells well and who is willing to work with you. Find jewelry wholesale suppliers who provide good service and are committed to your success. p>
- Buy from ebay – many people buy merchandise at good prices, then resell
- Search the web for other wholesale silver jewelry suppliers
- Buy from me! My wholesale jewelry site features excellent deals and always has closeout lots. Occasionally, someone calls wanting to ‘haggle.’ Well, call me old fashioned, but I like to be straight up and help everyone – primarily the little guy. I offer the same low price for a $75 order as I do for a $1,000 order. Check around and you’ll realize our prices are low and our value is high. Few other wholesalers offer no-hassle pricing and ordering.
Search the web for manufacturers. Most are in Asia. You’ll get the best deals here – but you have to spend $3,000+ to get the best prices – not to mention 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 wholesale gemstone jewelry item, or you actually want a mixed batch of random leftovers you can’t see in advance, this isn’t a great option for most small businesses.
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 wholesale jewelry and wholesale jewelry supplies – vendors 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 is unique, but this is what works for me. I started in 2000, part time and, within about six months, had a full-time wholesale jewelry online business. I never expected it to work out this way, but it’s still going strong.
Now it’s much easier to get started from the technical side: The major auction sites offer excellent services for beginners and there are products available to manage your business. You can even implement a fully functional ecommerce website without knowing html! (See links below for details.) “Systems” are key for me. I have a system for inventory, a system to communicate with customers and a system for managing order-fulfillment and customer-service processes. Most of these systems are computerized, but I take time to get to know my customers personally, whenever I can.
Many folks are intimidated at first by the whole ecommerce thing. The truth is, an offline business can be just as successful. Unless you have a lot of capital, you want to maintain low overhead. You don’t need to go out and rent a storefront! You can start by buying a small amount of inventory and testing the waters. Other strategies include:
- 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 $1,500 in an hour and 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.
Check with your state to see what is required to do business. My experience is that it is very simple. You can get a Tax ID, which takes about an hour and you can do it by phone. This enables you to buy inventory without paying sales tax. Keep in mind most vendors will be out of your state and will probably not charge sales tax anyway. In this case, most vendors may not even need a Tax ID number. But do your research for your state requirements. In terms of taxes, you may be able to file under your Tax ID or your Social Security number. Check with your state’s Department of Revenue Services to determine what your particular regulations are. If you plan to open a business checking account, you will need a Tax ID number.
Contact your state tax office for the paperwork (and any licensing information) you need to remit sales tax to the state. You are required to collect tax on retail purchases (most internet companies only charge sales tax to customers who live in the same state as the business). At the end of the year, you have to pay this sales tax to the state.
Please note: I am NOT an accountant or a tax professional! This information is based on my experience and may not be accurate in your state.
As your business grows, it’s a good idea to accept credit-card payments, especially for online companies. Nowadays, this is easy. Do a search on Google.com and you will find hundreds of places to do this for you! The cost is about $25/month plus a $200-$300 set-up fee. Another option (which I strongly recommend!) is to use a PayPal account – which is free to set up. At least 50% of online shoppers (and more than 80% of ebay customers) use PayPal.
Because I could have used this advice when I got started in the wholesale jewelry online business! There is plenty of market share out there to go around and I enjoy helping folks get started in their own businesses. My other, selfish motive is that, as a wholesaler, it is in my best interest to help my customers succeed – and I’d be happy to provide you with inventory for your business.
My wholesale jewelry business has grown substantially since I started out and I feel truly grateful to every one of my customers who has enabled me to succeed and allowed me to pursue the lifestyle I choose. I’m not interested in making a quick buck and I’ll tell you if I believe your needs don’t match what I can provide. I only want to sell to people if I can help them be successful. I shop around a lot and I’ll assure you the products I carry are absolutely the nicest you can find in their price points. And, short of traveling to Bali or Kathmandu yourself, I provide the lowest prices on top-quality wholesale sterling silver jewellery.