Starting a jewelry business can be a rewarding career. When you design and craft your own accessories, you'll get the chance to exercise your creative talents. Plus, you'll have the opportunity to make people feel special by bringing some added sparkle to their lives. Read on to discover how to start a lucrative jewelry business.
Putting the Pieces of Your Jewelry Business Together
You don't need any formal education to thrive as a jewelry retailer. Thanks to the rise in e-commerce platforms and online shopping, it's easier than ever to establish a burgeoning accessories brand. Success will come from identifying a promising niche, developing a unique brand, and nurturing a loyal following.
With proper preparation, you can reach consumers around the world. Follow these steps when planning how to start a jewelry business.
Select a Niche
Jewelry comes in many forms. Decide which types of jewelry you want to create. Your options include:
- Fine jewelry: Fine jewelry is individually handcrafted (not mass-produced) using semi-precious and precious metals and high-quality gems. It commands a higher price point than the other options and is generally bought by customers shopping for a special occasion, like a wedding or luxury gift.
- Costume jewelry: Also called fashion jewelry, costume jewelry is more trend-driven. It's made of less expensive metals and materials, such as plastic, synthetic gems, beads, wire, plated metal, and more. Fashion or costume jewelry can be mass-produced. It costs less than fine jewelry and is geared toward everyday customers.
- Handmade jewelry: Handmade jewelry falls between fine and fashion/costume jewelry in that it doesn't necessarily have to be fancy or pricey but it also can't be mass-produced. Each piece is made by hand. Handmade jewelry can suit a diversity of price points depending on the materials used to make it.
When selecting your niche, take into account your personal skills and access to resources. For example, if you want to produce fine jewelry, where will you get your precious gems from? If you're going to create handcrafted jewelry, do you have the tools and talents to create it yourself? You can hire someone else to do the handiwork but then you'll have to cover the cost of production.
A market analysis may also help you decide what niche to pursue. Check out fashion magazines, jewelry design blogs, and existing jewelers advertised on platforms like Etsy, eBay, Instagram, and TikTok. You may notice a gap in the market that you can fill as a jewelry designer.
Define Your Target Market
When considering what niche to pursue, you also have to think about your target demographic. For example, if you create costume jewelry, you can easily reach a large audience of online consumers via platforms like Etsy. If you create fine jewelry, you will have a smaller target audience but will likely ask for more per piece of jewelry.
There is also the personal aspect to consider. Do you want to have the option to scale up and mass-produce your product or do you prefer to create one-of-a-kind jewelry pieces by hand yourself? Some jewelry retailers are happy to produce jewelry products for everyone, while others enjoy the sentimentality of crafting a custom piece for a specific customer and occasion (e.g., an engagement ring).
Define Your Pricing Model
Your niche and target audience will also determine your price point. As mentioned, fine jewelry uses more expensive materials and will have to sell for more if you're going to turn a profit. You have to account not only for the cost of materials but also for the jewelry making (whether that means accounting for your own work or paying a craftsman).
You likely won't be able to determine a "one size fits all" price, as the cost of each piece of jewelry will vary depending on factors like materials used. However, it's good to establish a range of how much you need to charge to turn a profit on each piece. Factoring in the aforementioned costs and looking at what other jewelry brands charge can help you get a sense of pricing.
Determine Your Overhead Costs
When considering how to start a jewelry business, there are also general overhead costs to consider, including:
- Machinery and tools for manufacturing
- Commercial rent, if you opt to establish a brick-and-mortar jewelry store
- Packaging and shipping, if you opt to sell your jewelry online
- Employee wages (e.g., shop staff, handiworkers, etc.)
- Branding and marketing strategy
- Website costs (e.g., design, graphics, SEO, product photography)
- New business equipment like computers, mobile phones, etc.
There are also various insurance costs to consider. For example, if you sell jewelry with expensive gemstones, each piece will likely need to be insured (especially if you're sending it via mail). If you open a brick-and-mortar location, you need to consider commercial property insurance. If you employ staff at your shop, your state may require worker's compensation insurance. The precise insurance needs will depend on the business model.
Write Your Business Plan
With the above issues figured out, you can write a business plan. A comprehensive startup plan includes:
- An executive summary
- A description of the products and services
- A company description
- A description of the company structure (e.g., LLC, sole proprietorship) and management structure (e.g., are you going into business alone or with a friend?)
