How to Start a Jewellery BusinessAug 13, 2022
Is making jewellery profitable?
Can you make a good living from designing, making and selling jewellery?
It’s an important question. A fulfilling, creative career is a dream for many, but it needs to work in practice, too. You need to support yourself and make enough money to live life to the fullest. Fortunately, the answer is yes, you absolutely can – if you put the effort in.
Artisan jewellers have so many options to choose from, including fine, custom-made, fashion, craft, and costume jewellery, to name but a few. Depending on your approach, you can tap into the luxury market, or simply set up a market stall in your local town.
Launch costs are usually low, especially in the fast-moving, ever-changing world of fashion. Check out our short market analysis below. Fine jewellery has higher start up costs due to the cost of materials, but it’s still doable.
We’ll be honest with you – the industry is very competitive. So, your success doesn’t just rest on skill. Designing and making beautiful things is just the start – you need a good business plan. Make sure your approach is smart and market-savvy.
The Jewellery Market
It’s often said that lipstick is recession-proof as it’s an affordable treat in straightened times. So too, it seems, is the jewellery industry. According to a report by business intelligence group Key Note, the jewellery industry remained profitable during the recession and experienced consistent growth in the last five years. Back in 2014, it jumped 3.4%.
Due to its higher price point, fine jewellery accounts for a large proportion of all jewellery sales in terms of value. However, it has increased at a slower rate than the sales of its costume and fashion counterparts. Though people will always want to mark important life events, consumers are now looking for attractive, lower cost pieces. In response, many independent jewellers are launching fine designs alongside more accessibly priced alternatives.
How to make your jewellery business profitable
You can set up a successful jewellery business, especially with the support of our friendly community of fledgling entrepreneurs. It just takes effort, especially at the planning stage. It’s still great fun – just make sure you keep your business brain tuned as you learn how to sketch, solder and cut. It’s much easier than you might think. Here’s a quick overview.
Create a business plan
1. Do your research
Create a firm foundation for your new business by researching every single aspect of it. Ask yourself the following questions:
What will my target market be?
This may come from your natural interests. Like Kate Moss, fashion may be your passion. Just make sure you’re targeting everyone you can. After all, jewellery is popular with people of all ages, cultures and backgrounds. Diversity is increasing within the industry, too.
Which price point will be best?
This depends on what kind of jewellery you make. Find out more in the next section.
Where will I do my work?
Many people start from a small kitchen table at home. As your business expands, you may need a bigger workspace.
What about my start-up costs?
It’s amazing how cheap jewellery can be to make – you only need a few basic items to get started. If you adore about fine jewellery, you might need to save up a bit. Consider launching a cheaper line to build up a reserve of cash for your passion pieces.
Where will I manufacture?
Think about whether it’s realistic to make everything yourself. Perhaps you’ll need to hire experts such as goldsmiths. And will you be manufacturing here or abroad?
Where will I get my materials?
The precious jewels and metals industry is very controversial due to the exploitation of people working in mines in developing countries. Fortunately, awareness is increasing and ethical alternatives are emerging. It’s really important to do your homework on this one.
2. Rules and regulations
This part can seem very official, and you need to know your stuff. Rest assured, as long as you know the rules, you’ll be fine. Here are a few to start you off – you’ll find the website links at the bottom of this article.
You’ll need to register your business with HMRC and pay the correct taxes. Fortunately, their website is packed with information, and there are lots of blogs and videos online too.
Trade Descriptions Act
With this, traders like yourself cannot make false claims about a product, nor sell counterfeit goods.
Sale of Goods Act
This exists to protect customers. Essentially, what you sell must be of acceptable quality and fit for purse. If not, you must offer an exchange, credit note or refund.
If you work with precious metals, it’s essential to get them hallmarked.
IP (Intellectual Property)
It’s really important to protect your work. Register everything you create with the Intellectual Property Office. Keep your eye out for copycats – you put the effort in, so you should receive the profits.
The World Jewellery Confederation
Gemstones, diamonds and pearls all have official terms, which are listed here. You’ll also find info on VAT and duty for importing.
3. Arrange your finances
You don’t need to be rich to become a jeweller – talent and dedication are more important.
The main thing to think about is your approach. Do you want to design first and then price afterwards? Or will you decide a budget and then work within it? Don’t worry if you’re not yet sure – it’s something to think about while you’re doing your training.
A cash flow forecast is also helpful. Not sure what this means? Your cash flow is the money that moves in and out of your business, usually over a 12-month period. By using certain tools, you can predict what this will be in the future.
You’ll need to consider things like estimated income, sales and general business expenses. As our students know, if you’ll need to invest in some equipment in two years’ time, it’s best to plan ahead and ensure you can pay for it.
