Questions to Ask Yourself When Partnering with a Wholesale Jewelry Supplier
If you’re considering partnering with a wholesale jewelry supplier, there are some things you need to know.
Maybe you’re wondering what a wholesale jewelry supplier even is or why you’d need one.
When you start a jewelry business, you’re not a hobbyist anymore! You have to start finding ways to improve your margins and increase profits.
There are lots of perks to buying your supplies wholesale other than the obvious cost benefit. You have access to a huge selection of materials, beads, and stones.
But not all wholesale suppliers are created equal!
Lots of new designers get into trouble trying to save money by going with whoever is the least expensive.
This can actually cost you money in the long run because if you get backordered you might lose out on sales and disappoint your customers.
Here are some questions to ask yourself before getting started.
What’s the benefit of buying supplies from a local craft store vs. a wholesaler?
Cost and reliability are the biggest benefits of buying from a wholesaler. Your local craft store can be great when you’re starting out, but you have to think about what happens if they run out of something you need.
As far as cost, you’ll probably save at least 40-60% by partnering with a wholesale jewelry supplier. That’s worth doing some research! Wholesalers will have minimum order requirements, though. They will also have minimum pack sizes so ask each source about their requirements and make sure you’re ready to take on that much inventory.
Online businesses specializing in the trade have closed some of the gap on retail vs. wholesale pricing for materials, but there is a big range. Savings compared to this group are closer to 10-30%.
Free shipping offers can be decieving.
Sites that offer subsidized shipping have higher product prices. That works in your favor if you are buying at small volume. But, once you need larger quantities of materials, the shipping factor added into the item price list quickly exceeds what you would pay if you just paid for shipping.
This is a big tip as you move out of the consumer purchasing mode and into business purchasing mode. Make sure you take all your costs into account. Sometimes the free shipping is actually costing you more when you look at the big picture.
Working with a wholesaler gives you peace of mind that you’ll have the materials you need to stock your inventory and fill orders. At least, that’s what they’re supposed to do.
Not all wholesale jewelry suppliers can be trusted. Which is why you need to ask yourself this next question.
Is this supplier reliable?
Reputation is really important in our business. It’s sad, but there are dishonest companies out there that do not accurately disclose what they’re selling. Some supply businesses at trade shows don’t even have websites.
If a supplier isn’t disclosing their location and who they are, that’s a big red flag. It’s surprising how many companies don’t meet this low threshold.
Our Diamond Insiders is a great place to get referrals and ideas for who is a reliable company. You can also checkout Halstead Inc, because they're a trusted partner of Flourish & Thrive Academy and they're great with their customers.
Secondly, look for transparent product disclosures on websites and printed materials.
It should be easy to find detailed information on product pages like material, sizes or weights, and nation of origin. Disclosing all the relevant facts is a responsibility in the jewelry industry.
If a website calls something “silver” that does not necessarily mean sterling silver, for example. Sometimes, it just means the color. Check for full information. If you can’t find it, move on to another supplier.
Ask about any quality control programs they have in place. At Halstead, for example, they run random lab tests each quarter to verify that precious metal alloys from different sources meet tolerances. If you’re considering a supplier that doesn’t do quality control, they might not be very reliable.
What if something goes wrong?
Communication with your suppliers is essential when something goes wrong! Human and machine errors occur in every industry, it doesn’t automatically make a supplier an unreliable business partner.
Bad batches are rare, but they happen. Sometimes, manufacturers do not know they have a small bur on an item until clients bring it to their attention. Reputable companies will make it right as quickly as possible.
Review your suppliers return policies before ordering, especially custom items or large lots. If an item meets measurement specs as promised, but you it just won’t work for you, it is still usually possible to return items within a reasonable time frame.
How do I choose the right supplier for my business?
There is no one-size-fits-all when it comes to partnering with a wholesale jewelry supplier, which is actually a good thing. That means you’ll get a business partner who understands your unique needs. Suppliers should be long-term business partners, not just transactional bargains.
Your supply chain relationships need to be some of the strongest connections your business has. They’re based on trust, open communication, and mutual understanding.
But, the exact fit formula will vary for everyone. Ask a potential supplier these questions to see if they’re a good fit:
What kind of customers do you work with?
They should not give you names for privacy reasons (big red flag if they do, by the way); but, they should be able to describe the profile of their typical accounts so you can determine if you’re in the right place. Are they hobbyists? Mass retailers like QVC? Or, studio artist businesses?
Who can I talk to if I have a question?
Sourcing for business requires more communication than your standard online purchase. Find out how easy it is to get a competent person on your side via phone, email or text. If you can’t get a straight answer to this simple question pretty quickly, don’t expect great service when you hit an obstacle.
What is your company most known for?
Every company has strengths and weaknesses. The response is probably going to focus on strengths, but that gives you vital information on the product lines where the company is most competitive. Or, you can get valuable insights into a company’s core mission and values. Again, think of it as an interview. This question can get you some great insight.
How do you compare to other wholesalers?
