With the advent of the internet, the way jewelry was sold changed exponentially. In a pre-internet age, most people either sold retail or wholesale. Today traditional wholesalers are selling their work retail to the ultimate consumer, and retailers are selling their work wholesale. The divide separating the two has become all but indistinguishable.
Things first began getting fuzzy in the early 1990s, when jewelry designers who had only sold wholesale discovered retail craft shows and with them a new source of income and enthusiastic customers. What started out as a trickle soon became a tidal wave. By the time the internet was readily available in the mid-‘90s, the lines were indistinguishable. In those early days, many jewelry stores didn’t want designers to have their own websites where they sold their work. Some went so far as to say they wouldn’t do business with any designer who sold from a personal website.
That attitude has changed. We are all out there now. Etsy is just one online venue among many where designers can sell to the ultimate consumer and also take advantage of a wholesale division.
When deciding how you are going to sell your work, consider the advantages and disadvantages of each strategy and weigh the complications that can arise when you choose to sell both retail and wholesale.
The advantage of only selling wholesale is that you do fewer shows and your orders are larger. You don’t have to work as hard to get your name out there. You also end up dealing with fewer people. The disadvantage is that the price per piece that ends up in your pocket goes down.
The advantage of only selling retail is that you get your money immediately, and the full retail price of the piece goes to you. The disadvantage is that you have to do far more work to gain your customers. Often this means more shows, which involves more time traveling and setting up.
The advantage (and it’s a big one) of selling both wholesale and retail is that you have multiple income sources, which is important in today’s ever-changing market.
Below are a few things to consider before deciding on a strategy.
So many people underprice their work when they first start out. I call it the Etsy mentality. When I am wandering through Etsy, I see many, many jewelers who are selling their work at the price of their materials and not making a profit. Profit = Happiness! It also equals being able to stay in business.
However you sell your work, you should know the retail price and the wholesale price for every piece you sell. Your wholesale price should take into account your materials, your time and a reasonable profit. This is the price you sell your work at in bulk. You should consider setting a minimum order for anyone who gets your wholesale price.
These large purchases are what make selling wholesale worth the reduced profit margin. Once you have your wholesale price, multiply it by about about 2.4. That’s what you should be selling your work for on a retail level.
If you’re selling both retail and wholesale, you need to be careful to sell your work at its retail price when working with the end consumer. You don’t want to undercut stores that are placing large orders with you.
If you have a website and also sell wholesale, listing your prices on the site can be touchy. You have to make sure the prices available for anyone to see are your retail prices. Make sure your wholesale prices are behind a log in wall, or keep them in a PDF or spreadsheet you can send to potential vendors upon request.
If you sell wholesale only but maintain an online presence, occasionally a customer will contact you and insist on purchasing directly from you. This is often a sign that she is hoping to get a better price than is available at her local store. There are a couple things you can do to make this a win-win situation for everyone. If the customer is insistent, take the order and sell the piece at the price the store lists. Then send the store, which has done all the leg work, its part of the sale. The store is happy, you are happy and the customer is happy. You can also insist that the customer go back to the store that originally showed her your work. For a single sale, you don’t want to put a long-term relationship with a store in jeopardy.
When a customer finds a designer she likes, she will often contact all the stores carrying that line to see where the best deal is available. You don’t want a bidding war to start over your work. I have seen it happen. It gets ugly. If you start to get a lot of calls in a few days from different stores asking for information on the same piece, you know someone is looking for the best price. At this point you should become proactive. Contact all the stores you have received calls from and let them know what is happening.
Often stores or galleries will request exclusive access to a jeweler’s work within a given area before making a purchase. This ensures the store does not have to compete with the shop down the street. It also means the store should remain more faithful to you. I have only given exclusivity to stores in good standing that purchase jewelry, pay on time, and reorder on a regular basis. Exclusivity is a two-way street that should be beneficial to both parties.
Selling both wholesale and retail can be challenging. But if you want to stay in business, I highly recommend looking at multiple income sources and figuring out what the potential obstacles might be. Of course, you will never know when you first start out what might happen, so be open to learning as you go along and find someone who has been in the business for a while who will give you good advice. This is the new paradigm for running a successful jewelry business.
Marlene Richey started a jewelry design firm with no prior business experience. During the 35 years since, Marlene has run a wholesale business and a retail gallery, participated in hundreds of craft and trade shows, and traveled across America selling the pair’s jewelry. She has served on the boards of SNAG, CJDG, Maine Craft Association, Metalwerx and WJA. Marlene consults with artists, teaches workshops and was professor at the Fashion Institute of Technology and Maine College of Art. She is also a contributor to various jewelry and craft publications and wrote an award-winning book on running a jewelry business, Profiting by Design. Have a business question for Marlene? Leave it in the comments section below and she’ll get back to you.