In order to increase your profit margins you either need to increase your prices or cut your costs. If your business is growing there may be some creative ways to cut your costs. LJS business tutor Anna Campbell outlines five ideas to get you started
Look for alternative suppliers/buy in bulk
When you are first starting in business it makes sense to just buy what you need when you need it. Investing in materials without guaranteed sales is a way to cause serious damage to your cash flow! But if your business is growing it is time to look for ways to cut the cost of each item you make. One way to do this is to look for alternative suppliers for your materials or to buy in bulk.
Start your search with Google. Google has some specialist ways to search that you may not be aware of. Try putting in your search term e.g. ‘silver chain’ ‘headpins’ etc and then click on ‘shopping’. This will bring up web pages where your item is for sale, allowing you to make comparisons in an easier way than trawling through all the websites individually.
Buy in bulk
You can often get discounts if you buy in bulk. Even if your current supplier doesn’t seem to offer these do ask, you may be able to agree a deal. We have plenty of tips for this here.
- Getting casts of your work
If you make from silver or gold each piece can take a long time to perfect and finish. If you think your piece could be a bestseller consider getting a mould made of your original piece so you can get it cast. This can be done at a jewellery casters (do a search to find a local company). A mould is made and then multiple copies of your piece can be cast in any metal you like. There is some additional finishing work once the piece is cast but the overall cost per item should be less than making it from scratch each time.
- Sell through third party websites
If you are selling directly through your website it is likely that this is costing you a high monthly fee even in months where your sales aren’t great. You are also solely responsible for promoting your website and getting traffic to it.
The benefits of selling on these sites are
- there is often a small listing fee then nothing to pay until you sell so no monthly costs (note – some sites charge a monthly fee but those listed above currently do not)
- you benefit from their advertising and getting customers who do searches directly on the site
I sell using etsy and I use etsy mini to embed my etsy shop into my website. This is not as scary as it sounds!
If you are an etsy seller sign in to your account.
Click on your shop, promote, etsy mini. I suggest then choosing the options ‘items from my shop’ and ‘gallery’
There’s a box that says ‘paste this code’. Copy this. You’ll need to paste it onto your website in an html section.
You can see how it looks on my website here – the items look like they are available directly through my website but if a seller clicks on them they can buy them directly via etsy. Selling this way saves me about £120 a year in website merchandise fees. And check out our tips for selling on Etsy here.
- Outsourcing using freelancers
Sometimes when we need an expert to do a task the cost can be high and unexpected extras can crop up that you haven’t budgeted for. If you can hire someone in the family or a friend that could be a good option. However that can cause unexpected problems so my top tip is to try out a freelance site like People per Hour or Fiverr. On freelance sites you can post details of the job you want to be done, for example a logo design, leaflet design, web design, social media support etc. You will then receive proposals from freelancers who are interested in working with you. You can read reviews and look at other examples of their work. I’ve used people per hour many times and have been very happy with the cost and the results. With PPH you make a down payment to start the job, but the person doing the work doesn’t receive the money until you sign off that the work is done.
- Cut the cost of the postage and packing
When we first start a business postage and packing can be one of those things that we forget to factor in – both financially and in terms of time to package jewellery up and take it to the post office. Here are some tips to consider:
- send items in pouches instead of jewellery boxes. They are lighter to ship and don’t take up so much room for the recipient
- use postage boxes that can be sent as a large letter in the UK e.g. these from defenda box
- consider setting up an account with a delivery company e.g. Hermes who can collect parcels saving you time and money
- buy items like jiffy bags, pouches, tissue paper etc in bulk as the cost is generally lower
- keep all your items for posting and packaging organised. Nothing wastes time like not being able to find the sellotape.
We would love to hear your advice on cutting business costs. What has worked for you? Please share your recommendations by making a comment on this post or via our instagram, twitter or facebook pages.
Special Business Week offers
Don’t forget about our special offers on business courses for this week only.
- 50% off the Jewellery Business Distance Learning pack
- 25% off business day classes
- Business Bootcamp £699, usual price £750
These offers are only available on booking made during Jewellery Business Week 21-27 February 2016 inclusive. Call 020 3176 0546.