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Protection for the small jeweler


#1

I am fairly new to the business of jewelry design and
manufacture. More stores and galleries are starting to inquire
about carrying my work.

How can I protect myself from loss if a business goes under and
disappears? Is there any kind of insurance I can get for my work
if it’s displayed at a store? What should I look for in a
retailer as signs of stability and good business ethics?

thank you very much!

Cindy Irwin
@Joseph_Cindy_Irwin


#2

How can I protect myself from loss if a business goes under and
disappears? Is there any kind of insurance I can get for my work
if it’s displayed at a store? What should I look for in a
retailer as signs of stability and good business ethics?

Your best insurance is to sell outright (no consignment) and
know who you are dealing with. Ask for references, then check
them all out. If you can, go into the store to see which other
artists are represented, then call some of them and ask about
their experience with the shop owner. I usually ask for COD on
at least the first order. If the shop is new, or under new
ownership, I keep them on COD until I get to know them better.
Set some basic policies and, though its good to be flexible from
time to time, beware of shopkeepers who insists on exceptions to
your policies from start.

If you do mostly one-of-a-kind or high-end pieces, consignment
or a very generous return policy may be your only avenues, but
beware of shops which only offer 50/50 consignment with no
protection against damage or loss. I recently went into that
type of gallery to check it out, and found that their security,
which I had heard was not real great, was appalling. Most of the
lower-end (under $30) jewelry pieces were displayed in baskets
in several locations around the store, just ripe for the picking.
The more expensive pieces were in glass cases. When I asked to
look at some very beautiful and expensive gold rings in the case,
the sales person placed the tray of rings in front of me and
walked away into a back office to socialize with another worker,
leaving me and several thousand dollars worth of jewelry alone.
After a few minutes of waiting for her to return, I finally
walked away, leaving the jewels on the counter. I observed that
she never looked back at the counter, nor did she return for
several more minutes. I or someone else could easily have
pocketed one or more pieces and disappeared.

Good luck!

Emily


#3

Cindy: basically the bottom line is you can’t really protect
yourself 100%. First you need a good contract. The store should
cover your work with insurance but make sure they do first. The
best protection is to KNOW the owners of the store and know what
kind of volume they do and reputation. I asked this questions a
year or two ago and heard some horror stories about bankruptcies
and jewelry artists losing their work to the bank when the
gallery folded. Just be extremely careful or outright sell the
pieces wholesale to the gallery. Others will probably have some
ideas here…Dave

Kickass Websites for the Corporate World http://www.kickassdesign.com
Crystalguy Jewelry http://www.opendoor.com/stephensdesign/crystalguy.html
Recumbent Cyclist’s Advocacy Group
http://www.opendoor.com/stephensdesign/bent/rcag.html


#4

Cindy:

You bring up a good point. I oftened wondered myself about the
stability of a shop or gallery that sells my things. First off, if
they are a new establishment I don’t go near them unless they pay
me up front or I know them or I get a good feeling about them (I
can’t help that if I like someone right away I trust my
instincts). Also, you can call the better business bureau for
info. I don’t have the number but its a 900#. Most businesses are
really upfront about their policies in regard to payment. Chances
are if a place has been around awhile they are probably okay. If
they look like they have nice inventory and you see store
traffic that is another good sign. Also, if you read the trade
papers in your area, chances are if the place is not doing okay
financially you will see it in the trade paper or magazine.

DeDe


#5
How can I protect myself from loss if a business goes under and
disappears? Is there any kind of insurance I can get for my work
if it's displayed at a store? What should I look for in a
retailer as signs of stability and good business ethics?

You really can’t protect yourself. It is just a risk you have to
take. Actually if a store goes belly up and has your stuff on
memo (consignment) you can lose it as well as the courts have
repeatedly ruled in favor of creditors in this situation,
claiming that items on memo are technically owned by the store
and not the consignor. Most legitimate stores will have
insurance against loss and theft and they shouls be able to
provide proof of this to you. You are not supposed to deal with
that end of it. Look for stores that are AGS stores or who
belong to the local BBB and the AGTA or other ethics based
organizations. Sign up with the Jewelers Board of Trade. They
rate most retailers in the jewelry business. This of course
costs a healthy bundle but if you plan to do a lot of wholesale
it may be worth it. The best thing though is to NOT do
consignment–wholesale it outright. Much safer than anything (at
least after you get paid) but you will still need the JBT to
check on credit ratings.