You need to find suppliers of unique jewellery. It's not easy, and it may involve checking out twenty different suppliers, but this is the key to success as a jewellery retailer and cannot be overstated. Nobody wants to be one of a crowd. Every woman wants to be unique.
Be different. If you're selling at a craft fair with ten other jewellery sellers, you'll get nowhere if you are selling the same or similar items. If you own a shop, your competitors should be scratching their heads over where you find your wonderful jewellery.
If you buy from the cheapest end of a supplier's catalogue, you will never be able to command high prices. Your jewellery will be cheap and tacky. And no woman wants cheap and tacky jewellery. Buy fifty expensive items, not two hundred cheap items. Sourcing from the dregs of catalogues out of a misguided belief that cheap is good is one of the most common mistakes made by jewellery businesses, and it's one of the mistakes that is the most difficult for retailers to spot and correct.
You need to be bringing in fresh lines every couple of months. If you don't, you will never attract repeat customers. Your best customers should be coming to see you every week, not twice a year.
Fashions change, and so should your jewellery. No matter how good a seller a necklace was last year, the New Year should bring new styles. This is a common mistake - the idea that you should sell items until every possible customer has bought one. Scarcity is great for pushing up profits. Regular customers are rewarded by owning items that their friends cannot buy, and you become known as the jewellers to go to if you want to stand out.
You should stock as many different styles as your budget allows for. But you should only ever stock one colour of each style, and as few sizes as possible. Colour is not as important to sales as many jewellery retailers think. Most customers buy a style they like rather than a colour they like. And if the necklace they love doesn't match any dress they own, they are just as likely to buy a new dress to match the necklace as a new necklace to match the dress. When it comes to sizes, don't try to please all customers. Where possible, buy adjustable sized rings rather than fixed sizes, and stock most necklaces with average length chains. As nice as it is to be able to please everyone, it's simply not realistic for a small business.
The bane of small shops everywhere, particularly gift shops in tourist areas, is overcharging. Yes, someone, at some point, will pay that exorbitant price, but that doesn't mean you should charge it. It is far better to sell ten of a particular necklace at £15 each than one necklace at £25.
You can't please everyone, and you shouldn't try. Are you selling elegant jewellery, kid's jewellery, gothic jewellery, men's jewellery, Indian jewellery, tribal jewellery, or all of the above? You need to pick a type of customer and target that customer. If you try to meet the jewellery needs of everyone, you will end up pleasing no one. Become known as the place to go amongst one type of jewellery buyer, and stop there.
Presentation matters - a lot. Your jewellery needs to be displayed on proper busts and stands, otherwise it will look cheap, and nobody wants cheap. It doesn't matter how unique or special your jewellery is if your customer is not seeing it at its best. And whatever you do, do not display anything in its plastic wrapping. It's lazy, and it's careless. If you do this, you deserve to fail.
If you think you know what your best sellers and most profitable items are, but you can't back it up with a spreadsheet listing numbers and figures, then you are probably wrong. Almost every start-up makes this mistake - they assume that because they are so small starting out, that their memory is good enough to keep them informed about what is making the business money. It's not. When sales are broken down into profits, you will often find that what you consider to be a great seller actually brings in little in the way of profit: the margin may be small, breakages and returns common, or the number of sales less than you thought. Often, the sales figures for less extravagant pieces may be far higher than you thought. Without hard figures, you will make mistakes when deciding what to reorder, and which styles to invest more heavily in.
Do not get into arguments with your suppliers. If you are unhappy with the quality of their jewellery, with their prices, with their service, or with their terms and conditions, then go elsewhere. The last thing you should be doing is causing problems between yourself and a company on which your business relies so heavily. Most of the problems between suppliers and retailers begin over minor issues, but end with the supplier refusing to sell to that retailer again. I have directly experienced retailers hassling suppliers for weeks over one or two broken items from months ago, with a wholesale value as low as £10. The end result of which is the retailer being forced to search for a new supplier only two months before Christmas. Minor issues with your suppliers should be treated as minor issues. If you blow them out of proportion out of some misguided sense of pride, or an I'm right and they're wrong attitude, then you deserve whatever befalls you. Remember, they may be your primary supplier, but you are only one of many customers for them.
Do not rely too heavily on a single supplier. If you buy all your fashion jewellery, sterling silver, watches and hair accessories from the same wholesaler, what would you do if they went out of business tomorrow, or if they decided to focus on a different style of jewellery? This does happen, and when it happens it can cause no end of problems for retailers who failed to source multiple suppliers. You should aim to buy different types of jewellery from different suppliers, and to have backup suppliers in place for critical items. For example, line up a second possible supplier of watches in the event that your main supplier folds.
