Sources state that the jewellery market has hit the Rs 5,601 billion mark at the Indian market in 2020. One of the fastest-changing sectors with every passing year, the gems and jewellery industry has shown a smooth growth over time. Contributing 29% of global jewellery consumption, India's gems and jewellery sector is one of the largest in the world. Reports suggest that this jewellery market might see a rise of 12% in the Indian market by 2021, with many new players entering the market.
Current jewellery industry statistics in India are as follows:
- The low tax ranges from 0.25% to a maximum of 3% in some cases.
- High demand for more artistic and expensive products with multipurpose use, like investment, gifting purpose, casual buying and auspicious occasions.
- The jewellery industry contributes more than 15% towards merchandise export, indicating a healthy demand in the house. It is expected to be everlasting and ever-growing.
- Heavy cash flow in the jewellery sector
With tremendous growth opportunities, this market is already catching everyone's attention and would welcome many newcomers by 2021.
The market provides various business options in terms of jewellery distribution:
- Jewellery designing
- Fashion jewellery wholesale and distribution
- Diamond merchant
- Jewellery wholesaling
- Oxidised jewellery wholesale
- Jewellery distributor
- Imitation jewellery wholesalers
It is rightly said that money is the lifeblood of any business, and it is valid for the jewellery business as well. Following are the important points one must keep in mind while becoming a wholesale distributor of jewellery:
- For wholesale jewellery, one needs to have adequate funds required to keep up a sufficient stock not only for metal but also for gems, machinery, hire help and all the necessary equipment.
- The entrepreneur should have running information about the ongoing global trend of the jewellery market, designs, and updates.
- The person willing to start the jewellery wholesaling, imitation jewellery wholesale, or artificial jewellery wholesale should have operational knowledge of their products like manufacturing, administrating cost, security cost, purity of the product, and all other related stakes.
- Though it sounds very attractive and exciting, the jewellery business has a lot of concerns. One will have to spend a hefty amount on security, starting from cameras, expensive lockers to manual safety and way more.
- The jewellery business is among the first lines that come under the government watch radar due to the nature of business. One also has to make sure that they do not enter any illegitimate transaction and have healthy accounts ready to be presented to the government agencies at any required time.
- Those trying to get into the jewellery industry also need to make sure that they do not become victims of any mishap like a fraudulent customer theft, being sold something illegal by the customer or becoming a part of the corruption towards any government agency.
Even after all this, one cannot deny that this business provides endless opportunities to make money, a big network circle and maybe live a dream life. But the question remains the same.
Why should one start a jewellery business?
The following are the reasons why one should prefer starting a jewellery business over any other business:
1. Expected market growth
Sources state that the jewellery market in India is expected to grow by at least 12% by 2021. The average growth of the jewellery market is expected to be more than 15% globally. This tremendous market growth percentage is a big reason for newcomers to enter the market and earn huge profits.
2. Huge profit-making opportunity
Every aspect of the jewellery business is profitable. The jewellery business gives tremendous money-making opportunities to anyone who wants to be a part of this business through sales commission, safely transporting jewellery from one place to another, etc.
3. Never-ending demand:
Jewellery is a business with a never-ending need. It is one of those few businesses that offer more than one reason for an ordinary person to buy. People buy jewellery for investment, gifting, buying jewellery for special occasions, and many more, so there is never-ending demand in the jewellery business.
4. Appreciation of stock
Stock is safe as the jewellery stock rarely gets depreciated. Stock in the jewellery business is very liquid and can be turned to all-cash easily. History has proven that gold, the primary material or input for this business line, has been a highly appreciating investment and a great inflation-beating mechanism.
5. Tremendous growth opportunities in this business
The jewellery business when done at any level, be it small-scale trading, manufacturing, retailing or distributorship, involves high monetary transactions that lead to substantial cash flows. It also gives an ever-growing opportunity to the business.
Finally, when you know all about the jewellery wholesaling business, what are you waiting for? This is the best time to enter and conquer the market. The government and private sponsorship, cheap rate funding, and non-financial boosts by the government have ensured that now is the best time to start this business and shape up your business plan. Based on pure analysis of the jewellery wholesaling and distribution pros and cons, it can be said that it is one of the business lines one can positively pursue, but only after thorough research, planning, and discussion with stakeholders.
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Q. What are the different ways of distribution in the jewellery wholesaling industry?
Ans. There are two ways of distribution that a jewellery wholesaler can opt for:
- Business to Business (B2B): In this type of jewellery distribution, the wholesaler sells the jewellery to jewellery retailers who sell it to customers. This method often involves bulk purchases which allow for higher margins. The number of retailers to deal with is comparatively lesser than the retail jewellery business, so the customer service needs are minimal.
- Business to Customers (B2C): In this type of jewellery distribution, the wholesaler directly sells it to the customers through physical stores, online websites, third parties, etc. B2C distribution requires a small storage capacity which means fewer risks involved. The profit margin in this type of distribution is less than B2B jewellery distribution.
Q. What types of jewellery items can be used for distribution in the wholesale business?
Ans. There are various types of jewellery pieces that are available in the market. The price, quality, and demand for all of these jewellery pieces vary widely, so it is advisable to select the jewellery pieces with higher local demand and offer good profit margins. Some popular types of jewellery pieces that the customers usually buy are:
- Oxidised Jewellery
- Costume jewellery
- Precious metals like silver and gold
- Fashion jewellery
- Fine jewellery
- Artificial jewellery
- Imitation jewellery.
All of these jewellery items differ in terms of prices, quality, and demand. For example, costume jewellery is the cheapest of all, but the most demanded jewellery item, while fine jewellery is the most expensive, but its demand is limited.
Q. What are some tips and tricks to effectively manage my wholesale jewellery business?
Ans. The following are some tips and tricks to manage a wholesale jewellery business effectively:
- Select the best business and distribution model, keeping in mind the initial investment you can make in the business.
- Try keeping yourself updated with the latest fashion trends to provide customers with the best and latest jewellery items.
- Try adding a local touch to jewellery pieces as visitors and tourists often demand local jewellery pieces.
Q. What information should a jewellery business plan include?
Ans. A jewellery business plan should include the following information:
- Jewellery sales and marketing plan
- Details about various products and services to be offered
- Customer needs that your jewellery business will satisfy
- Employee hiring strategy
- Strategy related to investments and finance