Real-life cases teach you how to start a jewelry business
Hisuper HernándezShare
Many people buy wholesale jewelry from China and make huge profits. In today's post, I'll show you two real-life cases that demonstrate how profitable fashion jewelry can be, as well as four key tips to help you start your own jewelry business.
If you're already in the jewelry business, or planning to start, trust me, you'll find this post super helpful.
- Two real-life cases reveal the secrets of high-profit jewelry (actual factory cost in China).
* Top 4 Reasons Why Jewelry Is Good for a Startup Business.
* Buy jewelry wholesale instead of dropshipping.
* Explore three main types of jewelry and see which ones make you big profits.
* How to wholesale jewelry and create your own brand?
* Sell your jewelry for a decent profit.
Reveal the secrets of the most profitable jewels ( 2 real cases )
Those just starting their jewelry business might consider purchasing from domestic wholesale websites or using dropshipping to test products instead of importing them directly from China. But if you want your jewelry business to be long-term, you need to focus on the core business: how to source products at the lowest cost.
Over the years, some of my clients have successfully created their own jewelry brands. So, I'll share two real-life stories from my clients that I don't think anyone else will share. This will give you an idea of how much wholesale jewelry from China costs and what the profit margins are.
Do you know Pandora? Well, I'm not going to talk about the history of its development, but rather the story of 2010, when many Chinese factories helped their customers make Pandora knockoffs. They resembled Pandora jewelry in style and material, and were even identical. Now, let's guess the price of these knockoffs. The S925 and cubic zirconia snake bracelets seen in the photos below cost no more than $20!
On Pandora's online marketplace, similar styles sell for between $70 and $100. Many importers copied and innovated Pandora's designs and sold them at low prices. Before 2016, entrepreneurs around the world were making a lot of money from the jewelry business.
My European client, Anna, is one of them. She didn't want to go into the jewelry business at first, but she easily made $90,000 in one year by trying.
And the cost of these charms and pendants combined with bracelets will be lower, between $4 and $10. I think this can help you better understand their profit margins.
Many girls choose four or five charms for their bracelets. I was thrilled to be able to sell three bracelets and 18 charms a day when I was starting out in the jewelry business. These charms sell for $30 to $60 on Pandora's website, while my retail price is only $18 to $30," Anna said.
In fact, the cost of jewelry depends on the materials and the complexity of its craftsmanship. These charms are primarily made of 925 silver or inlaid with cubic zirconia, and some are made of 10-karat gold and rose gold. Therefore, their cost is not high, as they do not require overly complex craftsmanship.
As I mentioned earlier, 2016 is a key moment. In China, between the second half of 2015 and 2016, imitations were severely affected. Therefore, few factories now rely exclusively on imitations, and most have transformed into their own brands. But what I want to emphasize is that, once the jewelry business gets going, it can be truly profitable.
Another of my clients is Declan, a young American with a lot of ideas. He loves hip hop and struggles to buy modern hip hop jewelry, either in physical stores or online. His fellow hip hop fans feel the same way.
By chance, I came across this guy's post on Facebook. After we met, he told me about getting into jewelry, and I told him he could ask my factory to help him customize his design. After all, it's very easy for us to make a sample for him. And once his ideas were realized, we could become business partners.
We have manufactured all of the styles mentioned well in advance (the current style cannot be disclosed to protect customer privacy). Optional materials include S925, copper, karat gold, imitation gold, and zircons of different grades, so the price range is very wide, from $6.50 to $50. I regret that I cannot offer a specific price quote here, but if you would like one, please feel free to contact us .
Depending on the market, my clients sell products in their countries for three to five times the actual price. Declan told me that because the price is 10% to 20% lower than Alibaba's, the styles they customize and can't find on the market are selling for up to 5.5 times the price.
Good. Now you've probably understood how profitable the jewelry business is. Fortunately, jewelry is good for startups. Why? Let's move on to the next part.
Top 4 Reasons Why Jewelry Is Good for a Startup Business
You've probably been interested in the jewelry business. Starting one isn't as difficult as you might imagine. The two previous examples illustrate this. Compared to other specialized businesses, there are four main reasons to choose fashion jewelry.
Great leads and easy return visits
The majority of jewelry consumers are women, and as we know, they tend to consume on impulse. If your jewelry design is innovative and attractive, you'll attract a large number of potential customers who will return for a long time.
For a woman, there may not be a specific reason to buy accessories. Perhaps it's for Valentine's Day, a party, or even a date.
