One of the first things I (luckily) learned when I started my wholesale sterling silver jewelry business, was how not to go broke quickly. I remember a friend had also just started her wholesale jewelry business struggling to make money. Let's say she purchased $250 worth of jewelry and sold it for $500, she would immediately pick up the phone and order $500 worth of jewelry. It would almost burn a hole in her pocket. And what happened to the cost of doing business? She didn't take any of it into account. Within a year, sadly she closed her doors .
Keeping a running "Open to Buy" tally is vitally important to your new sterling silver jewelry business or artisan fashion jewelry or any business. And it's a great way to start your company possibly avoiding losing money or going broke. We'll take a simplified look at this. Let's assume you are using a "keystone" markup to price your jewelry: you are buying a sterling silver bracelet for $10 and selling it for $20 or doubling the purchase price, "keystoning" the bracelet. You buy a total of $1000 for your upcoming jewelry show and sell all of it for $2000 - wouldn't that be great! So, you purchase $1000 more and keep the other $1000 for expenses incurred.
Part 2 of How Not To Go Broke... continues tomorrow.
