Generally, jewelers buy gold/ready-made ornaments in bulk and at the current market rate in the form of gold-bars. They stock this gold and sell at a time when the prices have increased. Normally, gold rates increase and they make money selling it to you at a higher current gold rate than what they purchased it for.
Pure gold is currently paying about $1250 per ounce. By going through the math, this means that 10 karat gold will “scrap” at about $16.35 per gram. And 14 karat gold will “scrap” at $23.50 per gram. Meanwhile, the average annual salary of Jewellers is $42, 310. Their salary can also be as low as $22, 060 for a newbie with no experience to over $66, 110 for jewellers with tons of experience under their belt.
To successfully start this business, you need to create a Business Plan and produce a Sales and Cost Forecast so you know exactly how many pieces of Jewellery you will need to make and sell per month to achieve your financial target. You also need to create your marketing plan to ensure that you reach those targets.
When developing your marketing plan, you need to factor in all seasonal peaks and troughs of the year that will impact upon your sales. You will also need to have adequate marketing activities in place, well in advance of the seasonal periods, to boost your sales during the high demand seasons and to encourage new sales during the leaner periods.
One unique thing is that in today’s digital media world, marketing and selling online has never been easier. Although it is advisable for jewelers to go to events to sell their handmade jewelry locally, you also need to optimize the opportunities you have to sell jewelry online from home.
Always remember that starting and running a profitable jewelry business involves having a clear vision of how much you want to generate in sales per annum and understanding how many pieces of jewelry you need to make and to sell to make that happen.
You need to know how many pieces of jewelry you need to make and sell per year and then break it down by month, looking at the seasons, to see how you can optimize your sales during those busy seasonal periods.
Common Ways Jewellers Make Money
One of the pronounced ways a jeweler makes money is by selling more jewelry. Each jeweler will usually receive an hourly rate and a commission on any sales over a predetermined amount.
Note that by selling above the predetermined amount, a jeweler can earn a considerable income. The only way to get a better deal is to negotiate with the owners of the jewelry. You need to show them results but if you are a performer, they will be willing to give you a better commission. Aside the above mentioned revenue stream, there are other ways jewellers make money.
Charges for Gold/ Diamonds/ other Precious Stones
Note that this is the price and quantity of the actual gold/diamond/other precious stones used in the jewelry. It is calculated based on the gold price prevalent on the date of purchase multiplied by the weight of gold you’re buying.
This is actually the charge of converting gold into jewelry. It includes the cost of other materials used in making the jewellery as well as the labour charges. Note that this charge tends to vary from jeweller to jeweller, and is not fixed. It can be a flat rate per gram or percentage based. This is the charge where most of the jewelers fool you and charge exorbitantly. Also, this is where you can negotiate.
While making jewelry, jewelers claim that some of the gold is wasted in the process. Howbeit, this cost is transferred to the customer, and just like making charges, even this varies with every jeweler and is also the area where your jeweler can charge extra since there is no proof as to how much of gold was actually wasted.
Also note that this is generally charged on a percentage basis. Some jewelers may not even charge this and rather include the same in making charges, by charging the same at a higher rate.
This is a mandatory tax levied by the government on the sale of gold. It is calculated on the total of the price of gold, making charge and wastage charge. It is non-negotiable.
Just like it was stated above, Jewellers make money from buying gold and ornaments from the public. When you sell your gold to a jeweller, that jeweller is likely going to sell those same metals to a large-scale depository or wholesaler. The wholesaler makes a profit when buying from your jeweler and your jeweler makes money when buying from you.
Another way to earn more money as a jeweler is to take upgrading courses that will help you improve your credentials. But if you want to maximize your earnings, you should consider starting your own jewelry shop. This is not something you should take lightly but since you own the business you could, in theory, take the proverbial lion’s share of the profit, provided you have competitively priced jewelry that people want to buy.