The credit trap is fatal to jewellery retailers, and so tempting. It works like this: a sales rep from a jewellery wholesaler comes to visit you. He offers you thirty days or ninety days or more in which to pay. He offers you an account and treats you like a valued customer. You are flattered and you eagerly sign up, assuming that this will solve your cash flow problems. You place a large order straight away and expect to pay for it in a couple of months. From that point on, you are stuck with a single major supplier. Because you buy from them on credit, you always owe them money, and must pay them that money before you can consider buying from somebody else. The credit trap makes them your primary supplier, not because you want them to be, but because you can't afford to pay them for last month's stock and buy new stock from somebody else at the same time. So you pay last month's bill and place another order on credit, because that's all you can do. Your stock never changes, and your business flounders. Do not open a credit account with a supplier.
You are not your customer. You should not be buying jewellery because it appeals to you or because you and your friends like it. Your tastes represent only a tiny percentage of the jewellery buying public, and probably not the most profitable percentage at that. Your buying decisions should be based on what sells to the women who walk through your doors or stop at your stall.
If you are a young woman, it's all too easy to stock your shop or stall with your own age group in mind. This is one of the reasons so many jewellery shops look the same. But the reality is, older women usually have far greater buying power than young women. They often buy more jewellery and they buy higher priced items, which means greater profits for your business. Ignoring your Mother and your middle aged Aunts is a huge mistake.
I have no doubt that there are men out there who can choose jewellery that women truly want to wear. But the number is small. All too often, buying decisions at small shops owned and run by a couple - gift shops in particular - are made by men. This is not a problem unique to retailers. I have seen the very same problem at wholesale and import companies, where the person who travels out to China to buy stock is the grey haired company owner, and the result is almost always catastrophic. There is a lot of uninspiring, dull jewellery out there in shops across the land, and the blame for this often lies at the upper levels of the well established jewellery import companies. Buying decisions and buying trips are too crucial to a jewellery business to allow them to be made based on seniority. Your buyer should be the person who understands what women want to wear today.
Do you know how much that necklace really cost you? Have you included shipping charges, VAT, and packaging costs when you set your retail price? Many start-up businesses fail to understand the true cost of items. I have seen jewellery retailers selling stock they purchased from companies I have worked for at prices that fall below the actual cost of the item. Now obviously these businesses were not long for this world, but mistakes like this are so easy not to make. Break down each wholesale order when it arrives, and calculate the actual cost as opposed to the listed cost of an item. It is the actual cost that you use when applying your mark-up. For example: a necklace with a list price of £5, might have an actual cost of £6.80 after all the extras are added. Your retail price might then be set at £20 rather than £15.
When advertising works, it works. If you spend £100 a month on advertising that leads to profits of £300 a month, you have made an actual profit of £200 a month on the back of that advertising. Yet many retailers fail to see the sales and profits and only see the costs. Decisions are then made to stop advertising in order to save £100 a month, without realising that the end result is a loss of £400-£500 worth of sales. Stop viewing successful advertising as a cost that should be curbed.
Most jewellery retailers know little about web design and web marketing. This often leads to a failure to understand the true costs of running a successful website. You should look on a website as a bricks and mortar shop. Would you hire a teenager to decorate your new shop for a couple of hundred pounds? Or would you hire a professional shop outfitter and designer? If you needed the electrics refitted in your shop, would you choose the cheapest cash in hand tradesman going, or would you get someone reliable in to do the job. There is an old phrase: if you spend peanuts, you get monkeys. This is very applicable to website and eCommerce design. Quality does not come cheap, and if you can't afford it, don't do it.
Women starting out in retail are drawn to jewellery businesses, often simply because they like jewellery. They may even make jewellery in their spare time, or frequent jewellery parties run by their friends. But a business is a business, and it should be run like one. Too many women who start up jewellery businesses, especially businesses that require little initial expenditure, treat that business more as a hobby than an actual business. There is often an attitude of If it fails, it doesn't matter, or It's all just a bit of fun. If this sounds like you and your approach to your jewellery business, then I'm sorry, but your business is unlikely to succeed.
You need to take your business seriously, and the first step to doing that is to look at these common mistakes made by jewellery retailers, and to start addressing those that apply to you. No matter how well you are running your business, there will be room for improvement.