Due to the high costs of manufacturing inside the United States, many jewelry companies, even smaller operations, choose to utilize foreign labor. But, the use of that labor begets travel expenses and a time commitment that may or may not be beneficial to your business in the long run.
Ecowrist is currently produced out of two facilities in South America. With respect to production costs, Gandy says that the cost of producing Ecowrist overseas is probably "400-500 percent less" than it would be back home. "We tried to do some stuff here, but it became so expensive that it didn't make sense for us," he says. "It would have been a hobby for us."
Although manufacturing costs are undoubtedly cheaper at the South American facility that the company uses, traveling to monitor the production process, which averages around once every other month for up to a week at a time, incurs hefty travel expenses. As a result, Gandy and Hamden are looking to bring Ecowrist's production back to the U.S.
Delgado, a native of Peru, handles her manufacturing operations in her home country. "Although it's relatively 'cheaper' to make it in South America, there is a lot of ground you have to break in terms of quality control," she says, describing how she often has to train her Peruvian team in rudimentary aspects of business, including sending emails and opening PowerPoint presentations. "Those are a lot of man hours that translate into costs."
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How to Start a Jewelry Making Business: Is a Store Necessary?
In 1995, Stacey Ford opened her sterling silver and fashion jewelry store, Amaya Designs, in Philadelphia with a partner. Eleven years later, she closed her doors for good. "In 2006, we really started noticing a drop in sales. People were really, really struggling, trying to make ends meet," she says. Since then, she has chosen to focus her attention on selling at outdoor markets and jazz festivals. She is currently based out of New York City and continues to supply businesses in Philadelphia with her products. "I would say, in today's climate, I would do more markets [instead of opening] a store. The cost of renting a space, especially in New York, is outrageous," she says. "I don't see how anyone sees a profit when you're paying $5,000-$6,000 a month for rent only."
While a brick and mortar institution is undoubtedly more expensive, markets and fairs carry their own respective price tags. Ecowrist's booth in Manhattan's Columbus Circle Holiday Market set Gandy and Hamden back about $4,700 which, explains Gandy, averaged out to about $200 a day.
Delgado says that at certain markets the location of your booth depends on how much you will have to pay, if your application is even accepted at all. "If you're doing street fairs, for instance, it's much, much more competitive because there is a lot of jewelry. Sometimes you can't even be allowed a space because it's like, 'we don't have [anymore] space for jewelry.'" With respect to trade shows, Delgado says that space to showcase in the handmade division is very competitive in New York City due to the high amount of vendor applications.
Delgado has chosen not to open a store for Mujus. She intends to create an enterprise based on selling at fairs while focusing on catering to the wholesale market. "The marginal dollars that you get on wholesale, I think, is a little bit more reliable [in terms of] business, and you don't have so many little running costs on a daily basis," she says.
Doyle, who has maintained her store for 10 years in one of Manhattan's most expensive real estate districts, cautions entrepreneurs about opening a store outright in today's economy. "I think that you need to keep your fixed expenses as low as possible. The rent is a huge fixed expense. You have to learn what your market is, which you don't necesarily just know," she says. Doyle partially credits the success of her storefront to the fact that rents were cheaper when she first opened her doors, and that the cost of gold was less than half of its current going rate.
In absence of a storefront, having a strong online presence becomes essential for entrepreneurs. Mujus's website is currently under construction due to Delgado's desire to craft a unique online image. "My challenge with my website is that I wanted something perfect and my quotes were around the $10,000-$15,000 range."
Ricciardelli has purchased a domain name, but her Etsy store, which was free to setup, is currently the go-to spot for Mama Can't Sing online. Ford maintains a website for Amaya Designs along with a Facebook page and says that those two web entities facilitate roughly 20 percent of her total sales.
Although Ford's business has fared well without its former storefront, she thinks that a real store should be the ultimate goal for jewelry store owners. "My suggestion would be to do markets and get your name out there and develop your email list and customer base," she says. "Then jump into a store and let people know, 'I'll no longer be [at the fair]. I have my own brick and mortar.'"
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