Small size, high value and convenient carrying.
What does small size mean? It means more can fit into a fixed-size box. Furthermore, fashion jewelry is not only small, but also lightweight and high-value. Therefore, freight represents only a small portion of the total value of your products (air freight is generally used for high-value items in small quantities).
It is not easy to have quality problems.
Unlike some electronic products, the likelihood of defects is high if a thorough functional inspection is not performed. Furthermore, fragile products can suffer various damages during shipping.
While the performance and appearance of fashion jewelry are easy to spot, its defect rate is typically not high. Furthermore, thanks to its small size, you may only need to pack the items in a single box, making it virtually impossible for them to be damaged.
Easy to develop your own brand and make high profits.
As mentioned above, fashion jewelry is related to fashion and aesthetics. If you have a strong design style, establish your own brand, and custom-brand your products in China, your profit margin can be very high.
Buy jewelry wholesale instead of dropshipping
Many of my clients start their business with dropshipping, a popular option among small online businesses: they don't need to store the merchandise, which means the initial investment is lower. They just need to sell the products, and someone will take care of shipping them to their customers.
But over time, three shortcomings of dropshipping will gradually become apparent.
- Product style integration. While you sell certain styles of jewelry, others sell products of the same style.
- High costs reduce your profit margin. Since you invest little and take little risk, you can't earn much. And this applies to all businesses.
- You can't control the quality of dropshipping products. Most dropshipping companies are middlemen and purchase products from different factories. Therefore, product quality varies each time, which can lead to customer loss.
We have a client who does business on Amazon. Initially, she opted for dropshipping to ship her products. However, one day, she received three negative reviews complaining that the products didn't match the image and that they considered her dishonest.
You know, Amazon's rating system takes product reviews into account. Even if you sell at a low price or spend a lot of money on advertising, if your review rating is lower than 4.0 (out of 5 stars), your ranking will drop. If there are too many negative reviews, your product will be forced off the shelves. So my client had to give up on that product. What a shame!
So, if you want to be successful in the fashion jewelry business long-term and earn a good profit margin, you must develop innovative designs and gradually build your own brand. Selling wholesale from Chinese factories and customizing exquisite packaging to enhance the quality of your products are things dropshipping can't achieve.
Regarding wholesale from China, let's take the Chinese B2B website Alibaba as an example. Let's analyze the price of popular costume jewelry in recent years. I'm not referring to cheap jewelry that costs just a few cents, but to everyday jewelry. These jewelry are primarily made of S925 sterling silver, 1,000-karat gold, and cubic zirconia, with prices ranging from $25 to $200.
As the following brief style:
These styles can sell for at least three times the retail price. The price in the images is listed on Alibaba, and the factory price will be at least 5-10% cheaper. There are factories and trading companies on Alibaba, so prices vary considerably. You should confirm the materials, details, and other parameters of your products before inquiring and comparing.
Understand the 3 main types of jewelry before buying wholesale.
The jewelry category can be very broad and complex, and it can be difficult to choose the best one. Don't worry, thanks to our team's many years of experience, we've divided it into three main categories based on material, so you'll be clear.
Type 1
Zinc alloy/copper/S925+ plating + zircon inlay: micro-pave jewelry (regular cost: $3-$40)
Zinc/copper/gold alloy over 100 carats + zircon: 14K and 18K jewelry (usually $3-$40)
Acrylic/Resin/Cheap materials like stainless steel: Promotional/cheap jewelry (costs a few cents)
The first and second types are the ones I recommend most. Why?
Let's first analyze it from the consumer's perspective. Many women are willing to pay for good design or quality. The style and price of these two types of jewelry fall between the third, more affordable type and authentic jewelry, which is more affordable. Therefore, women are more willing to pay for them.
Furthermore, both types of jewelry can be wholesaled from China with a low minimum order quantity. Furthermore, these fashionable pieces of jewelry are of high quality. It's easy for consumers to spend $10 more for a modern style and high-end packaging.
Some entrepreneurs involved in the third type of jewelry often purchase large quantities directly from the factory at a very low price. Otherwise, they find it difficult to compete on price. Another case is that someone buys these inexpensive pieces of jewelry as promotional items and can accept a relatively high price with a lower minimum order.
How to wholesale jewelry and create your own brand?
After determining what type of jewelry to handle, the next step is to find reliable factories to wholesale from.
Step 1: Find suitable jewelry suppliers in the following 3 ways.
