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Independent jeweler in today's marketplace


#1

I was talking to someone at a company that owns factories overseas.
This company is able to charge very small amounts of money for
earrings made in precious metals. This was not costume jewelry,
folks, it was fine jewelry in precious metals. When I asked about how
much it would cost someone to start a jewelry business, I was qouted
a colossal sum – I am talking seven figures, people (I’d love to
hear a figure from some of my fellow Orchidians, this sounds like
quite a high sum). Absolutely NONE of their products were purchased
or made in their home country, but in a Third World country. I am
sure that the company is selling wholesale to many of the same
companies that a lot of smaller jewelers would like to sell to, if
the smaller jewelers could get a reasonable price for their items.

I have a question: How does a small jeweler stay alive under these
situations – especially a jeweler that may not have the means or
desire to make their products overseas? Especially a jeweler who is
making efforts to learn as much as possible, buy books and tools and
pay for classes and buy materials in their home country. Customers
are used to paying very little for precious metal items, such as
silver, and even relatively small amounts of money for gold.

Please note that I have no grudge with people in the Third World and
wish them all the best, so I don’t want people to think that I feel
this way from my post.

I would just like for us to have a thoughtful conversation about this
and hope that people won’t just say that money is irrelevant, etc,
you should go into this business solely because you want to make art,
etc! I would really like for us to have a conversation about positive
strategies an independent jeweler can use to survive in today’s
marketplace. I love making jewelry and art as much as the next person,
but I would also like to eat, pay my bills and have a roof over my
head.


#2

I can’t compete with overseas factory prices. I have to make things
that they would never dream of. That’s the only way to live, that I
know of, as an independent designer here in the USA. Plus, it’s more
fun anyway! Don’t even look at their prices when you are figuring
out what to charge. Base your prices on your costs, labor overhead,
etc as they really are. Take a big gulp, and write that number on
your price tag. Really.

M’lou Brubaker
Minnesota, USA


#3

The individual jeweler will survive because no matter how much is
imported cheaper there will always be a piece of jewelry that someone
falls in love with from an individual jeweler. I think the public
does like to meet the artists and does enjoy attaching a face to the
jewelry they buy. It is an emotional response and connection that
mass production loses. I as an individual can find that one unique
stone and then plan a piece to a clients tastes. It is these pieces
people fall in love with and it is these pieces that I enjoy making
most.

Teri
Silver & Cameo Heritage Jewelry
www.corneliusspick.com


#4

Dear Annabel, the independant jeweler is not selling to the same
people that the large manufacturors are. Finding your jewelry’s
customer is the real problem. Setting up your business in a
realistic way, look at the trade publications for is a
good start. If your market is art, then winning awards and getting
recognition in the art world is necessary. The small independent
cannot compete against Walmart but Walmart is not selling to your
customer.

Sam Patania, Tucson


#5

Hi Annabel,

I feel ya. For myself I have observed those overseas products and
trends, and refuse to compete for the reason it is impossible to–
unless twenty to fifty of us small-time jewelers got together and
started something here in the states. It IS doable, but the idea is
not too attractive and would tend to have many people lower their
pride as a “sole” jeweler or artist (myself included, but I would be
willing to joint effort of some kind if that opportunity arose).

So then I have been working on “out of the box” ideas to make a hit
as a jewelry artist. In the short run you may have trouble paying
bills and eating top sirloin, but if you truly have something
artistic to offer this profession, it will pay off. The way I see it
is if I waste time pumping out dime-a-dozen jewelry, I waste pure
potential when I know I have genuine ideas to develop.

All the best,
Jim


#6

Annabel,

Oh yes, positive strategies… Do you have a “life plan” or “business
plan”? I’m currently writing and rewriting as I go along; it’s a
dynamic document and should never be static, because we are dynamic
people (hopefully). As your life changes, you update the documents as
necessary.

A life plan or business plan should clearly state your goals and
desires and your skillsets, skillsets in progress of learning, and
future skillsets to learn; additionally your strengths and weaknesses
should be outlined, and also provide a network of “great people” to
help fill the gap of any weaknesses. Keep in mind that you are one
person and can’t do everything (obvious but I often think I can do
everything, too! Gotta keep myself in check and in reality).

Here is a great link to an example “life plan” to help you out before
going further:

http://tinyurl.com/pyfr7

Jim


#7

Hi again Annabel,

Forgot to complete my thoughts: here is the link to the TEMPLATE for
that example “life plan” so you can fill out your own in a Word
document:

http://tinyurl.com/pyfr7

I’m in no way affiliated with the company, but StartupNation is one
of the best business sites available for start-ups (I’ve looked far
and wide).