Ask the direct question and be specific if you’re trying to decide between two. Service professionals talk to clients all day and they hear a lot of useful tidbits. Of course, they will respond in favor of their employer, but again the response will contain direct apples to apples comparisons that they have heard through service interactions with other accounts.
How do I get a good price without choosing a shady partner
The only way to know you’re getting the best value is to constantly quote and compare, which is pretty labor intensive. There is no one source that offers the best pricing on the full portfolio of suppliers across the board.
Plus, companies in the supply chain are constantly analyzing and tweaking product offerings so the cheapest source last year may be much more expensive this year. It’s a full time job to stay on top of it all.
While price is important, the context of the quantities and speed you need in your sourcing is almost more important. Yes, your friend who buys kilos of an item at a time gets a better price than you do if you only use 100 grams a month.
But, if you stock up on materials just to save money you might end up sitting on a ton of extra supplies you’ll simply never use. Don’t tie up all your cash flow trying to save on materials.
These are tough lessons that most small businesses learn through painful trial and error.
I certainly did. Price is indeed very important. But, flexibility, communication and rapid response are important too.
A better approach is to establish relationships with several suppliers you trust who offer consistently good pricing. Have multiple sources for core items, you never know when something is going to get backed up.
Remember, there’s always room to negotiate. If another supplier is offering a better price, communicate that to your supplier. If you have a good relationship and you really want to stay with them, show them the quote you got from another supplier and give them a chance to match it on your future orders.
Margins at the supply level are small, so discounts are usually volume based. Or, accounts of a certain size may access invoice level discounting.
How do I get started partnering with a wholesale jewelry supplier?
There are a few documents you’ll need to get started as a legitimate wholesale account with a supplier. Research everything for your specific state or country and follow any payment terms your supplier has. There is no one answer to this question; but, let’s explore some of the common elements in account qualification.
Resale License, Transaction Permit etc
Each of the 50 states has a different name and protocol for this business document. Some states don’t require any document at all. These documents aren’t a permission slip to buy wholesale. Usually, these permits allow you to collect and pay sales taxes.
Your state wants to make sure the right tax is collected and paid, and that no one is getting taxed twice. Search for “business license” or “revenue department” in your specific state and see what comes up.
Storefront Address and Photo
Wholesalers used this screening method for many years before the world of ecommerce took off. It was most common for companies that needed to establish sales territory proof for their sales rep commissions or territory exclusivity contracts. The internet has obviously changed everything. Some wholesalers ask for you to give your address.
Trade References or Invoice Copies
If you are applying for Net 30 terms, you are essentially applying for revolving credit as short-term loans with the supplier as the lender. Suppliers will check you out thoroughly. Most will run credit checks on you and your accounts in addition to screening your account with other suppliers. Note that they are looking for trade references that already extend credit to you on these applications.
They will verify your payment history to make sure all invoices are paid on-time and in-full. There are some shady businesses out there that don’t pay on time. Your supplier wants to make sure you’re going to be reliable, too.
If you’re applying for terms, be sure to read the fine print. Most terms agreements come with significant penalties. Take your payment obligations seriously and know exactly what you are agreeing to in your terms of sale.
Proof of Identification
Suppliers may request images of your driver’s license or passport along with an identification number such as your Federal Employer ID or Social Security Number. This request is becoming more common because of Anti-Money Laundering (AML) legislation mandating documentation and screening of precious metal buyers above a certain annual dollar threshold.
It is also increasingly common to verify credit card number ownership in our new era of online fraud.
What does Halstead offer?
One reason we partner with Halstead is because of the great service they provide their accounts. They bend over backwards to get them the products and information they need.
They also offer a great deal of supporting content to our clients to help them navigate important business issues, learn new techniques and stay up to date on industry trends. Like Flourish & Thrive Academy, Halstead wants to be a full-service resource for small jewelry businesses.
In terms of order qualification, they require a $100 minimum order on each transaction shipped to the US or Canada and a $250 minimum order for transactions shipped to other countries. Pack sizes depend on the item.
Pricing is discounted by volume tiers. Let’s use an item sold in a 1pc minimum pack quantity, for example. There are then discounts when you buy 10 pcs, 100pcs or 1,000 pcs. On sterling silver items those discounts are usually 15%, 22% and then 24% off the base price.
You can see prices and discounts by volume on the detail pages for each item on their website. On transactions over $2,000 USD, clients receive the maximum discount tier on every line of the invoice.
If you live in Arizona, they require you to provide a state TPT License and form 5000a to purchase. Buyers shipping to other states and countries are not required to provide that documentation.
Once you make the decision to start a jewelry business, it’s a good idea to look into partnering with a wholesale jewelry supplier because of the huge cost savings.
Approach sourcing more like interviewing a long-term business partner instead of just a sales transaction. Get to know the company, their way of doing business, and the people who work there.
Your supply chain is one of the most critical factors in your success. It’s worth investing some time and effort in every piece of the supply chain from the beginning so you avoid a headache down the road.