How to start a jewellery business
Do you aspire to create the next Tiffany & Co.? From hallmarks to market opportunities, we look at what it takes to launch a successful jewellery firm
Key things to think about when starting a jewellery business are:
What is a jewellery business and who is it suited to?
The jewellery industry
It may be a competitive industry, but jewellery remains an incredibly popular market to start a business in. According to a report from business intelligence group Key Note the industry didn't falter during the recession, experienced consistent growth in the last five years and jumped 3.4% in 2014.
It's also a business that enables designers and artists with entrepreneurial instincts to utilise their creativity and craftsmanship to make a name for themselves in the world of fashion and accessories. It can be a perfect venture to start part-time as many jewellery firms can be launched on a relatively low budget. Moreover, there’s an enticingly broad range of options when it comes to creating a jewellery brand. Jewellery products tend to fall into one of the following product types: fine, custom, costume, or handmade jewellery, for example, as well as a variety of potential market options from affordable, market-stall and high-street to luxury and couture jewellery.
However, as the saying goes, not all that glitters is gold; jewellery is an industry that takes a considerable amount of planning and work to make it a success. As well as the creative aspect, from designing a line to creating a brand, a jewellery business comes with certain industry-specific regulations, significant competition, and cashflow issues to consider. It's also not always a lucrative business unless you manage to secure a line in some of the large retail outlets and jewellery houses.
If you plan to grow your jewellery dream into a sustainable business, it will takes commitment and preparation – from studying your target market to learning every bit you can about your product.
What does it take to be a jewellery designer?
While you will need a creative flair and a knowledge of design, you must be organised and think with the business in mind to make it as a jewellery designer. Tom Blake from Keep Me Jewellery, which is a sterling silver jewellery line that comes with 3D printed collectable characters, explains: “If you are a designer and maker, you have to be business minded at all times. Designing and making your jewellery collection is the fun part but you need to design things that are cost effective and profitable. Then you need to work hard to sell it.”
Organisation and persistence are something Sacha Jacobsen, who runs an art- and location-inspired handmade jewellery company Sacha Jacobsen Designs, emphasises: “You need to be very organised, you can't run out of boxes when you have orders to get sent out! I feel that through trial and error, you find your balance with getting stock levels right, but it's not easy at first. You can overspend and have too much, or underspend and run short!”
The balance between the business owner (often working with tight resources) and creator means that entrepreneurs need to have the ability to juggle many different roles under pressure. Jacobsen says: “Sometimes there just isn't enough hours in the day to keep up with all the orders and requests people have… you have to do everything yourself when you start, not just the fun making bit. You have to do the accounts, the ordering, the taking out of the bins!” So don't expect it to be all glamour and creativity.
Finally, an aspiring jewellery designer must be a good communicator and a people person as you will have to work with a range of people every day, from customers and suppliers to shop owners and staff. Being able to manage a team, handle supply issues and keep customers happy is vital to success.
How do I create a business plan for a jewellery business?
As previously mentioned the jewellery business is one that entails a significant amount of planning and research. From the outset, you should try to decide who your customer is, how you plan to target them, your price point, location and start-up costs. You must also decide what type of business you want to be – do you plan to manufacture abroad or remain in Britain? Fine or fashion jewellery?
Try to have a clear business strategy laid out before launching and consider your start-up's future, as growth will hugely affect the way you produce your products. For instance, you can launch with a relatively small investment but if you start to grow you will have to hire staff, buy more materials and create an appropriate production workshop (either at your home or move to a new location). So if your plan is to scale your business, it's important that you consider the long-term logistics that will come with that growth.
Where the opportunity lies: From designer to handmade jewellery
With regard to what type of jewellery to make, fine jewellery (pieces made from precious metals, gems and pearls) accounts for a greater proportion of all jewellery sales in terms of value. However, a fine jewellery business will entail a significant amount of start-up finance – gems are expensive – and much of the precious jewels and metals industry is shrouded in controversy due to the exploitation of people working in mines in developing countries. So you must do your research.
Additionally, fine jewellery has increased at a slower rate than costume and fashion jewellery sales as consumers favour low-cost but beautiful pieces. Industry experts note a blurring of lines between the fashion and fine jewellery sector, with more entrepreneurs launching cheap alternatives to finer designs. Lynn Snead from industry body Jewellery Distributors' Association (JDA) admits that “most of my members are now on the fashion (non-precious) metal side”.
Also, consider where the market is and if you have a viable means to get to it. Tom Blake says that figuring out where the money is before going after it is vital: “I think one of the most important things to consider very early on are your numbers – can you actually make money? Also, assess the competition and be realistic about where your products will fit into an extremely competitive market.”
Sacha Jacobsen also advises aspiring start-ups to consider their market to ensure they offer unique jewellery. She says companies must ask themselves: “What's your unique selling point?” and be aware of what the competition is doing – for her it's mixing the designs she loves with the personalisation that her clients love.
