At the beginning of this book, I said that some of the advice I was going to give you would be controversial. We're now entering territory where my advice will fly in the face of established wisdom. My own experience in the jewellery business is as a retailer for many years, and as a wholesaler and importer supplying retailers of all kinds. I know what sells, and I know what makes money. And more importantly, I know what does not sell, and I know what does not make money.
The first thing you need to understand about jewellery is that it's not about price.
When women decide what necklaces they are going to buy, that decision is not based on price, not when it comes to costume jewellery or jewellery that retails at less than £50. When buying an engagement ring for £500 or £5,000, price plays a major part. But when buying a necklace to go with a new dress, when the choice is between a £10 necklace on a display at River Island and a £25 necklace hanging from one of your displays, the decision is based on which necklace they prefer. It's that simple.
At this price point (the cost of a new pair of jeans), women do not buy on price. If they are buying for their ten year old daughter, then yes, price does come into it. If they are buying a gift for somebody else, then here too price plays a part. But when buying for themselves, as long as an item is affordable, they make the decision based on what they like.
What does this mean for your business?
This means that you should stay away from the bottom rung of the ladder. Do not stock and do not sell junk jewellery. Leave this to the eBay sellers, the chain stores, and the stall holders who flood each car boot sale and market, each selling the same items at the same bargain basement prices.
Target the middle to top end of the fashion jewellery market. Aim to sell quality, unique items, at middle to high prices. Believe me, it is no easier to make a £4 sale than it is to make a £24 sale. But once that sale is made, the higher priced item will bring in five times as much profit.
This is true. But the reality is, you won't need to buy so many of them. Consider two clothing shops: one cheap and cheerful, with clothes piled high to the rafters, the other elegant and discerning, carrying only a small number of items, all displayed with plenty of room for shoppers to walk around and view them. The second shop may be selling far more expensive items, but they don't need to stock very many.
This is the model you should adopt for your jewellery business. Think quality rather than quantity. Far better to have a display containing only thirty unique and fashionable necklaces, than a cluttered display housing two hundred lines of junk jewellery priced at only a few pounds each.
But don't panic, every item does not have to be expensive. You can always populate your displays with a small number of cheaper lines: £12 necklaces or £8 fashion rings, for example. Cheaper items do occasionally pull in customers, who then go on to treat themselves by buying your more expensive lines. And when it comes to your expensive items, try splashing out on two or three large signature pieces that really catch the eye. There's nothing better than unusual pieces of costume jewellery to pull in the customers. You don't even need to sell these pieces. Their job is done when that customer walks in the door. Below are two examples of eye catching pieces that would make you stand out from the crowd.