Off the subject, yet could be helpful to someone: going back to the
mention of a roof over your head and the food. I would like to
briefly mention that we are a highly materialistic society-- and of
all things, I would say jewelry is the best because you can have more
of it since it is small hehehehe. Anyway, onto my point:

You (or someone else) may have a certain lifestyle you’re accustomed
to, or striving to get to a higher “material” quality of life-- but I
would challenge anyone to observe their current materialistic "needs"
and determine if those needs are actually draining the quality of
their LIFE at this time. And be careful about setting yourself up
with new material you may not need immediately; the “it’d be nice to
have…” things can wait!

For instance, and I’m generalizing here (not targeting you or judging
in any way), do you need to drive that huge brand new gas-sucking SUV
and make horrendous payments on it? Or can you settle for something
more affordable, used, practical, etc?

In other words, I challenge people to find what TRULY makes them
happy and at PEACE, what material things they can settle for, and
what things they can live without; this seems irrelevent to your
post, but unneeded expenses and extra stress on “things” can affect
your focus, productivity, and creativity.

Right now our garage is jam-packed with a mountain of crap. Truly the
American Dream, right? We are currently selling or donating 80%
percent of the idle unfulfilling junk. If you walk around your house
I’m sure you can find things that you think, “I haven’t used that in
years, I can live without it.” Sell or give away those things and put
the money into Savings. You will be doing yourself a huuuuge favor to
do it sooner than later.

I’m a simple person, so I can live without a lot. But I still have
desires and plans to “get more” as long as it is practical in the
long-term. This also applies to buying toys for children. Get
something that will stick with them, like a toy jewelers bench! – Or
die-cast trucks and cars, not cheap toys that break the next day-- no
matter HOW BADLY THEY CRY THAT THEY WANT IT!!! :slight_smile: And toys for girls,
well… ok a few stuffed animals and dolls, but do they really need the
ENTIRE collection of beanie babies and barbies (or anything else)
that cost you an arm and a leg? (We’re currently dealing with that,
too!) All right I think I’m done rambling… sorry.

If people end up using the “life plan” I’d love to know and network.

Jim


#8

Hi Jim,

I like the lifeplan and I commiserate with the jam-packed garage
full of “stuff”. Only ours is in a storage facility costing us more
money per month which adds insult to injury!

Thanks for posting the life plan; it’s a good idea and one that
could help many people achieve that ever-so-elusive thing called
peace of mind.

Cheers,
Sue/Vancouver


#9

Thanks to all of you who responded, really great ideas and I really
appreciate it. Very helpful insight – from the way jewelry will be
marketed, to advice about customers, to advice about life plans and
thinking about what one really needs! All good advice. I agree that
it is sometimes easier to get caught up in keeping up with the
Joneses, but when I was speaking about a roof over ones head and
food, I really meant it. It is so expensive to live in America today
– I am not even talking about a car but saying paying for one’s
education and one’s child education, that economic factors are an
issue for me as I decide whether or not to move ahead with this
jewelry business. I love making jewelry, but I have already spent a
ton of money just getting started and there seem to be huge barriers
to entry – i.e. high cost of equipment and sourcing of materials AND
customers – that don’t exist in other businesses.


#10
When I asked about how much it would cost someone to start a
jewelry business, I was qouted a colossal sum -- I am talking seven
figures, 

This was probably an amount necessary to set up a large
manufacturing operation like they were running. A smaller one can be
done much cheaper, I’m sure, although you should be prepared to pay a
fair amount of money to get any new operation up and running if you
are approaching it from a serious standpoint. It depends, however, on
what kind of business you are starting up. If you are opening a new
retail store and you want it to look decent (remember this will vary
by area as well) you will probably need to go into 6 figures (unless
you’re one of those people who likes to do it all yourself). When the
partnership I was in broke up and I opened my own place two years ago
we sunk more than $150,000 into the new location (and I already had
all of my own tools, a safe and inventory). Of course I’m selling
stuff at an average price point well above $2500 so the place has to
look better than someone who is selling all $50 earrings. I also am
located in an expensive area with stringent building codes and have a
landlord who wouldn’t do anything at all for her tenants. But in
terms of high end stores I’m actually probably at the low end of the
start up costs. When Shreve, Crump and Low moved a year ago they
spent close to 7 million getting the place redone. (On the other hand
they can do in one day in December what I make in 6 months.) If you
are starting up a manufacturing operation, really your investment is
just in the tools, enough stock to get started and an out of the way
location. If you have your own tools already you could probably get
going for a couple of thousand dollars. If you’re the only employee
to begin with you can definitely do it for that much money.

How does a small jeweler stay alive under these situations --
especially a jeweler that may not have the means or desire to make
their products overseas? 

