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17 September 2020

How to Start an Online Jewelry Store?

In our article, you will find detailed instructions on how to open your own online jewelry store. We will tell you about the main features and nuances of the market. We will show you how to choose a niche, form an assortment and find suppliers. We will demonstrate with examples how to make your brand unique.

Studying the features of the market


Veblen effect. If your store sells premium jewelry (very expensive items), then you should be aware of the conspicuous consumption paradox, discovered by the American economist Thorstein Veblen. The paradox is that when goods and services that are inaccessible to most ordinary consumers due to their high price are consumed, there is an inversely proportional relationship between demand and price. In other words, if prices are reduced, then demand will not grow, but will fall (and vice versa).


Demand behavior according to the Veblen effect. Source

The Veblen effect (aka the Veblen paradox, or the snob effect) only applies to luxury goods or services (known as Veblen goods), such as luxury cars, expensive vintage furniture, art, premium food, and exclusive jewelry.

Veblen saw the reason for this behavior of people in three components:

This is important to know, because these are the triggers that need to be pressed when advertising expensive jewelry, not that they are beautiful - to the non-expert, fake glass diamonds look just like real ones. For example, look at the advertising for Vertu phones: the brand always focuses on the fact that their product is Luxe, Exclusive, Premium, Unique or Extraordinary.

The minimum level of qualification. To be a successful jewelry seller, you must understand the specifics of the market, terminology, nomenclature, prices and other nuances. To do this, you need to either have extensive experience in this industry, or read a lot, or be trained by specialists. Now this can be done without leaving home.

Here are some resources that can help you with this:

Choosing a store business model


Production. Launch of a store for the sale of works of private craftsmen who make exclusive jewelry to order or implement their own design ideas. This model is suitable for experienced craftsmen or competent managers who can set up outsourcing production and organize distribution channels. This requires an understanding of jewelry manufacturing processes, managerial skills and a good knowledge of marketing.

Advantages of the model with its own production:


Dropshipping
. Wholesale jewelry purchases from Spocket, Oberlo, AliExpress or other sites and their reselling in your store. If you do not rely on expensive products, then everyone can open such a business. Trading in precious stones and metals will require certain skills, for example, finding reliable suppliers, negotiating dropshipping contracts and establishing safe delivery from the wholesaler to the end customer.

Benefits of the dropshipping model:


Resale
. The simplest form of doing business, which involves buying jewelry piece by piece, for example, on Amazon, Greylisting or LetGo, and reselling them at higher prices on your website or social networks. Some of these vendors compose multiple pieces and sell them as a kit, usually with a 100 or 200% mark-up.

Benefits of reselling individual items:


Marketplace
. Creating a multi-vendor marketplace that works like an online board like Etsy or Amazon, only with a focus on jewelry. Usually, for the development of such a web platform, an outsourcing company is hired, which takes over the technical and organizational components of the website and application development process, while you will deal with general management and marketing.

Advantages of a jewelry marketplace:

Finding a technical partner is described in the article: «How to choose a developer company».

Service shop. You can also organize a workshop that will provide services for the repair and cleaning of jewelry, resizing rings, replacing or inserting dropped gems, engraving, and more. It can be a separate business or an additional service in production.

Advantages of a jewelry store:

Choosing a niche for a jewelry store


The jewelry market is one of the hardest to start a new business as it is very old and profitable and as a result highly competitive. It is dominated by manufacturers such as Swarovski, Pandora, Signet Jewelers, Richemont, LVMH, Tiffany, as well as marketplaces such as Etsy, eBay and Amazon. It is difficult to compete with them directly, so new stores tend to focus on some narrow niche. This way you can stand out from the competition through niche store design and personalized marketing.

To find a promising niche for an online jewelry store, you need to choose a general direction of business first, and then find a product category that is poorly represented in other stores, but at the same time is in demand.

General direction. Will your platform sell fashion jewelry (bijouterie), fine jewelry, or anything in between? Each such category implies an emphasis on different materials, price points, customer profiles and manufacturing processes.



Specialization. After choosing the direction, you need to understand what kind of products you will sell in your store: all at once, men's jewelry, gift ideas, jewelry in the form of cartoon characters, jewelry for metal fans, wedding rings or something else.

There are several ways to choose your specialization:

We develop a website for an online store




Shopify has quite a few ready-made themes for jewelry stores


After you understand what exactly you will sell, you can start developing the site. This can be done in several ways. Easiest - WordPress Themes. With their help, you can quickly create an online store website and start selling. But, such a site will not differ from competitors, and it may have problems with reliability and security.

Another option is to launch a store based on an e-commerce platform like Shopify, SaleHoo, or BigCommerce. This approach is similar to using WordPress, but in this case you will have more options for customizing the design and functionality of the site. In addition, they usually have analytics and marketing tools built in by default.

For example, here's what a Shopify jewelry store might use:

Choosing jewelry suppliers




The easiest option is to search on Amazon, eBay, Alibaba, AliExpress and other major marketplaces. Each such site has a special section with a listing of suppliers by category, some have a list of suppliers that have passed a special check, for example, Alibaba Gold Supplier.

Another option is to search online supplier directories such as SaleHoo, Worldwide Brands, or Wholesale Central. With the help of such platforms, you can select the company you need by filtering out all candidates using a variety of filters. There you can usually contact the supplier and place an order.

Develop your brand


Brand name and logo. If you are reselling jewelry, then this is optional. However, if you are engaged in production or the store sells jewelry of the middle and / or expensive segments, then this is a prerequisite. This will help you stand out from the competition, increase brand awareness, and build stronger relationships with your customers.
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