Starting your own jewelry business can be a rewarding endeavor, demanding an initial investment ranging from $5,000 to $20,000 or more. In this guide, we’ll explore the key skills you need to succeed, including creativity, knowledge of jewelry design, and sharp business management abilities.
The global market has plenty of demand for unique, custom, and handmade pieces, and with profit margins spanning from 25% to 75%, the potential for a lucrative venture is at your fingertips. However, it’s not without its challenges, such as inventory management, establishing a distinct presence in a crowded market, and upholding quality. Let’s examine how you can turn your passion for jewelry into a thriving business.
|Initial Investment||Estimated startup costs can range from $5,000 to $20,000+ for materials, tools, and marketing.|
|Skills Required||Creativity, knowledge of jewelry design, business management abilities, and strong sales and marketing skills.|
|Demand||High demand globally, especially for unique, custom, and handmade pieces.|
|Location||Can be home-based, but a retail location in a high foot-traffic area is beneficial.|
|Hours||Flexible, but can be long, especially during holiday seasons and craft shows.|
|Permits and Licenses||Depending on your location, you may need a business license, a sales tax permit, and a trademark for your brand name.|
|Profit Margin||Average profit margins range from 25% to 75%, depending on the materials used and pricing strategy.|
|Challenges||Managing inventory, standing out in a competitive market, and maintaining quality.|
Jewelry has a lucrative global market, and starting your own jewelry business can be rewarding on numerous levels. For one, if you’re passionate about fashion or have a creative flair that needs nourishing, it can be a fulfilling career. Beyond that, it’s one of the most flexible types of businesses a person can start.
The upfront investment of a jewelry store varies greatly based on the product type and the source. Are you working with gemstones and precious metals or acetate and lab-made stones? Are you designing fine jewelry or affordable items? Are you purchasing products through a wholesaler or an independent designer? The margins run the full gamut, and you can scale your business depending on your capital.
This unique industry also has a number of different mediums through which you can sell. You may go the route of weekend flea markets and craft fairs, online marketplaces, brick-and-mortar storefronts, or wholesalers. You can start this business as a side gig with minimal commitment and evolve to something greater once you have more financial stability.
Starting a jewelry business has many steps in common with starting any other business, though there are also some unique processes. If you’re working with diamonds, for example, you have to get them professionally certified. Take a look at our step-by-step checklist to see what you need to do to get your jewelry business off the ground.
A business plan is an essential part of any business, especially in the jewelry industry where business models can vary drastically. First, consider the three primary niches: fine jewelry, fashion jewelry, or something in between.
Fine jewelry has the highest pricing, made with precious and semi-precious metals and gemstones. Fashion jewelry (also known as costume jewelry) is more for the average customer. It’s less expensive and made from cheaper materials.
Overall, your business plan needs to define your product and target audience. Are your customers men or women? Do they have a classic or trendy aesthetic? Are they looking for heirloom pieces or everyday fashion? During this process, also consider:
For tax and legal purposes, all businesses need a business structure. It determines how you report your income to the IRS and how your personal assets are protected against potential liabilities. Many startup jewelry stores opt for either an LLC or sole proprietorship to avoid the so-called double taxation of a corporation, in which the same money is taxed first at the corporate level and then on the individual level. With an LLC or sole proprietorship, profits are passed through to your personal return, and there is no corporate tax paid.
Whether you choose an LLC or sole proprietorship depends on your business model. An LLC gives your personal assets some protection — if someone sues your business, they can only target your business assets and not your house, car, personal bank accounts, etc. If your store is carrying a hefty rent or mortgage or you’re working with expensive, luxury materials, this may be a better option. If you want to form an LLC, a business registration service can be a great help.
At the same time, a sole proprietorship is a quicker start. All you need is a tax ID number, which you can get from the IRS website. This route is often chosen by business owners and designers selling jewelry part-time on online marketplaces like Etsy or at craft fairs and flea markets.
A company name can cause a business to sink or swim. What you choose should uniquely embody your brand and also be easy to find on social media platforms. Do a Google search and check local business registrations to make sure your name isn’t taken, or you could face a lawsuit in the future. As with most creative industries, it’s also a good idea to register your company’s intellectual property — and your product designs — with trademarks.
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Once you’ve got your ducks in a row, it’s time to register your business. You’ll also need to open a business bank account to keep business finances and personal finances separate. This is also a good time to get the required insurance coverage. For a jewelry business, that may include a general liability policy, but you may need additional insurance if you have employees, such as workers’ compensation.
Pricing varies dramatically in the jewelry business, so before you start, you’re going to have to figure out the overall startup costs. There are three core points you need to think about:
A lot of these costs can vary dramatically. For example, a natural diamond costs significantly more than a synthetic gemstone. Similarly, rent on a brick-and-mortar storefront costs much more than the monthly domain fees for a Shopify business or Etsy listing. Creating handmade jewelry from wholesale materials can also cost less than outsourcing manufacturing for custom designs.
Starting a costume jewelry business from your home can cost just a few hundred dollars for your first inventory list. A fully fleshed-out brick-and-mortar store can cost around $30 per square foot for monthly rental, while a single display case can cost up to $10,000.
Depending on the business model, a jewelry business can have low costs. It may only take a couple of thousand dollars. There are multiple options to consider for funding, including a low APR business credit card, as well as business loans or investments from friends and family. Just remember: Nothing is ever free, and you can potentially sour personal relationships if things go wrong.
Regardless of the method, business owners can also look into government assistance. The SBA can help new business owners score grants and loans.
The necessary equipment for your jewelry business varies, but most jewelry businesses will require standard office and shop supplies like a cash register, a POS system through Square or Paypal, a computer, office furniture, and shipping and packaging supplies. The rest depends on your business model and could include:
These items can be purchased online, through wholesalers, or at specialty shops.
Marketing is crucial, especially for an online business. Consider creating a cross-platform social strategy that focuses on all major platforms. With a new jewelry business, Instagram and Pinterest are particularly effective — especially if you partner with social media influencers or local businesses to generate some initial buzz. And if you work with other local businesses, consider sharing basic marketing materials with them like pamphlets and business cards.
In addition, make sure your website is optimized for search engines. And if you have a physical location, you can register your business with Yelp and Google Business Profiles. Paid search ads can also be effective.
There are a number of different types of jewelry businesses, each with their own niche markets. For example, Brooklyn’s Catbird sells fine jewelry catered toward both heirloom pieces and everyday wear. Los Angeles-based Laser Kitten sells bold pop-culture and vintage-inspired costume jewelry. The UK-based Tatty Devine focuses on custom, laser-cut acrylic pieces.
Other jewelry businesses resell wholesale fashion jewelry at retail prices. You often see this approach on Etsy or eBay. Some focus on special occasions like engagements, while others are considered fast fashion. Consider focusing on:
Whether you’re a professional jewelry designer or you simply have an eye for style, starting a jewelry business can be a flexible and profitable endeavor. This type of business is wholly scalable and often requires a low upfront investment while serving a large market. We can help keep your startup costs low by providing free LLC formation services (just pay your state’s fee).
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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