4. Work out your profit margin
Get your profit margin right from the start and you’ve got a strong chance of success. There are six things you need to consider:
Always invest in the best quality materials – it’s the best way to build trust and a good reputation. Take time to find a supplier you can rely on. And don’t forget to include tools in your materials cost.
Making jewellery is highly skilled work, even if you’re not using fine metals or gems. Your time is precious and you deserve to make a fair profit. Consider outsourcing things like admin work to give you more time for creativity.
If you have a physical shop, you’ll need to include things like rent and utilities. Market stalls involve fees and display set-up. Websites often take a listing or monthly hosting fee.
Make sure you’re clear on the weight of your items and how much it costs to ship them to a given location. International shipping costs more, and higher-priced jewellery will need added insurance.
It costs nothing to set up an Instagram or Facebook page. Later, you might need to hire a professional – factor this into your cash flow forecast.
This can be challenging for some. Read on to find out how to do it …
5. Work out your pricing
It’s important to value yourself, and at the same time be realistic about what your customers are willing to pay.
There are literally hundreds of models you could use. A popular one is this:
- Take the cost of your materials (include things like packaging)
- Multiply it by four
- Add that figure to your labour cost (the time taken at your hourly rate)
- Work out 10% of that total – this is your overheads cost
- Add it to the labour and materials number – this gives you your base price
- Round it up
- Bingo – there’s your price
For example, imagine you’re making a lovely pair of earrings.
- Your jewellery materials cost £20, and your packaging costs £2, so your materials cost is £22.
- Multiplied by four makes that £88.
- The earrings take you two hours to make at £25 per hour, so your labour cost is £50.
- £88 + £50 = £138 (materials and labour costs total)
- £138 x 0.1 = £13.80 (your overhead cost)
- £138 + £13.80 = £151.80 (your base price)
- Round up to £152 – this is your price.
- You could also price it at £151.99 to follow convention.
It’s easy once you get the hang of it.
Found the above helpful? Need more details? Our Fundamentals course gives you the firmest possible foundation in making and selling jewellery. You’ll get step-by-step lessons, insider tips and expert feedback.
Set up an online shop
Online is where the jewellery sales action is – you can connect with customers from all over the world. You don’t need much money or internet skills to get started. All you need is a website to sell your wares.
You might have set up a website or blog before. If not, it’s very easy to do, especially with easy-to-use platforms such as Shopify, Wix and Squarespace. You might also want to consider Etsy, an invaluable hub for many independent creatives.
When it comes to marketing, social media is your best friend. Instagram is particularly helpful thanks to its visual focus and hashtags. Just make sure your photos make the grade. Facebook is also a great place to promote yourself. Both offer targeted advertising, too.
Make sure you keep up with your orders. You don’t want to send things out late, or discover you haven’t got enough metal or gemstones to finish your urgent job. Keep an eye on your packaging too – it’s easy to run low.
As an independent jeweller, you’ll be juggling different roles. One day you might be the designer, the next you’re the accountant or marketer. Think of it as having several different mindsets to choose from. Just make sure you using the right one.
Want to give yourself the best shot of jewellery success? Our Fundamentals course tells you everything you need to know.
As you start out, remember that you’re not alone. There are lots of places eager to support you. As well as our friendly community, there are specialist organisations offering expert advice you can rely on. Bookmark this page to keep the links to hand.
Everything you need to know about business taxes in the UK.
Jewellery Distributers Association of the United Kingdom
Set within the British Allied Trades Federation, this trade body supports businesses that wholesale, distribute, import and export jewellery – fine and fashion.
Association for Contemporary Jewellery
Find info on things like suppliers and advertising here. The association also offers training and regular events.
Keep up to date with marketing, manufacturing and industry news via this news body. It also has its own award scheme.
Everything you need to know about hallmarking. Apply to get your items hallmarked here.
Hallmarking Act 1973
Make sure you know this like the back of your hand.
British Independent Retailers Association
Not just for jeweller, BIRA offers general support to all kinds of retail businesses. If you’ve got a question, the answer will be here.
National Market Traders Federation
Thinking of setting up a stall? Discover over 1,100 UK sites where you can sell your jewellery.
The World Jewellery Confederation
Make sure you use the correct terminology for your gemstones, diamonds and pearls.
The Intellectual Property Office
As we said earlier, make sure you protect your IP. Your work is unique, and no-one should copy you.
You absolutely can make a profit from your jewellery, if you approach it in the right way. Effort is of course important – you need to sit down and learn all the skills. The key, though, is to work smart, so your hard work pays off.
On our Fundamentals course, you’ll discover everything you need to know about the creative and business aspect of jewellery. Every tutor you’ll meet has achieved real-world success in the jewellery industry, with work shown work in Vogue, Harpers Bazaar and London/Paris Fashions Weeks.