7 Ways to Make Your Jewelry Business Survive Uncertain Economic Times
by Catherine D’Arcy.
The economy seems to be falling apart before our eyes, with house prices crashing, mortgages rising, food and gas prices going through the roof and the price of silver (and gold I believe, although I am no expert) double what it was a year or so ago.
At Corazon Latino I sell almost exclusively silver jewellery and I have seen the prices from my artisans increase by well over 50% in the past 18 months.
At the same time, people have less money to spend and retailers worldwide are showing big downturns in sales. So how, as a small jewelry business, do you survive in this economic climate?
Reduce Your Overhead
First of all, you need to ensure you have the lowest possible overhead expenses.
When you start out, you need to do everything for yourself. You cannot afford staff, premises, or any support. You must be willing and able to be your own buyer, salesman, marketer, bookkeeper, customer service agent & packer.
The only person I would advise you invest in is a good accountant to ensure you do not make a mistake and fall foul of the tax man.
Provide Unique Jewelry
Next you need to ensure that what you are offering is genuinely unique and different. If you are just buying from a wholesaler, the chances are someone is buying more, cheaper than you and can undercut you. Businesses that compete solely on price do not fare well during economic downturns as their margins are tight and their customers are not loyal.
By offering something that is genuinely unique, you immediately create your own market. It may not be big, but at least there’s no competition.
Know When to
Increase Your Prices
If your raw materials are going up in price you need to increase your retail and wholesale prices. If you don’t, your business will slowly fall apart. (Assuming you weren’t being greedy in the first place of course.)
If you can afford to absorb a little of the increases, do so; your customers will appreciate it. But don’t cut your own throat out of fear of increasing your prices. Explain the situation to customers. Most people are reasonable and they will understand.
Never Sacrifice Quality
Do NOT take the option of reducing quality. In my opinion this is dishonest, and if you have a loyal customer base, you risk losing the very people you have spent years developing.
For example: If you sell a pretty silver bangle weighing 35g and the price needs to go up by 20%, do it. Do not take the weight down by 20% to 28g and keep the price the same. It may seem like a good idea but what happens when someone who has been recommended the bangle by a friend buys it and discovers hers is lighter? Or someone with one buys one as a gift? You don’t look good.
Taking weight or value out of things usually reduces quality, and in the jewelry market, quality is your best chance of survival.
Make Your Jewelry Business
If you are unique, and offer a good quality product, make sure you show it.
Invest in a good quality website, use professional models and photographers, and make sure that everything you do screams “quality”. In this way you have a far better chance of justifying your prices and attracting the sort of customers who are less susceptible to the economic downturn.
Take Customer Care Seriously
Customer service is key to survival when times are tough. Anyone will tell you it costs much more to get a customer than to keep one.
Great service isn’t difficult or expensive. It just takes time, care and attention – and it has a huge value to your customers.
Great service inspires loyalty, gets you word of mouth recommendations and makes people a lot more understanding when prices rise.
If you focus on these areas, and control your costs, you will be able to weather the storm. These things are cyclical.
Maybe we aren’t going to have a great year this year, but the jewelry businesses that manage the situation with honesty, integrity and great customer service are the ones who will still be here in a year or two’s time to reap the benefits of the next upturn!
Also by Catherine D’Arcy: The Accidental Jewelry Business.
Author Catherine D’Arcy is the founder of Corazon Latino (“Latin Heart”), an online retailer selling handmade silver jewelry, including the beautiful silver and amber pendants like the one shown above. The range is designed and developed by Catherine, working with skilled silversmiths in Latin America and Eastern Europe.