The jewelry business can be extremely lucrative — and we’re not just talking about the luxury market. Sure, celebrity jewelry like Demi Lovato’s engagement ring can go for a cool $2.5 million, but the market is much larger than any one niche.
As it stands, the jewelry market in the United States is worth $78 billion, and just 54% of that comes from diamonds. So what else is there? Whether you plan to sell costume jewelry on an ecommerce platform like Etsy, launch your own luxury boutique, or design a jewelry line of your own, here’s the complete guide on how to open a jewelry business.
Benefits of Starting a Jewelry Business
Jewelry is a massively 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 really 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 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.
How to Start a Jewelry Business Checklist
Starting a jewelry business is just like starting any other business, only in this industry, there are generally fewer legal requirements. If you’re working with diamonds, for example, you have to get them professionally certified. However, the toughest part of launching your own jewelry endeavor is choosing a business model. There’s already the market need, but who’s your target demographic? To get started with your jewelry business, see the checklist below.
1. Create a Business Plan
A business plan is an essential part of any business, and it greatly matters in the jewelry industry where business models can vary so drastically. First, consider the three primary niches: fine jewelry, fashion jewelry, or something in between.
Fine jewelry is the type of jewelry with 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 trendier, 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:
- Your overall jewelry business objectives and goals (think about your revenue goals, what you want to spend, and timelines for growth)
- Potential problems and solutions
- Budget and pricing
- Potential locations: some physical locations are better than others, or you can just sell your jewelry online.
- Branding, website, and logo
- Manufacturing and production
- Tax breaks and local grants: The Small Business Administration (SBA) may be able to help finance your startup costs.
- Your marketing strategy
If you need more advice about writing your business plan, check out our complete guide.
2. Choose a Business Structure
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. Typically, startup jewelry stores opt for either an LLC or sole proprietorship to avoid the so-called double taxation of a corporation. With these structures, profits are passed through to your personal return and not taxed on a corporate level and then a personal level.
Whether you choose an LLC or sole proprietorship depends on your business model. If you’re not launching your business alone, an LLC will help evenly split profits and liabilities among partners while giving your personal assets some protection. If your store is carrying a hefty rent or mortgage or you’re working with expensive, luxury materials, this may be a better option.
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 jewelry designers selling jewelry part-time on online marketplaces like Etsy or at craft fairs and flea markets. You can always file for an LLC online when you decide to expand.
3. Determine Your Business Costs
Pricing varies dramatically in the jewelry business, so before you start, you’re going to have to figure out the overall costs. There are three points you need to think about:
- Fixed costs: These are on-going expenses like rent, utilities, website domain costs, and insurance.
- Variable costs: These costs change month-to-month like inventory, raw materials, shipping, and packaging.
- One-time costs: This typically includes equipment like 3D printers, jewelry presses, and other tools, but also things like domain name registration.
A lot of these costs can vary quite dramatically. For example, a natural diamond costs significantly more than a synthetic gemstone. Rent on a brick-and-mortar storefront costs more than the monthly domain fees on, say, a Shopify business or Etsy listing. Creating handmade jewelry from wholesale material can also cost less than outsourcing manufacturing for custom designs.
Starting a costume jewelry business from your home can cost just a few hundred for your first inventory list. A fully fleshed-out brick and mortar store can cost $18 to $30 per square foot for monthly rental, while a single display case can cost $500 to $10,000.
How do you fund your startup costs?
Depending on the business model, a jewelry business can have extremely low costs. It may only take a couple 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.
4. Name Your Business
A name can cause a business to sink or swim. What you choose should uniquely embody your brand but also to be easy to understand 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 trademark lawsuit in the future.
As with most creative industries, it’s also a good idea to register your business — and your product designs — with the patent and trademark office.
5. Register Your Business and Open Financial Accounts
Once you’ve got your ducks in a row, it’s time to register your business. You can get an LLC license online for a small fee, but you’ll need to get a business license from your local administration first.
You’ll also need to open a business bank account and get the required insurances. For a jewelry business, that includes a general liability plan, but you may need additional insurance if you have employees.
6. Purchase Equipment For Your Jewelry Business
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:
- Raw materials like real or synthetic gemstones, metals, textiles, beads, wood, plastics
- Ready-made jewelry-making materials like charms, chains, gemstone settings, and jump rings
- 3D printers
- Silver and goldsmithing supplies
- Laser cutters
- Leather tooling
- Soldering supplies
These items can be purchased online, through wholesalers, or at specialty shops.
7. Market Your Jewelry Business
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 My Business. Paid search ads can also be effective.
Examples of Jewelry Businesses to Start
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 towards 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:
- Custom jewelry
- Fashion or costume jewelry
- Specialty jewelry
- Fine jewelry
- Jewelry design
Whether you’re a jewelry designer or you have an eye for style, starting a jewelry business is what you make it. This type of business is wholly scalable and often requires a low upfront investment while serving a large market. In other words, this is relatively low-risk as far as retail businesses go. Of course, as economies ebb and flow, people spend less money on fashion accessories, but that’s just the nature of the beast.
Jewelry Business FAQs
- What are the biggest challenges of a jewelry business?
There’s a lot of competition in the retail world, so standing out in the crowd is one of the biggest hurdles. Building a following through social media or by delighting customers with superior service can help.
- I’m a jewelry designer. How can I protect my intellectual property?
Consider copyrighting your designs, which are considered “visual art” under law. These are automatically copyrighted when your work is created, but you can also register your designs with the US copyright office.
- How much money does it take to start a jewelry business?
Fine jewelry sellers may need to make a large investment because gemstones alone can cost thousands of dollars, but if you’re selling costume jewelry, you can get started for less than a couple thousand depending on the business model.
- How much does the average jewelry business owner make?
According to Salary.com, the median jewelry store owner makes $40,143, but this can vary immensely depending on the niche. For example, full-time gemstone dealers will make a lot more than someone running an online shop that sells costume jewelry pieces after their nine-to-five.