Business Plan for Custom Jewelers

Jewelry Discussion
1

Hey All!

I’m a jeweler/metal smith in MA (just starting out.) I have a dear
friend working on her Master of Business and has to write a sample
business plan and decided to use custom jewelry fabrication as her
model. She has a great deal of questions and I can answer some, but
being so new to the business I am unable to answer all of them. I
have asked some local jewelers… but I decided seeing I have this
amazing resource, why not ask you all!

My goal is to just point her in the right direction. The questions
are very vague… so any is welcome (web addresses, any
snippet of info, etc) is quite welcome! And, this may
help out a bunch of us nubie’s out there! So, thank you in advance
for your help!!!

– Is there a real market for custom jewelry… why would people
look for custom jewelry and not to an established place (ie, mall
jewelers.)

– Have you come across any (mag articles, etc) showing
that people are looking for custom pieces.

– How do we know the market is sufficient to survive?

– As somebody intending to RUN a custom jewelry business (not as the
jeweler)…

– What experience do I intend to get - trade shows, magazines,
websites

– What do we know about marketing and costs in the business?

cheers… tracey
www.greenspotstudio.com

2

Tracey,

If you were to construct a survey of custom jewelers in a given
sized community which was based on getting a wide spread of regional
economic variations, you might be able to construct a rough
mathmatical model of economic viability as a custom jeweler.

However, right off the bat, you would have to make some assumptions
about the capitalization, the level of skill and the time in
business of the individual jewelers. You would also have to try to
break down whether the business was SOLELY dependent on one of a
kind pieces or, indeed, did fabrication using components or also
sold some ready made stock. Then you would also have to sort out
whether there might not be some dependence on combinations of pure
creativity and ready made as in , perhaps, a custom pendant on a
ready made chain. I think that by now you are beginning to get the
picture…maybe there are too many variables to be able to
quanitfy the equation ! Add to the foregoing , the fact that many
newbies are subsidized by parents, relatives or trust funds,
economic viability can become a moot point. Sometimes this kind of
endeavour can be the result of weathy parents supporting offspring
that have demonstrated a lot of talent in spending money and little
talent in making it.

In the last analysis there is every reason to believe that a custom
jeweler can make it if he approaches all the requisites in a
businesslike way. This means that he must tailor his product to meet
the needs of the CUSTOMER, After all, the client is the ultimate
arbiter of your artistry. If you just do flamboyant baubles designed
to get attention you might not find a market that will support you.
I am doing a commision now that has nothing to do with art, but it
is a custom piece and it will be very profitable. My customer has a
thing about the number seven. I am doing a flat top signet ring with
seven diamonds around the periphery, a raised number seven on top
and seven melee diamonds on the raised seven. (No, it is not a size
seven ! ) As a generalization, I am strongly of the opinion that
there is definitely a market for custom jewelry and that individual
custom jewelers can better compete for that market.

People who seek custom jewelry are often the same people who
customize cars or collect vintage autos. They want attention and
they are ready, willing and able to spend lots of money for that
attention. And, they want PERSONAL attention for that service.

Mall jewelers actually have a very hard time competing with small
independents in niche markets. Their overhead is astronomical and
they must accomodate the public at odd hours. They are geared to
sell large volumes of cheap stuff at high profit. Their personnel
are seldom very knowledgable and the turnover is high. People who
love jewelry adopt their jewelers ! Ergo; they want a strong bond of
trust and confidence and they become close personal friends in many
cases.

In summary, if you want to succeed as a custom jeweler, don’t
approach it as a drama with you as the leading actor. Instead, try
your best to build a beautiful product that meeds the needs of your
probable clientele, and, when you do meet that need, do your best to
become that clients friend. Send them cards on special occaisions
and give them little perks…and, be sincere about it. After all,
friendship is also a measurement of wealth!

Ron Mills, Mills Gem Co. Los Osos, Ca

3

Those are some pretty vague questions---- You will get lots of
feedback, though. Parsing it is going to be up to you. I have two
thoughts, though. First, you need to distinguish between “custom"
jewelry, and “special order” jewelry. “Custom” jewelry doesn’t mean
much. All jewelry was custom, once, until it endured and became
"classic”. What I do is “Special Order” jewelry, which is trade
work. When you go into a jewelry store and need something they don’t
have and they say “We’ll send it to our shop”, that’s me. For your
business plan, a “Custom” jewelry store is a fancy way of saying a
"Jewelry Store" - “Boutique” if it’s mostly under $500 or so. That’s
a convention, anyway - surely there are “Boutiques” that are high
end, but that level is mostly “Salons”. If you are talking about a
"Special Order Shop", then you are talking manufacturing, and that
requires those skills. The second thought is just something to chew
on - Faberge never made the same piece twice, as a matter of policy.
Every Faberge piece (from the original shops - not today) is unique.

4 
Is there a real market for custom jewelry... why would people
look for custom jewelry and not to an established place (ie, mall
jewelers.)

Of course there is.

Have you come across any (mag articles, etc)
showing that people are looking for custom pieces.

Well, we know this is true. Do you subscribe to any trade magazines?
That would be a good place to start. And join some trade
associations –

Women’s Jewelry Association and MJSA

How do we know the market is sufficient to survive?

Well, you don’t do you? You need to research the market in your
area. It varies by area. Real research, not just asking here. Again,
MJSA has resources to help members. Also look into the Jeweler’s
Resource Bureau. (Is that what it’s called guys?)

As somebody intending to RUN a custom jewelry business (not as the
jeweler)... 

What experience do I intend to get - trade shows, magazines,
websites

I think you’re asking what experience you need? I’d suggest some GIA
training, join the above mentioned associations, attend regularly,
subscribe to the trade magazines. You’ll need some time to learn a
lot. It sounds like you’re starting from scratch.

What do we know about marketing and costs in the business?

Again, this depends on where you live, it varies.

I would suggest you spend some time at the Small Business
Administration website and that you make an appointment with your
local SCORE counselors. (SCORE is a service of the SBA.)

It sounds like you lack both industry knowledge and business
knowledge. (My apologies if I’m reading your post incorrectly.)

Working in the industry would be helpful to you. If you can swing
it, I suggest going to California to take some classes at GIA. They
have classes now for sales people, which would help you. And no one
should sell gems without knowing what they’re looking at. If you get
get to CA or NY, at least take some of their distance education
courses.

Give yourself some time to learn this stuff.

One of the parts of a business plan is the on the
principles (that’s you) and their unique abilities that will help
the business. Make sure you have some unique abilities before you
risk everything in a new venture.

Good luck.

Elaine

Elaine Luther
Metalsmith, Certified PMC Instructor
http://www.CreativeTextureTools.com ™
Hard to Find Tools for Metal Clay