The Hidden Costs of Operating a Retail Jewelry Store

Operating a retail jewelry store is no easy task. In addition to knowing and identifying the different types of metals and gemstones, along with their purity, you'll also need to build strong customer relationships to keep people coming back. You can offer top-of-the-line jewelry at rock-bottom prices, but it's not going to benefit your business much unless you develop lasting professional relationships with customers. Of course, you'll also need the resources and capital necessary to keep your jewelry store business open. In this post, we're going to take a look at some of the 'hidden' costs of operating a jewelry store.

Security / Theft Prevention

One expense that many first-time jewelry store owners seem to overlook is security and theft prevention. Installing a video surveillance system, security systems, ceiling mirrors, and glass display cases in your store are all excellent techniques for reducing the chance of theft. It's not something jewelry store owners like to think about, but theft is a real possibility that can force your business into the red zone if you don't take the necessary precautions. Jewelry store owners should think of security and theft prevention as an investment that will pay off in the long run.

Insurance

Of course, insurance is another major expense in operating a retail jewelry stores. While all retail businesses need insurance to operate, it's typically more expensive in retail jewelry stores. This is due in part to the fact that a jewelry store's inventory is more valuable than a clothing or grocery store. If a fire, flood or theft were to wipe out your business, the insurance provider would compensate you for your loss.

It's recommended that jewelry store owners shop around for insurance from multiple providers. Never choose the first policy you come across, as you can likely find a better one for cheaper. Purchasing insurance for your retail jewelry store is a big decision, so take your time to find the policy that's right for you.

Inventory

Most retail jewelry store owners realize that inventory is a necessary expense with this business; however, what they may not realize is the true cost of inventory. Depending on the size of your store, and its particular niche, you may end up spending several hundred thousand or even $1 million+ on inventory alone.

If you're struggling to pay for all of the necessary expenses associated with running a retail jewelry store, don't be afraid to reach out to some banks and financial institutions in your area. There are many different types of business loans available for retail stores and entrepreneurs.