Find a niche and stick to it. You don’t have to make the same
designs as the overseas companies. You don’t have to compete with
them. You just have to find your market. There is a large market for
custom work, high quality repairs and original designs if you promote
yourself properly. There are a number of jewelers on this list who
have highly successful businesses that have been ongoing for years.
If you want to wholesale go to the high end craft shows and talk to
all the galleries. If you want to do retail, get yourself set up
somewhere and get started. Do craft shows. Hand out your business
cards. Market yourself. It isn’t really about the jewelry you
sell—it’s about you.

I would really like for us to have a conversation about positive
strategies an independent jeweler can use to survive in today's
marketplace. 

Here’s the best single strategy you can do to make money in today’s
marketplace (assuming you are retailing): Make up a line of basic
designs, easy to reproduce and simple. Then make up all of the fun
stuff you actually like to make. Use the money you get from selling
the basic designs to finance growth and the ability to produce more
fun stuff. Keep on doing that for enough years and you’ll develop a
clientele that will appreciate both ends of your work. You’ll make
money (eventually enough so that your employees can make the boring
stuff) and you’ll be doing what you love.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
617-234-4392
@Daniel_R_Spirer
www.spirerjewelers.com


#11

Dear Speedy Jim,

It seems to me that many of you would be jeweler/ artists may be
missing the point. “Making it” as a jeweler/ artist is not about
promoting your ego but, rather, about meeting the customers’ needs.
If you can make an icon that appeals to the buyer and it meets HIS or
HER needs, then you are “making it”. The satisfaction comes from
serving the customer…not from the customer worshiping your
creativity. True creativity evolves from being able to create
something that meets the needs of the buyer. It is likely that you
can be VERY creative in your work, but your work doesn’t fill a need
in the customers mind.

It seems to me that the starving artist cliche’ best suits the
craftsperson who creates things that are not connected to potential
purchasers needs. It is all about sellers’ egos and buyers’ needs !
If people love your work, you are an artist, but, if they don’t buy,
you are a work in progress and the outcome is uncertain. Better to be
an artist today than whenever !

Ron MIlls, Mills Gem Co. Los Osos, Ca.

P.S. Let’s not forget that art is fickle, and that todays’ art
trends are marketing driven.The current white metal, micro pave’,
bling thing is just a passing fancy…wait and see ! R.M.


#12

Hi Annabell,

You said in your last post,

I love making jewelry, but I have already spent a ton of money
just getting started and there seem to be huge barriers to entry --
i.e. high cost of equipment and sourcing of materials AND customers
-- that don't exist in other businesses. 

I think that setting up any type of retail establishment or large
wholesale operation, you are going to spend a lot of money. I also
think that in whatever business or trade you enter, there are going to
be some sort of barriers. I think you should really weigh what you
want to put into this financially before you continue. I decided to
start my small venture four years ago with very little money. What I
learned was that you need to have the capital in place to finance
your business or it isn’t going to fly. I was unwilling to take out
loans and I burnt through my $4000.00 seed money but quick! Trying to
make ends meet and do it all alone alone nearly gave me a nervous
breakdown. The lesson in the story? Make sure you have the funds to
finance your venture or are willing to go into debt to do it, or don’t
do it for your occupation. The man who said he spent $150,000 setting
up his business blew me away! Where on earth does anyone get $150,000
without borrowing it, and if you borrow it how are you so sure you are
going to be able to pay it back? What if your business tanks, are you
going to spend the rest of your life trying to pay back that
enourmous debt AND make a living? Won’t it kill your credit? I guess
I don’t know much about finance, but I do know that I wasn’t going to
take the risk. I went back to college instead. Jewelry is my hobby
and I’m happy. Make sure you look before you leap…at
everything…especially the money.

Augest Derenthal
Cry Baby Designs


#13
It seems to me that the starving artist cliche' best suits the
craftsperson who creates things that are not connected to potential
purchasers needs. It is all about sellers' egos and buyers' needs !
If people love your work, you are an artist, but, if they don't
buy, you are a work in progress and the outcome is uncertain. 

Thanks for your post. Point well-taken. I admire starving artists,
but I don’t want to be one myself. Do you have more specific advice
about how someone can meet the buyers’ needs?


#14

NO PAIN, NO GAIN !

We had to start all over again 18 years ago when we lost a legal
battle with a government agency which had condemned a commercial
property that we owned and which had been polluted by a tenant.

My wife and I were left penniless, but we some stock and a fair
selection of equipment and tools. We had to start all over again with
no money in the bank.