Get your finances in place
Like any product business, it's essential to do your cashflow forecast when preparing to launch a jewellery business as you need to understand what materials, location, order numbers and staff you can afford and if you need investment to get off the ground. A cashflow forecast will also help you to highlight danger areas so you plan ahead for seasonal highs and lows.
Another key part of getting your start-up's finances in order is pricing your work. Some jewellery designers decide how much they want their work to cost and produce their products based on that. Others design first and then price it afterwards.
Regardless of which way you go, pricing is never easy and while there is a system to help which takes in material cost, work hours (don't forget to factor in the hours you put into creating a piece) and general business costs – you must remember to be pragmatic. Look at competitors and see what they are charging. Also consider how you want to be conceived, cheap is not always best so think of your brand too.
What is the best way for a jewellery business to reach the market?
Choosing the type of jewellery you wish to make will help with two other factors in your pre-launch plan – who your customers are and where to sell your products. The number of options available is extensive, from online to retailers to market stalls. The National Market Traders Federation lists more than 1,100 markets where you can sell wares around the UK.
You can choose one or do a combination of these but there are variables to consider. Launching on a stall in a high footfall market is a great way to get your product selling immediately and to build up a consumer base and following. It offers the opportunity to talk directly to the customers and to find out what they like, to observe how they select pieces, and to tell your particular story or ethos.
This will in turn make moving into a physical shop front – a considerable investment – much easier. Selling your jewellery at a pop-up is another less financially draining way of starting out. Check out pop-ups that allow other businesses to feature their wares, and have a look at marketplaces such as Startups 100 member Appear Here or We Are Pop-up, which both connect business owners with short-term retail space.
If you decide to start selling your jewellery with a market stall then look into the right type of market for your customer as there's a multitude of other factors to take into account, including average visitor numbers, other traders present, and the demographic of customer that will attend. Try to attend the market as a consumer before committing to it.
Get your jewellery firm online
Regardless of what type of jewellery business you decide to launch, it's important that you consider getting online. A report by Inside Online found that jewellery related search terms have witnessed a year-on-year increase, meaning that more customers are going online to find and buy their jewellery.
Setting up a website is now a relatively low cost endeavour with sites such as WordPress enabling people with minimal skills to set up. And social media – particularly Facebook, Twitter and Instagram, and Pinterest, which all offer image-based platforms with millions of users – is a great way to promote your products and build relationships with prospective customers. Be creative and personal, and check out at what other jewellery are doing for some ideas.
Your website's look is key so make sure you use high-resolution images for all your products.
Another way of getting online is by connecting with other online marketplaces such as Etsy and Notonthehighstreet (NOTHS), which both specialise in independent and unique products and are a great resource for any start-up jewellery designer looking to get their product to market.
Sarah Jacobsen runs her business exclusively via online marketplaces and says: “I don't need a surplus of pre-made items to take to fairs and shows like other jewellers do. The beauty of doing it all online is you only need one of each product to get a great photo of and start selling straight away.”
How much does it cost to start your own jewellery business and how much can you earn?
The cost of starting a jewellery business
The great thing about launching a jewellery business is that it can be started on a relatively low budget. The cost of equipment and tools will depend on what type of jewellery business you launch link to that site with the tools. As Tom Daly says: “This [cost] varies considerably and depends on what area of the jewellery market you are aiming at. You can start things off very cheaply at the lower end i.e. costume jewellery but at the higher end there are larger costs that are unavoidable due to the price of precious metals, gemstones and labour costs.”
Where you manufacture will also determine cost; for instance if you decide to mass produce then outsourcing in overseas countries may cut overheads. However, it can also mean compromising on the ethics or quality of your product. Producing your product in the UK could lead to higher labour costs but it will also mean that you can monitor production more carefully, boost the ethical status of your brand and make use of the valuable ‘Made in Britain’ stamp.
Costs will also depend on where you sell your products as market stall prices can vary and if you decide to set up a shop you will have to take into account the cost of premises. Sacha Jacobsen, says: “If you get to a point where you need more than your kitchen table then the rent adds up. I would say that to set up my business, I probably initially spent about £400-500 in total, that's including all the tools, the materials and the equipment to take the photos.”
The potential earnings of a jewellery designer
Potential earnings will largely depend on what you choose to create, as Tom Blake explains: “This varies from a few extra pounds from selling items in your spare time to friends and family or earning substantially more by having your jewellery mass produced and supplying high street shops.”
As a whole, small jewellery businesses don't usually make huge profits. According to Key Note and the Office of National Statistics' UK Business: Activity, Size and Location report, there were over a thousand UK businesses engaged in the manufacture of jewellery, and around 70% of both fine and fashion jewellery had a turnover of less than £250,000.
What are the rules and regulations you need to know when launching a jewellery business?
While starting a jewellery business can be done quite affordably, it does take background research and there are some regulations that you must follow.
Whether you are launching a shop or a stall, you will need a licence from your local council. Councils vary in terms of their requirements but you usually have to pay a small fee. You may also have to pay business rates, which depend on location and size so make sure you get in contact with your local authority before taking any steps forward.
