How to Start a Jewelry Making Business
Perhaps you couldn’t find that perfect piece of jewelry for sale in a store, or maybe you wanted to use your creativity and craft a bracelet featuring a unique medley of colors. Whatever the reason, if you’ve tried and enjoyed making jewelry, you might be looking at the beginning of an exciting business. Starting a jewelry making business of your own will allow you to share your talents and ideas with others, and it’s even a business that you can start up as a hobby in your spare time, right out of your home.
Business Overview
Jewelry making businesses put creativity and an eye for design and craftsmanship to create unique jewelry pieces and lines. Jewelry makers may work with many different mediums, including precious metals and stones and more affordable supplies that can be found at local bead and craft shops. With jewelry available at many different price points, a jewelry maker can start with more affordable materials before progressing to higher-end jewelry and supplies.
A talented jewelry designer can build up a loyal customer base with effective marketing. Many handmade jewelry makers sell their products directly to consumers through venues like craft fairs and online platforms like Etsy, or even their own online store. Some jewelry makers may choose to wholesale their products to retailers, allowing them to focus entirely on production instead of customer sales.
The jewelry making industry is highly competitive, so fashion jewelry designers need to be creative and innovative in creating pieces that stand out. Market research plays a role in this, though it’s also important for a business owner to create pieces that they like themselves. An awareness of trends and the ability to anticipate which trends will become highly popular can help a business owner to create pieces that will be in demand.
Industry Summary
According to IBIS World, the jewelry manufacturing industry experienced a 3.2% decline from 2015 to 2020. As of 2020, the jewelry manufacturing market was a $7 billion market, with 1,873 businesses in operation. Those businesses employed 22,341 staff. The industry’s decline was closely correlated with increasing gold prices. As gold prices and demand increase, some customers are priced out of the market, leading to a decline in sales for manufacturers.
IBIS World predicts that the industry will experience marginal growth from 2020 to 2025. Weakened gold prices will partially contribute to the industry’s growth. Gold is predicted to fall in price throughout most of that five-year period, suggesting that the market will recover and start to grow again.
Tiffany & Co., Jostens, Inc., and Richline Group, Inc. own the largest share of the market, but there’s also plenty of opportunity for smaller, independent jewelry makers.
Industry Trends
The jewelry making industry is subjected to many different jewelry trends, including the types of jewelry and materials that are most popular at any time. Even how consumers are buying jewelry is evolving. According to Matter of Form, consumers shop for jewelry online more often. Thanks to increased confidence, they’re more likely to purchase high-ticket items online than they were five years previously. Specialist jewelers and brands need to work harder to stand out from the competition, especially with reduced foot traffic to stores.
Customization and commissions have increased in popularity. Many consumers have begun repurposing family heirloom jewelry, having the pieces reworked into meaningful pieces. Other buyers want to design a brand-new piece to have something unique and one-of-a-kind.
The demi-fine jewelry category has also grown in recent years. Lying between costume jewelry and fine jewelry, this category is more accessible because it doesn’t carry the high price of fine jewelry. Demi-fine pieces are made with precious metals and precious or semi-precious stones and reflect contemporary jewelry design trends. Demi-fine pieces are ideal for the e-commerce industry, and these entry-level pieces can serve as a connection point for stores to bring in new customers.
According to Eluxe Magazine, sustainability is increasingly important to jewelry buyers. Natural materials including shell, stone, glass, straw, and wood are becoming highly popular, and in some cases, they’re replacing gems and metals. These more natural materials are seen in shelled anklets, chunky wood bangles, stacked organic bracelets, raffia earrings, macrame earrings, and more. Repurposing old costume jewelry has also become popular, and some companies are using reclaimed gold chains to create new pieces.
With more people being aware of blood diamonds and some of the ethical issues that come with some diamonds, consumers are increasingly seeking out ethical diamonds. Lab-grown diamonds offer a practical alternative, and customers have the satisfaction of knowing exactly where those diamonds came from.
Target Market
A jewelry making business’ target market will largely depend on the business’ specialization. A business that creates eco-friendly pieces from upcycled materials might market to eco-conscious consumers. A higher-end fine jewelry business will market to a different demographic. While women wear most jewelry, men often buy jewelry as gifts so that most businesses will market to both men and women.
Skills, Experience, and Education
A jewelry making business owner doesn’t need a business degree to get started, but certain skills and experiences are valuable and helpful in the jewelry industry.
Experience making jewelry. Some knowledge of and experience in jewelry making will be important when running this type of business. If a business owner doesn’t have the experience, then finding a jewelry maker who can mentor and guide them is a wise strategy.
Knowledge of current trends. The jewelry industry is highly affected by fashion trends. A knowledge of which types of jewelry and materials are currently in demand can help a business develop products that stand a greater chance of selling.
Design skills. Aesthetic awareness and design skills are important. A jewelry maker needs to be able to identify pleasing designs and color choices that look great together.
Attention to detail. Detail work is everywhere when making and selling jewelry. An eye for detail and the patience to ensure that every piece is well-finished will help build a jewelry maker’s reputation.
