Do you want to start a jewelry store business and want to know the cost? If YES, here is a cost breakdown to open a jewelry shop and the profit margin / ROI.
In the United States of America, Saudi Arabia, India, Qatar, Kuwait, Switzerland, France, Italy, Egypt and all across the world, both highly and lowly placed people cherish jewelries, hence people go to all lengths to ensure that they adorn themselves with jewelries when they are dressed for occasions.
Without been told, the value and market for jewelries is not going to dwindle anytime soon. As a matter of fact, the jewelry industry will continue to grow because in most climes, jewelries are used as collateral when you go to borrow money from the bank or any lending financial institution.
Jewelry stores fall under the watch and jewelry stores and repair industry and players in this industry sell different types of jewelries and also provide watch and jewelry repair services, including sizing, polishing and battery replacement amongst others.
Firms in the industry also offer other repair and rental services and resell refurbished merchandise and parts. Please note that jewelry repair shops are stand-alone shops that do not sell new watches or jewelry.
Estimated Cost Breakdown to Open a Jewelry Store
When it comes to starting a standard jewelry store business, one is expected to spend the bulk of the startup capital on renting a store facility.
Aside from that, you are not expected to spend much except for purchasing a wide range of jewelries and watches and perhaps repair and polishing tools, paying of your employees and utility bills. In view of that, here are the key areas where you are expected to spend your startup capital on;
- The total fee for registering the business in the united states of America – 0.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the jewelry store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant including writing a business plan – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $46,000.
- The cost for kitchen remodeling (construction of security tight safes, racks and shelves) – $10,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for start-up inventory (stocking with a wide range of jewelries and wrist watches and packaging materials) – $150,000
- The cost for counter area equipment – $9,500
- The cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost of purchase and installation of CCTVs – $2,500
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of launching a Website – $600
- Miscellaneous – $5,000
From the rough estimate as listed above, you would need a minimum of two hundred and ninety – two thousand, nine hundred and twenty USD ($292,920) to establish a medium – scale but standard jewelry store business in any city in the United States of America.
A jewelry store business is a business that has the capacity to make someone extremely rich. This is so because selling a high-worth diamond or gold jewelry attracts a huge profit margin.
For that reason, it is common to find people who are interested in opening a jewelry store, but many of them never get to achieve their dreams because they don’t have the required information especially as it relates to the cost and factors that will likely influence the overall cost of opening the jewelry store.
If you are in that position, then you are reading the right article. In this article, we will look at some factors that have the capacity to influence the cost of opening a jewelry store. Please note that some of the factors we will discuss in this article may apply to you while some may not.
Factors That Influence the Cost of Opening a Jewelry Store
The Location of Your Jewelry Store
The location you intend to start your jewelry store is one of the most important factors that can influence the overall cost of starting the business. It cannot be over-emphasized that the location of a business is key to the success and failure of the business.
Note that the more expensive a city is, the higher the minimum wage, and perhaps the utilities that you are expected to spend. Interestingly, for a jewelry business, if you want to attract sales, then you must be deliberate when choosing your location.
You are expected to choose a location or city with high purchasing power, a city that is secured, and a location that is considered a busy business district with high human and vehicular traffic.
The Store Size
Another major factor that can influence the cost of starting a jewelry store business is your store size. The fact that a larger store will cost more than a medium or small store means that the size of the store you want to rent will determine your budget.
The size will also determine how much you will spend to renovate, furnish, and equip the store, and also pay all the required utility bills.
Your Choice of Inventory
Your choice of inventory is yet another major factor that can influence the cost of opening a jewelry store. Come to think of it, there are different types of jewelry. Some are very expensive, and some are affordable.
For example, a jewelry store that is stocked with affordable jewelry such as costume jewelry, cubic zirconia jewelry, fashion earrings, stacking rings, charm bracelets, etc. will spend far less on inventory than a jewelry store that only sells expensive jewelry such as diamond necklaces, sapphire earrings, platinum bracelets, emerald rings, pearl strands, ruby brooches, gold watches, etc. Apart from that, the quantity of your inventory will also influence the cost of starting your jewelry store.
Interior Design and Furnishings
Another major factor that can influence the cost of starting a jewelry store is your choice of interior design and furnishing. Trust me, getting it right when it comes to the interior design and furnishings of your jewelry store is a big deal, and it will help you attract the kind of customers that can spend big whenever they go shopping.
In essence, if you want to attract high-net-worth customers, then you must be ready to spend a reasonable part of your budget on the interior design and furnishing of your jewelry store.
The Renovation Requirements
The level of renovation work that you will carry out in a store you rent or lease will no doubt influence the overall cost of opening a jewelry store. As a matter of fact, most people who rent stores for the purpose of opening a jewelry store usually make the place secure, suitable, and conducive for their customers.
Some of them go as far as effecting structural changes, changing the flooring, the walls, and other modifications that will create appealing aesthetics.
The Required Licenses and Permits
Another factor that can influence the cost of opening a jewelry store is the amount you will spend in obtaining the required licenses and permits. Interestingly, there are different licensing requirements for different types of businesses, and they attract different costs.
But basically, if you are planning to open a jewelry store in the United States, then you must make provisions for a business license, retail sales permit, zoning permit, signage permit, health department permit, fire department permit, building permit (for renovations), occupational license, resale certificate, and alarm permit (if applicable).
Your Staffing Cost
If you are planning to open a standard jewelry store, then you must make provisions in your budget for recruiting and training your staff.
Staffing cost is a significant cost that can influence the cost of opening a jewelry store. Trust me, in order to operate a standard jewelry store, you would need to hire key employees such as sales staff, possibly a gemologist or jewelry expert, and security personnel.
Marketing and Advertising
Another factor that can influence how much it will cost you to open a jewelry store is the amount you are expected to spend on marketing and advertising.
Even though there is no hard and fast rule when it comes to marketing and advertising your jewelry store, it is important to note that there are experts who can help you design and implement marketing and advertising strategies that will help you attract the type of customers that can patronize your jewelry store. Of course, you know, you are going to spend money to get the results you want to achieve.
The Required Security Measures
Come to think of it, no entrepreneur opens a jewelry store without having adequate security measures in place especially if the store is selling expensive jewelry. In essence, the amount you are expected to spend on security measures for your jewelry store is a significant cost that can influence the cost of opening the jewelry store.
Part of what you are going to consider are surveillance cameras, alarms, secure display cases, and possibly even security personnel. Trust me, in order to get the best when it comes to security measures, you must be ready to spend a premium.
The Required Insurance Policy Coverage
Another major factor that can influence the cost of opening a jewelry store is the amount you will spend in purchasing all the needed insurance policy coverage. Interestingly, no entrepreneur or investor opens a jewelry store without having all the necessary insurance policy coverage in place.
This is so because jewelry stores are always a target for burglars. Protecting your inventory and the business is a wise decision, but it always comes with a cost, and the cost is going to be a significant percentage of your budget.
Utilities and Operating Expenses
Lastly, another factor that will influence the cost of opening a jewelry store is the amount you are expected to spend as it relates to utilities and operating expenses. Interestingly, the amount you are expected to spend in this regard will be based on your preferences and the scope of your business.
But over and beyond, you are expected to budget for regular operational expenses and utilities such as electricity, water, heating, cooling, and cleaning.
All the factors listed above are part of what will influence the cost of opening your jewelry store, but it is also important to note that if an entrepreneur decides to open an online jewelry store, the factors listed above might not influence their startup cost.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a jewelry store to go to the market or directly contact sellers of the items (the types of jewelries and watches et al) they would need to get the real time prices of these items.
The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.