There are also a few business owner taxes to be aware of. For instance, as a self-employed individual you will have to complete a self-assessment within three months of trading and then a tax return assessment at the end of each year – you’ll need to do this is through the HM Revenue & Customs (HMRC) website. You will also have to pay National Insurance contributions, also to the HMRC, so check out its website for information on both.
Two other pieces of legislation to be aware of when selling your jewellery (or any merchandise) are the Trade Descriptions Act (TDA) and the Sale of Goods Act (SGA). Both acts are pretty straightforward and are in place to protect customers. TDA means that traders cannot sell any counterfeit goods or make false claims about a product. The SGA is there to make sure that what you sell is fit for purpose and of an acceptable quality – if it is not, you are obliged to either exchange the goods, give a credit note or a cash refund.
If you're working with precious metals then you will have to get your work hallmarked. The Hallmarking Act 1973 makes up the bulk of modern UK law regarding the assaying and hallmarking of metals.
Any business transactions involving unmarked metals are illegal. Metals are tested and, if they meet a certain minimum purity requirement, are marked with a specified seal. This is carried out by an Assay Office, which are located throughout the UK.
Sarah Jacobsen, who customises her jewellery, says that she gets her metals Hallmarked beforehand to speed up the process. Alternatively you could only buy metals that have been hallmarked already, which is what Marie Allen – founder of the Marie Allen Boutique that specialises in sustainable and handmade jewellery – does: “We assemble jewellery and do not make it like silversmiths would. Therefore, we can buy in components that are already hallmarked if they need to be.”
Another regulation to be aware of if working with certain types of metals and chemicals, such as nickel, cadmium, lead and Chrome 6, is Registration, Evaluation, Authorisation & restriction of CHemicals (REACH).
This is a European Union regulation and was created to protect human health and the environment from the use of chemicals. For more information on REACH chemicals and the registration process, check out the Health and Safety Executive here.
JDA’s Lynn Snead advises fine jewellery designers to visit The World Jewellery Confederation (CIBJO) website, which has books covering the nomenclature (terms or names that should be used) for gemstones, diamonds and pearls and, if importing, the duty and VAT rules.
Finally, jewellery business owners must also think about Intellectual Property (IP) and protecting your business idea. “The most troublesome area of the jewellery industry is plagiarism,” says Tom Blake. “Do everything you can to protect your designs.”
With regard to protecting his designs, Tom has registered all his designs with the Intellectual Property Office and the brand Keep Me Jewellery is a registered trademark. He has also registered with ACID (Anti Copying In Design) and with the British Jewellers Association. Daly says: “I have catalogued everything from day one but this is ongoing and I am currently working on strengthening my IP further.”
Tips and Useful contacts
Do your research and try to think of the market when you're designing
While it's important to focus on having a unique design, your product must also be commercial and affordable. Tom Blake reiterates: “The jewellery business is incredibly competitive and it's not just about having great jewellery – it's about how you are going to get people to buy it.”
Always try to improve and change things
Sarah Jacobsen says that part of her success is because she's always working on her product: “I am never fully satisfied with my storefront. I like to keep developing new products and am always trying to make the photos even better. It's taken me a long time to get them where they currently are but I would still like to make tweaks and changes.”
Stay in contact with your customers
From updating them on recent achievements to sending invites to shows and events that you will be exhibiting at, keeping in contact with your customers will remind them that you are there and can help lead to repeat buys or recommendations.
Check out the competition
Looking at what your competitors are doing will help you decide upon a price and how you are going to distinguish yourself from them. Observing the competition will also help you to identify market opportunities, and how to advertise and attract customers.
Pick the right markets
Do your research before launching a market stall, taking into account price range, the profile of visitors and shoppers and what other stalls are offering. This is especially important if you're exhibiting on a stall that involves a hefty fee.
From marketing your business to accessing your customers; starting a business online has never been easier or more affordable. Make sure you get the images right and utilise your online presence to keep in contact with your customers.
Try to launch your business with minimal investment and generate a following first, this way you'll become known for a particular style and will be able to figure out what sells and what doesn't. Don't compromise on quality but quantity: create one line first, target specific markets and don't jump to hire staff and buy lots of materials you may never use.
Grow your range and offering as your business’ revenue rises.
Retail Jeweller: This is a jewellery news body that provides market, manufacturing and general information as well as industry specific news. It also runs its own awards scheme.
Assay Office: This is where you can get all the information you need for hallmarking as well as apply to get your materials hallmarked.
Cooksongold: Is a marketplace that provides access to material and equipment supplier. It also offers technical information for jewellers.
Association for Contemporary Jewellery (ACJ): Offers advice on suppliers, where to advertise, and the organisation holds events and supplies training courses.
British Independent Retailers Association (bira): This is a general association for all independent traders but is a great place to get general retail advice, support and contacts.
Jewellery Distributors' Association (JDA): This is a trade body within the British Allied Trades Federation that specialises in supporting firms that wholesale, distribute, import and export precious and fashion jewellery