Start a jewelry store by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your jewelry store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a jewelry store?
A small jewelry store can be started for as little as $20,000. However, depending on your location, it might cost up to $100,000 to get started.
A typical breakdown of expenses might look like this:
- Rent: $0 (if you start your business out of your home); $1,000 per month for a small storefront; up to $10,000 per month for a larger storefront, depending on location.
- Overhead and raw materials: $500 for basic raw materials to make low-end jewelry; $10,000+ for precious metals and gemstones.
- Insurance: $500 - $1,000 per year.
- Basic tools: $200 - $300
As your business grows, you will want to add more tools to your tool set, including grinders, a professional workbench, various gemological tools, hammers and mallets, laser welders, loupes and magnifiers, metal forming tools, gauges and scales, molds and casts, engraving tools, beading supplies and beaders, burs and drills, adhesives and various specialty compounds, polishers, and safety equipment.
Costs vary, of course, depending on the size and scope of your operation. However, a full tool set may add several thousand dollars to the overhead cost.
To reduce the overhead cost, consider bootstrapping your business.
For example, instead of taking on large loans, consider borrowing money from a retirement account, cash value life insurance policy, your own savings, or from a friend or family member. Grow the business slowly over time as finances allow.
What are the ongoing expenses for a jewelry store?
Ongoing expenses for a jeweler vary based on the size of the operation.
A jeweler may have to pay rent, supply costs, and labor for a small to medium-sized operation. Larger operations usually cost more to run.
A typical breakdown of costs may look something like this:
- Rent for building: $3,000 - $10,000, depending on location
- COGS: Precious metals spot price + spread + gemstone = $3,000 - $50,000+
- Labor cost: $25,000 - $50,000+ per employee
- Insurance: $1 - $2 per $100 of merchandise
Who is the target market?
Ideal customers are those shopping for an engagement or wedding ring. Alternatively, those who are interested in and can afford luxury jewelry or custom pieces are also ideal customers.
How does a jewelry store make money?
A jewelry business makes money by fabricating and selling jewelry. Customers typically pay a set price for the piece which is based on the cost of metal, gemstones, labor for fabrication, and jeweler’s markup.
How much can you charge customers?
Jewelers have their own language when it comes to pricing their product, called “keystone pricing.” This means wholesale pricing times 2. In other words, traditional jewelers will mark up pieces 100%. A piece purchased for $100 should be sold for $200, minimum. However, it’s not uncommon for rare items to be marked up 300% or more, which is called “triple keystone pricing.”
With smaller jewelers, cash or credit is the standard method of payment. For larger retailers, in-house special financing is often arranged for more expensive pieces.
How much profit can a jewelry store make?
According to the Bureau of Labor Statistics, a precious metals worker makes just under $40,000 per year. If a jeweler is an owner-operator, he may make this much net of costs. A successful owner-operator could earn more, however, depending on location and size of the operation.
How can you make your business more profitable?
Growing your business is the key to more money in the jewelry business. Prices for metals are determined by the commodities markets and gemstone pricing is determined by distributors. Therefore, jewelry store owners need to focus on business expansion.
Some ideas include:
- Selling over the Internet through popular online marketplaces (markets like etsy, ebay etc.)
- Selling through local markets, farmers markets, mall kiosk/pop-up shop, or other temporary locations
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Jewelry Store Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your jewelry store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a jewelry store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
If a jewelry business is working with multiple artists that will be using the online business to market/sell their own jewelry, it is advisable to draft a standard contract regulating terms of conditions under which you may sell their artwork. This type of agreement is often referred to as a consignment agreement.
- A sample gallery-artist agreement can be found here.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources
Certificate of Occupancy
If a jewelry business plans to have a physical retail presence, a Certificate of Occupancy (CO) will be needed. A CO confirms that all building codes, zoning laws and government regulations have been met.
When leasing a store location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a Jewelry business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
When purchasing or building a store location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your Jewelry business will be in compliance and able to obtain a CO.
As well, many retail establishments will play music in the store to offer an aesthetically pleasing environment, requiring a music license:
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a jewelry store
Marketing a jewelry store is usually done via word-of-mouth and local advertising. Advertising of this type can include anything from explaining your business to those in your social circle and asking them to tell others they know about your business to participating and presenting your jewely at various community events and local fairs.
How to keep customers coming back
Jewelers who specialize often outperform their peers. For example, a jeweler who specializes in custom wedding pieces will attract a unique kind of customer and outcompete in that market.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Jewelry Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is suitable for individuals who have a passion for metalworking and are experts in the trade.
The jewelry business is also influenced by the gemstone and precious metals industry, so business owners should also be metals enthusiasts and enjoy watching the metals and gemstone markets.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a jewelry store?
Business owners typically work late hours and spend a lot of time creating jewelry, taking inventory, and managing supplies.
What are some skills and experiences that will help you build a successful jewelry store?
Being a jeweler is a trade, so most entrepreneurs who get into this business already have experience in the industry. However, that doesn’t mean an outsider cannot start a jewelry store. Experience in metalworking, sales, gemstone cutting and analysis, and accounting is strongly recommended.
What is the growth potential for a jewelry store?
Being a jeweler is a low overhead business. You can run it out of a home or garage or rent a small office or building. Small jewelers are usually owner-operated and focus on custom jewelry and pieces for the general public. Large retailers may or may not do many custom pieces and often focus on mass market appeal.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
If you already have training in metalwork and gemology, then you probably don’t need to hire help outside of an accountant and other support staff. However, if you’re a first-generation jewelry store owner, at minimum you need staff with gemological training and experience working with, buying, and selling precious metals.