Making the leap from a hobby jewelry maker to starting a jewelry business can be both scary and exciting. If you find yourself unable to give away jewelry to friends and family anymore, and finished pieces keep piling up, it might be time to consider selling some of your jewelry.
The beauty of a jewelry business is that you can scale it to be as large or as small as you are comfortable with. Begin by selling some of your work in an online marketplace such as Etsy, in local farmer’s markets or on consignment in shops near you. As you feel comfortable, you can expand to having your own website, dedicated space at an outdoor market, and even supplying department store chains. How large you grow is completely up to you and how well you manage your jewelry business.
1. Have a Business Plan
Before you take that step from hobbyist to entrepreneur, take an hour or two to create a rough outline of what you hope to accomplish with your jewelry business and the steps you want to take to get there. Having a clear-cut plan in the beginning will enable you to focus on the important aspects of running your business and keep your eyes on your goals. For example, if your goal is to develop strong wholesale contacts and focus on selling directly to businesses, you will progress far differently than if you want to have a strong retail presence in your local area. This plan does not need to be a formal business plan such as you will need for bank financing, but it should serve as a personal guideline to help you on your journey.
2. Source Wholesale Jewelry Supplies
One of the most important aspects of any business is controlling costs. If you have been purchasing your jewelry supplies at retail prices, you will not be able to make as much of a profit as when you buy your jewelry supplies wholesale. There are many reputable sources online and sometimes in your local area. Take time now to research the companies that carry the supplies you need, and find out what their ordering requirements are. Some popular online companies include Rings N Things, Shipwreck Beads, Rio Grande and Jewelry Supply.
3. Obtain a Business License
Licensing requirements vary by state, so check with your local business board, but typically, to sell your jewelry you will need to have a state business license. Business licenses entitle you to collect sales tax on all local sales, which is remitted quarterly or annually to the state. Not all states collect sales tax, but your local business board will be able to tell you what you need. Many wholesale companies will not sell to you at wholesale prices without this business license or the accompanying resale certificate (again, state dependent). The fee for acquiring a business license is usually very small. In Washington state, for example, it is $20 paid one time.
4. Account for Everything
The IRS states that you must pay taxes and file a tax return on any income-generating activity that you operate with the intention of making a profit. If you sell a couple of jewelry pieces a year and do not intend to make a business of it, you will not necessarily have to report the sales as income. If you plan on starting a jewelry business, however, you will be required to keep exacting records of both income and expenses and file a tax return with your taxes every year. This is not as daunting a task as it seems. Be sure to start on the right foot by keeping all receipts and keeping track of your transactions and tax time will be a breeze.
5. Track Inventory
Before you begin, you should also know that you will need to keep track of your inventory, both jewelry supplies and finished pieces at their cost value. Knowing this at first can save you a lot of headache at the end of the year when you struggle to count every single bead and supply. Tracking can be as simple as a sheet of paper with the item name, number in stock and price each. If you have Excel or Open Office, a spreadsheet can be a lifesaver. Simply add to your inventory number every time you purchase a component, and then remember to deduct it every time you use a supply to create a new jewelry piece. Do the same with your finished pieces and at the end of the year you will already have the information you need for a tax return.
6. Decide Where to Sell Your Jewelry
This should be included as part of your business plan. When you are ready to begin selling your jewelry, determine where you want to sell it. Some common ways of selling jewelry include online at a community marketplace such as Etsy or eBay, on your own website, on consignment at local shops, wholesale to other businesses, at farmer’s markets and at craft shows. Each method of selling is quite different from the other, so pursuing as many as you are comfortable with will help broaden your reach and provide you will multiple income streams.
7. Create Marketing and Packaging Materials
There is much to be gained from a memorable presentation. When you sell a piece of jewelry, how you package and present it to the customer can be a factor in convincing them to return for more. The most important thing, of course, is the quality of your jewelry, but giving your customer memorable marketing materials can help keep you on their mind and in their wallets. Since branding is so critical to business memorability, you may want to spend money to hire a professional to create your business brand. You do not need to spend hundreds of dollars, but try to hire the best you can afford. Etsy.com has many quality designers selling their work at very reasonable prices. Ask around to find one who will be able to create your vision for you. Many specialize in providing branding for jewelry businesses and offer customized business cards, earring hang tags, price tags and even web banners and logo design.
8. Price Your Jewelry
This aspect of starting a jewelry business is often the most difficult for beginners to get a good grasp on. Do not be afraid of pricing your jewelry too high; often the trouble is setting prices too low to profit. When you set a price on an individual piece of jewelry, you need to be sure to include all costs that went into making that item. Just because one bead only costs you pennies does not mean it does not belong in the cost calculation for an item – pennies add up over time to dollars that cut into your profit when not accounted for. Two items commonly omitted from the pricing equation are packaging materials and labor. You must pay yourself an hourly wage; you would not work for someone else without adequate compensation, so do not short yourself here. Packaging materials such as hang tags, business cards, tissue paper and gift bags all add up and should be accounted for in your jewelry price.
9. Be Prepared For Occasional Failure
A common mistake many business owners make is expecting too much too soon. It takes time and hard work to build a business, and most growth occurs from word of mouth. In order for word of mouth to spread, you need to put yourself and your brand out there in the public eye. This will not happen overnight and sometimes you will find the results of your efforts dismally disappointing – this is all part of doing business. Have a positive mindset from the beginning and learn to shrug off disappointments like a poorly performing craft show or a quality issue from a bad component. Knowing to expect these little road bumps before you start can help set you squarely on the path to success by giving you the foresight to understand this will happen no matter how hard you work.
10. Launch Your Business!
After you have made preparations, sourced your supplies and marketing materials and set accurate prices, you will be ready to start selling your jewelry. This may well be one of the most exciting moments in your life, so treasure each little success and failure as a memory and aid to help you in your long-term success. Know that you have prepared all you can and that jewelry will always have a market. It may take some time to build up a following, but with hard work and perseverance, you can successfully start and maintain a jewelry business.