- Market research/analysis
- A marketing plan
- Financial projections
- Any funding requests (if you plan to approach external investors or lenders for funding)
The U.S. Small Business Administration (SBA) has tips on writing a business plan. You can also contact your local SBA office for guidance on writing a business plan and support in determining which licenses or permits you'll need to open your business. For example, if you open a brick-and-mortar location, it will have to meet local safety regulations (e.g., having the requisite number of fire exits).
Starting Your Own Jewelry Business
With the above planning process complete, you can take the formal steps to start your jewelry business.
Ensure Your Business Meets Legal, Tax, and Insurance Requirements
Establishing your business as a legal entity (like a corporation, partnership, limited liability company, etc.) distinguishes you as a person from your business. This can be useful in case your business faces legal issues. Formally registering your business can also provide tax advantages. Once you've registered your business, you'll also be able to easily open a business bank account, which lets you separate your personal and company finances.
When registering your business, you'll have to select a distinct business name. Choose a moniker that's memorable and unique from competing jewelry industry brands. Choose your business's legal name carefully as you'll have to use it on your branding and marketing materials (e.g., website domain name, business cards, etc.) going forward.
Business formation rules vary between states, so do your research to see what paperwork your state requires. At this point, you should also confirm whether you need any permits, licenses, or insurance to start your jewelry business. For example, your state may require you to get worker's compensation insurance if you hire staff.
Your business structure will also determine your tax obligations. For example, if you establish a limited liability company (LLC), you have a "pass through" entity. In this case, money the business makes "passes through" to the owners/managers (you) and the owners/managers are then taxed on their income. This avoids double taxation. In contrast, corporations may be taxed directly as an entity. If you aren't sure which entity suits your needs, consult a business attorney.
Find Creative Ways to Boost Your Jewelry Brand's Profile
If you're going to sell your jewelry, you have to get the word out to attract potential customers. Follow these steps to get started:
- Create a beautiful website. It should be user-friendly and include clear descriptions and images of your jewelry. Even if you have a brick-and-mortar store, you want to give customers a peek at what they can anticipate online. If you have an online store, ensure the website is secure and equipped to handle online payments. You can create a website using platforms like Wix, Squarespace, Shopify, or Weebly - or you can hire a pro.
- Get active on social media. Visually driven social media platforms are a great way to show the world your sparkling gems. Instagram and TikTok are two popular options. You should also establish profiles on general listings like Google My Business and Yelp, however. People can review your business via these platforms, offering useful "word of mouth" marketing that other consumers can trust. Again, you can create your own social media or find experts in social media marketing via platforms like Upwork.
- Establish a brand identity. Your brand identity should speak to your target audience. A comprehensive identity covers everything from your logo and slogan to a color palette and verbiage on your website. For example, if you're creating exclusive high-end jewelry that costs five figures, your language will likely be more formal than if you're making mass-produced baubles.
With these basic marketing tools in place, you can start promoting your jewelry line. For example, once your website is ready, you can push it via platforms like social media. Then, once you have your social media built up, you might link up with influencers to promote your brand.
Set Up Streamlined Processes to Simplify Business Operations
As you start to expand your customer base, you will have to put in added effort to maintain your jewelry business. In addition to creating the products and marketing them, there will be day-to-day admin to handle. This includes issuing invoices and receipts to customers, tracking payments, and issuing packing slips (if you ship your goods). You should also track all of your expenses, from materials to packaging costs, for tax write-offs.
Admittedly, this can be the less fun side of the business. Skynova helps make these tasks less tedious with handy software products. Our business templates simplify the process of creating documents like invoices, while our accounting software lets you organize all of your financial data in one place. You can also learn more about accounting using the Skynova learning modules.
Get the Support You Need for Your Jewelry Business
Starting a jewelry business is an exciting opportunity to share your creative talents with the world and give people beautiful accessories that can last them a lifetime. However, you also have to attend to administrative aspects of your business, like issuing invoices and collecting payments. Let Skynova alleviate the administrative hassle. We help business owners succeed with our templates, accounting software, and informational modules. Find out how we can help you.