We made all of our own fixtures and did our own remodeling. We lived
in a cramped duplex and drove an ancient Toyota pickup. After a year
we got ousted from our store and had to start all over again in
another location. For many years we lived from bill to bill and
gradually made progress. In about the tenth year we relocated to a
much better and larger location. Since then our store has thrived
and we now can buy a new car every few years, live in a very
desirable apartment and take occaisional trips. The only thing absent
is the ability to own property. Local hovels start at half a million
dollars ! Nonetheless, we are working on that problem…Now our
biggest problem is keeping up with the demand for our services as we
approach our mid seventies ! Moral of the story…you have to
bust your butt to make it and you have to love what you do !

Ron MIlls, Mills Gem Co. Los Osos, Ca.


#15

Well put M’lou:

Base your prices on your costs, labor overhead, etc as they really
are. Take a big gulp, and write that number on your price tag.
Really.

There is no difference between trader, manufacturer, artist when it
comes to business. Get a minimum of 10% return on your investment
(your money tied up in the business), cover the overheads (the cost
of maintaining the business), and get a fair return for your time in
wages. Do the math, and the number is all too often shocking, The
easy option is to fudge the number - everybody is happy, you have
ripped yourself off! The hard option is to stick to your number, or
arrange the business so that a less shocking number is accurately
achieved. Nobody will do it for you, it is your responsibility. The
competition (in the guise of many faces) will invariably suggest the
easy option as your only option.

Alastair


#16

I think the starving artist part only happens when the artist looses
touch with what is practical and becomes engrossed in feeding their
ego and making wacky pieces that no one would want.

Craig
www.creativecutgems.com


#17
What if your business tanks, are you going to spend the rest of
your life trying to pay back that enourmous debt AND make a
living? 

This is what bankruptcy is for… Even though people will disagree.
If airlines and huge business can do it so can the individual who
tries to get somewhere.

Craig
www.creativecutgems.com


#18

Annabel,

You are right.

Surveys in US and Europe have shown that independents are being
squeezed out. Sorry to sound pessimistic but it’s a fact. Therefore,
this calls for a radically new business plan on the part of the
independents.

Regards,
Rasesh Chasmawala.
Mumbai, India.


#19

The ultimate art of being a jeweler is how you relate to people…I
don’t know any other way of stating it more succinctly !

Jewelry is a statement of taste and/or an icon which represents a
relationship or a belief. If you are going to relate to a potential
buyer it is a given that you must connect with that person in some
way. The best way to connect with others is to be a good
conversationalist…aha!..what is a good conversationalist ? It
is a person who talks little and listens a lot ! Furthermore, when
you do talk it should be a personal question addressed to the
listener. I.E. Where were you born ?..where do you live ? Do you
have any children ? How long have you lived in the area ? What is
your birthstone ? What is your favorite color ? etc. etc. The idea is
to draw the person out and identify his or her priorities. Another
consideration is that you must do anything possible to help allay the
suspicions that most people have about jewelers and,especially, sales
people.

Too many jewelers are “con artists” and they have given the industry
a very bad reputation.It is essential that you come across to the
customer as being sincere. The worst thing you can do is think only
about the sale and the benefit that it might have for you. The
customer should never be taken for a stroll down a path that leads to
financial disaster nor should he or she be deceived in any way. De
Beers has gotten off to a very bad start on its website by asking,
right at the outset, What is your yearly income ?

You have to point out the pros and cons of any buying decision and do
so objectively. Never think of the customer as a mark to be seduced
and thrown away. Think of the customer as a friend who will rely on
you to guide him or her many times in the future when special
occaisions arise. ( P.S. I thought I lost this when I strayed onto
google for a question…sorry about the repetition.)…

Ron MIlls, Mills Gem Co. Los Osos,Ca.


#20
The man who said he spent $150,000 setting up his business blew me
away! Where on earth does anyone get $150,000 without borrowing
it, and if you borrow it how are you so sure you are going to be
able to pay it back? 

Well, in fact there are a lot of people who have that kind of money.
But yes I borrowed it. I had an existing clientele and a proven
business plan in place when I did it so I wasn’t particularly worried
about paying it back. Has it been easy paying down the debt? Of
course not, but why does everyone think everything is going to be
easy? We planned on about a 5-8 year payback time frame. It’s just a
part of the cost of doing business. Almost all businesses borrow
money at some time or another to smooth out ups and downs in their
business. On the other hand, the fact that $150,000 blows you away is
interesting. Do you know what it costs to start up a restaurant from
scratch in most urban locations now? You generally can’t get away
with spending less than a half million dollars (many cost far, far
more than that). Since most restaurants work on about a 5% margin
after costs that means you have to sell ten million dollars worth of
food to pay back your initial investment! As I said in my post I’m at
the low end of retail start ups. Unless you’re relatively small and
starting by the seat of your pants (as Ron Mills described in today’s
posting–and as I did in my first store location 25 years ago when we
opened for $15,000) $150,000 in an urban setting is small potatoes.
Think big, be big. Think small…well you get the message here.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com