What can Going Big in a jewelry business look like now?  A tale of two businesses

It feels like a rough time to even be thinking about investing big into your business. Right?

But there isn’t really a wrong time to think big about the future of your business.

Case study of two distinct jewelry businesses thinking about going big or going home

Both designers have similar product mixes – fine and demi fine with growing fine jewelry categories. Both use a mix of gold fill, solid gold, and silver.

Jewelry Designer #1

• Is redefining what “going big” means – i.e. profit over volume

• Has decided to lean into Direct-to-Consumer (DTC) sales

• Has a lot of experience as a business owner and is looking at the data to make decisions.

• Meeting the metals market moment (try saying that three times fast) by increasing profit through DTC sales

• Reducing reliance on wholesale and will set good boundaries with existing accounts.

Jewelry Designer #2

• Hasn’t even developed a wholesale program yet, been purely focused on DTC, custom, ads, shows, thinking of opening a shop.

• Wants to “go big” but isn’t sure that a trade show is a good investment for her right now.

• Has thought about making wholesale part of their sales mix for years , feels like they may have missed their chance.

• Deciding between an investment in craft shows shows or an investment in an in person experience (shop/atelier).

  • Weighing how the investment will help produce higher volume OR fetch higher prices for her work.

• Isn’t slowing down marketing at all, in fact is ramping up with email and social media.

• But still thinks a few wholesale accounts could bolster reputation and sales.

How Jewelry Designer #1 is rethinking her wholesale program – and ditching it completely

Designer #1 has cut 90% of wholesale – some cuts came because stores closed, or didn’t reorder; others were a conscious decision to end a relationship because of low or slow sales, or because the account had become too demanding for not enough money. They will continue to fulfill orders for their best clients, but won’t be taking on new accounts.

Designer #1 is in a good place to take this step. After 10+ years in business, she has focused a lot on building her clientele, developing loyalty, and creating an email marketing plan that is consistent and sales-focused. This decision to curtail wholesale was not taken lightly or without planning and financial examination. A cold hard look at the numbers revealed that she would be trading slower volume for a sharper focus on profit. The business would continue to grow and she will be able to go big by focusing on her own reputation.

Was this business decision made on a lark? Absolutely not

This was a carefully considered and planned-for choice complete with shifts in pricing strategy (mostly because of the very high metals market), introduction of direct-to-consumer (DTC) only pieces, new financial projections, and a refreshed marketing approach highlighting in-person craft shows, intimate in-person appearances, and a plan for an improved eCommerce customer experience. She also knows that more hands-on and in-person events are going to be a core requirement of her to build the DTC sales volume to what her wholesale volume has been.

Designer #1 had lots of face-time with wholesale buyers and DTC customers over the years – she built relationships and gained visibility that she is now able to leverage. This is a big part of the reason why she will be able to make this transition with ease – the years she already spent building her clientele have made her business stronger and better able to weather big decisions like this.

The biggest part of this change is the time trade off

In some ways, not having to be on the trade show and buyer timeline means that she will have a freer approach to research and development, and that can translate into a reduction in time spent on the business. On the other hand, being at in-person events a lot will mean a lot more sporadic hands-on time in her business in smaller chunks.

It also doesn’t necessarily mean spending less money on her business, but it does give her a greater degree of control over the ROI of what she spends on her business. All big choices like this will mean trade offs. Right now, Jewelry Designer #1 is making a data-driven choice to change her business that will result in profit growth. This is her version of going big.

Jewelry Designer #2 considers wholesale to expand

Jewelry Designer #2 isn’t ready to cut wholesale loose just yet. In fact, she hasn’t even started a wholesale program.

What began as a DTC brand on a website 7 years ago (and Etsy) has been growing steadily. With investments made into branding, PR, and digital marketing, she launched and gained followers and customers right away. Without a wholesale program, she initially felt freer to apply a lower profit margin to her pricing strategy since she didn’t need to worry about marking her work up from wholesale. This allowed her to have competitive prices while still profiting. It isn’t without challenges though. For instance, she doesn’t have enough cushion if a wholesale account placed an order. That would require her to revamp her entire pricing strategy while potentially alienating her existing customer base.

This kind of pricing is also harder for long term growth. If the current clientele is used to shopping with her at her current pricing, will they follow her with a combo of high metals market AND a higher markup to cover her wholesale prices? Then again, maybe she has enough opportunities to sell DTC that she doesn’t need to even worry about wholesale.

Why wholesale is even a goal of hers

She’s been working on her business for 7 years full-time (more years than that part-time), and while she has a decent eComm and email following, she has more work to do to gain visibility, so she is wondering if she missed the window to gain a wholesale audience for her work. Could she be gaining more exposure and cachet if she had a few wholesale accounts under her belt? How many changes to her business would have to happen to accommodate any wholesale accounts? A change to pricing, branding, packaging even? All would add to cost considerations. But she sees how wholesale has benefitted so many brands, so did she miss out by not going big in that direction?

Complicating this choice is that the returns on entering wholesale are diminishing as metals prices stay high and the accounts she meets are acting skittish about picking up new designers. Then there is the cost – $10-12,000 to attend a single trade show with no guarantees of earning an account. If she is just looking at the raw numbers, it looks like that same amount could be spent in ways that would keep earning her new DTC customers. That same amount of money could be 2-4 months commercial rent on her own brick and mortar store – a gamble that would almost certainly earn her custom orders, foot traffic and surprise sales whole also adding to her visibility.

In the end, she opted to open her own store and has decided that if wholesale comes calling, she will consider it at the time, but for now, the numbers don’t lie, and she is better off having her own shop. That way she can exercise greater control over pricing, branding and communication.

Make choices based on YOUR unique jewelry business

In these case studies, both designers are arriving at similar conclusions specific to their businesses (i.e., these choices are not for everyone). That both designers are making jewelry with a mix of gold fill, silver, and solid gold, toeing that line between fine and demi fine matters here, because they both need a certain level of volume in addition to profit to maintain and thrive in their businesses. 

Demi fine jewelry often means needing to sell a lot in order to cover your business expenses. That, plus the fact that increased metals prices affect gold fill and make it less attractive as a low-cost gold alternative (like, it can’t be low cost anymore), means that they have big pricing strategy considerations to make.

Both also offer custom, wedding and engagement – both additional selling points for building more DTC business. All of these facets of their businesses factored into their ultimate choice, and both landed in slightly different definitions of what “going big” means.

It’s no secret that the metals market has made almost every jewelry designer and company rethink how they do business. How could you not? There isn’t a single answer that fits every designer. But there’s no reason not to go big right now, in whatever way that shows up for you and your business.