Customer service skills. Whether a jewelry maker sells wholesale to stores or engages with customers directly, strong customer service skills are important.
Creativity. There’s plenty of competition from other jewelry makers. A business owner needs plenty of creativity to come up with unique pieces that will stand out from others.
Checklist for Starting a Jewelry Making Business
Starting a jewelry making business can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1:Â Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Â Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2:Â Name the Business
Finding the perfect business name for a jewelry making business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
You can file for protection of your business name, logo, or designs through the United States Patent and Trademark Office (USPTO) to keep others from using them.
Step 3:Â Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a jewelry making business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
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Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Step 4:Â Select your Location
Most jewelry making businesses can be started out of a spare room in the home, saving on rental costs. As the business grows, it may be time to move into a manufacturing space or brick and mortar store. Rental costs will depend on factors like location, available amenities, whether the space can double as a retail storefront, and the size of the space.
If the space will serve both as a manufacturing location and as a retail location, its location becomes important. A store in a high-traffic retail area can bring invaluable walk-in traffic, but it can also carry higher rental costs.
Related:Â Choosing a business location
Step 5: Register for Business Licenses and Permits
A jewelry making business owner will need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located.
Some of the common local, state, and federal registrations a jewelry-making business will need to include a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.
Related:Â Common business licenses, permits, and registrations by state
Step 6:Â Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a jewelry making business is another. Â To get a small business loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
Related:Â Finding the money to start a business
Step 7:Â Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
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Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8:Â Get your Marketing Plan in Place
Jewelry makers will need to actively market their pieces. If a jewelry maker’s goal is to wholesale to retailers, this marketing might take the form of networking with business owners, attending industry events and trade shows, creating promotional materials, and visiting businesses. If the jewelry maker sells directly to consumers online or online marketplaces like Amazon or Etsy, then marketing might involve hiring a professional photographer to take high-quality product photos is essential.
Other marketing activities may involve creating a website, establishing an active social media presence on Facebook, Twitter, Instagram, Pinterest, and Youtube, and going to events like craft fairs.
Related:Â Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a jewelry making business. A few of these include:
– General liability insurance protects the business against expenses that could occur if a customer ever falls or is injured while on the business’ property.
– Commercial property insurance helps cover expenses that the business might face if the building or its inventory is destroyed or damaged in an event like a fire. Especially important when operating out of the home since most homeowner’s policies won’t cover losses from business activity.
– Worker’s comp insurance helps to cover expenses that a business might face if an employee were ever hurt while on the job.
The cost of insurance policies varies depending on the business’ size, location, the value of its supplies and inventory, and even the number of employees on staff. It’s best to request quotes from multiple providers to get the most accurate idea of what to budget for insurance. When comparing the quotes, consider factors like plan exclusions, coverage limitations, deductibles, and the differences between premiums.
Related:Â Common types of business insurance
Step 10: Hire Employees
Many jewelry makers start and run their own businesses without hiring staff. If the business grows to the point where the owner can’t keep up with the demand, it may be time to hire staff. According to PayScale, jewelry makers earn an average of $15 per hour, though pay rates can range from $10.48 to $22.50 per hour.
Staff salaries are just one of the expenses that come with hiring employees. A business will also need to include expenses like workman’s comp insurance, unemployment insurance, and paid time off in its budget.
Related:Â Hiring your first employee
Step 11:Â Set up an Accounting System
Setting up an accounting system for your jewelry business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
StartingYourBusiness.comHow much does it cost to start a jewelry making business?
The cost to start a jewelry making business will vary significantly depending on the type of jewelry the business will create. Working with materials like woods and some more common gems and stones can be affordable. Working with precious metals and precious stones will require much greater startup funds. It’s possible to start this type of business out of a spare room in the home, saving on rental costs and minimizing startup costs.
Plan to spend $300 to start a basic business working with jewelry crafting supplies. Businesses involving mold development and fine metals can cost $30,000 or more to start.
Some common startup costs for a jewelry making business include:
– Jewelry making equipment and tools
– Inventory of raw materials
– Jewelry boxes and packaging
– Photography equipment
– Website
How much money can you make with a jewelry making business?
A jewelry making business’ profits can vary dramatically depending on factors like the business’ niche, competitors, profit margins, location, and more. A business owner can maximize profits by performing thorough market research, developing a unique but highly appealing concept, and carefully pricing out pieces to maximize profit margins. Effective marketing also plays an important role, especially when building awareness of a new business.
Are there grants to start a jewelry making business?
It’s extremely rare to find a grant to start a jewelry making business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a jewelry making business?
The NAICS code for a jewelry making business is 339910, which is classified under Jewelry and Silverware Manufacturing.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Resources:
Accredited Gemologists Association
American Gem Society
American Gem Trade Association
American Jewelers Association
Fashion Jewelry and Accessories Trade Association
Independent Jewelers Organization
Jewelers of America
Manufacturing Jewelers & Suppliers of America
Society of American Silversmiths
Women’s Jewelry Association
