|
(Sterling silver with garnet beads)
By Arizona Bead Dog
Arizona Bead Dog offers 5 tips to turn your jewelry-making hobby into a micro-business:
Tip 1: Know who will buy your jewelry.
▪ Friends and family. Will you have home jewelry parties?
▪ Public craft fairs. Which ones? How much is the exhibitor fee? Do you have a table, a cover for it, display-ware, a tent canopy?
▪ Online sales. Where? (eBay? etsy?) Do you have equipment to appear online (a digital camera and a computer)? Will you create your own website?
▪ Retailers. Do you have stamina to visit each store? Can you take rejection? Will you consign (wait to get paid until the item sells)?
▪ Trade shows (the Oasis Gift Show is Arizona’s big one). Look in your state; what are the show’s fees and requirements? Will you take orders for your jewelry? Do you have enough inventory?
Tip 2: Know how much money you can throw away.
▪ All business involves risk. How much money can you safely risk? If you don’t sell anything, can you give your jewelry as gifts? If so, you may have less risk.
▪ Honestly appraise your artisan skills, temperament, and market. Is your jewelry as good or better than what’s out there? If so, you may want to risk more; if not or you’re unsure, risk less. Are you detail-oriented and goal-driven? It may be smart for you to risk more with these traits. Will your customers buy cheap base metal or more expensive sterling silver? Risking more for what your customers want is the better strategy.
Tip 3: Know your product.
▪ Know what you’ll sell: Necklaces, earrings, bracelets, anklets. Decide now; otherwise, you can’t budget your stake money.
▪ Know what goes into each product: Bead wire, toggles, silver, head pins, ear wires, etc. What will a single bead strand make?
▪ Know how much you want to produce, then calculate your needs, estimate your costs, and prepare a shopping list.
▪ Allow for additional expenses, and choose wisely. Must you order business cards, or can you print a few instead? Do you need a beading tray, or is your kitchen table with a towel on it sufficient? How many bead boxes will you need? Product tags? Beading tools?
Tip 4: Consider your asking price.
▪ Rethink the idea of selling at “retail” prices—you don’t shoulder the overhead that retailers do. The jewelry market is competitive.
▪ Forget about your time. The best rule: make your product beautiful no matter how long it takes. Creativity is competitive, and low-wage earners the world over produce beautiful, inexpensive jewelry.
▪ One pricing formula for a no-overhead micro-business: Charge no more than 3 times the product’s actual cost. Your time is compensated with this formula. A necklace as example: beads cost $5, the toggle $2, the wire negligible, the additional sterling beads $3—the necklace should be priced at no more than $30. But depending on the beads and design, it may sit at $30, but sell at $20. You’ve still doubled your money. Retailers double or triple your selling price—will the final customer pay that much? Will you get re-orders?
▪ Accurately assess your "overhead," such as air fare, hotels, rental cars. Give thought to whether increasing the formula to 4 to 6 times the product's actual cost will better account for your expenses.
Tip 5: Pay your taxes.
▪ Business license. Most states and municipalities require a business license to collect taxes; the buyer-only gem shows require your tax id number. If you retail directly, you must pay or collect the taxes. If you wholesale for resale, you don’t need to (in Arizona, anyway).
▪ Keep track of sales, expenses, purchases, mileage, and other business costs. Calculate the cost of your inventory. At tax time, you’ll have everything you need to report your taxes.
|