For most importers, the best option is to search for suppliers on wholesale websites. The most commonly used Chinese wholesale websites are Alibaba, Dhgate, and AliExpress.
If you can come to China, visiting wholesale jewelry markets is also a good option. I recommend two of them.
Mid-range and high-end jewelry store: Xijiao Building, Zhanqian Rd, Guangzhou
Mid- and low-end jewelry: Yiwu International Trade City, Yiwu
If you're planning to visit Yiwu, here's a complete Yiwu guide for you, including everything you need to know about Yiwu, such as Yiwu markets, trade fairs, hotels, entertainment, and more. Don't miss it!
Visiting jewelry fairs will provide you with a wealth of inspiration for your designs. And you're likely to find renowned manufacturers there. I've selected some famous and large-scale fairs that are worth visiting.
Canton Fair, Guangzhou, China
Hong Kong Jewelry and Gem Fair, Hong Kong, China
JCK Las Vegas, Las Vegas, United States
Inhorgenta Munich, Munich, German
Dubai International Jewelry, Dubai, United Arab Emirates
To learn about these ways to find reliable suppliers, you can read another article for a more in-depth study.
Step 2: Purchase existing designs or customize your own designs
If you choose existing designs, prices can sometimes be lower than those for customization. And it won't take long to receive your products. However, this also means you'll only be able to select designs from one or two suppliers, even if they don't meet all your style requirements.
Customization will undoubtedly cost more, both in money and time. The minimum order will also be higher than for existing styles, perhaps around 200 pieces per style and color. You'll also have to pay additional tooling costs if you don't have a mold for your design.
If you have your own custom manuscript, you can submit it directly to the factory. Otherwise, the factory will provide you with a selection of materials based on your desired style and confirm the details and parameters with you.
Step 3: Private Label for Your Own Jewelry Brand
Logo carving and labeling
This is a way to significantly improve brand awareness of your products. If you only buy existing styles and don't have your own brand, your products will be difficult for consumers to remember. Because the manufacturer will also sell them to third parties, your products won't stand out and will hardly be able to stand out.
Private labeling is universal for any business; you can find more information about it in my other posts:
- Find private label manufacturers and suppliers for small businesses.
How to Choose the Right White Label Products for Small Businesses (14 Examples)
The 47 best white label products to sell and make a lot of money
Unique packaging
In fact, I can say that fashion jewelry is a business that sells beauty. Therefore, in addition to the design of the jewelry itself, its packaging is also critical. Exquisite and distinctive packaging can make consumers feel that the jewelry they purchased is worth the money.
Remember the girl Anna I mentioned earlier? Although she sells Pandora knockoffs , she also uses exquisite boxes, making her customers feel like she's no worse than the original.
In our daily lives, we see many types of jewelry packaging. They are mainly divided into two categories: bags and boxes.
The cost of packaging is very low. The simplest option is to use a small plastic or string bag, which is usually sold by the pack or by weight and can cost around 1 cent per unit. The most affordable jewelry uses this type of simple packaging. A common flannel or brown paper bag also costs only about $0.10.
There are many types of packaging boxes, so I won't list them one by one, but simply divide them into two categories.
A cheaper option : kraft box, Villi box.
Mid-range and high-end: wooden box, leather box.
Sell your fashion jewelry for a decent profit
Getting a low price is key. Next, the most important thing is how to sell your jewelry. You can sell both online and offline, or specialize in online marketing. The main online e-commerce platforms are:
- Amazon
- eBay
- Create a website on Google
Amazon
Amazon has significant traffic in the US and European markets. The platform's A9 algorithm is increasingly advanced, and it's an e-commerce and retail platform that prioritizes user experience. Therefore, there's no longer a need to deploy a large number of products.
In recent years, small businesses have gained an advantage by developing product segments to avoid monopolistic competition from larger sellers. Therefore, if you want to sell jewelry on Amazon, don't randomly sample products; choose carefully, analyze price and market trends, and choose the best jewelry category.
eBay
Products on eBay are cheaper, so price competition will be quite competitive. If you get a low enough price from the manufacturers, you can try buying on eBay.
Create a website on Google
Setting up stores on Google is also a good option, but there's a lot to learn, such as creating a website. Will you use Shopify, WordPress, or develop it yourself? The initial web development costs can be considerable. Unlike operating on Amazon, you need to learn SEO, advertising, and social media marketing. This requires patience and money. It's generally not very suitable for beginners.
Now it's your turn!
If you have any questions about fashion jewelry, welcome to leave your comments below.
