It’s no secret — small businesses nationwide have felt the effects of the economic downturn.
This is especially true in the jewelry industry, which deals in luxury items. When disposable income drops, these purchases are delayed, and buyers scrutinize price and value more than ever.
As inflation looms, businesses face higher inventory costs and slower turnover. Overcoming these obstacles requires protecting profit margins, maintaining cash flow, and creating an unforgettable customer experience.
In this blog, we share four strategies to help your jewelry store remain profitable, even in the face of national financial challenges.
Let’s dive in.
Surviving economic hardship requires making sacrifices, reducing waste, and doing more with less. Let’s take a deep dive into our top four strategies for success.
To stay afloat, you need to ensure that enough money is coming into the business to cover your expenses. Follow these steps to protect your financial resources.
An important step in surviving an economic slowdown is creating an emergency fund. While building it up can take time, it could be the difference between closing or staying open if market conditions worsen.
Shoot for a reserve of six to 12 months of business expenses. Keep the money in its own account, start with a month or two of expenses, and set aside a certain amount each month until you reach your goal. Only dip into it if you need to, and replenish it whenever you can.
Suppliers continue to raise their prices, but as a business owner, you may have more power than you think. Contact your vendors and see whether you can secure discounts for buying in bulk. Use this strategy for fast movers you’re confident you can sell through. Locking in a lower price helps you combat inflation.
Ask for early‑pay discounts or request longer terms to preserve cash. If you work with multiple vendors, review your rates and find the ones offering the best deals. Consolidating to fewer suppliers may help you reduce costs and increase your profits.
When money is scarce, tightening your inventory management is one way to save. You may need to cut down on how many different items you carry and the quantity of each. Order more top sellers and less slow‑moving jewelry.
You can also try working with suppliers to stock merchandise on memo — a short-term arrangement in which you pay only for the items you sell and send the rest back. This option helps you test different kinds of inventory with lower risk.
Related Read: Outsourcing vs. In-House Jewelry Repairs: What Makes Financial Sense
Another strategy for enduring economic hardship is finding new ways to make money.
Repairs and maintenance often carry higher margins than retail sales, so adding them can boost profit. If you choose to offer this service, hire capable repair staff and strive to create a great experience for customers.
Some point of sale (POS) systems include features designed to help you manage repairs. Modules within this software allow you to:
With all of these capabilities in one place, these systems have the logistical side of repairs covered.
Estate buying means purchasing pre‑owned pieces. You might find them at an estate sale, an auction, or a pawn shop. This kind of inventory usually comes at a relatively low cost, and rare jewelry can generate strong interest among customers.
If you find a unique piece — like a vintage diamond ring — try posting it on your social media to create buzz with your audience.
Owners of expensive pieces often insure them.
Jewelry insurance typically covers:
Knowing a valuable item is covered in these instances brings owners peace of mind. You might already offer coverage options on pieces sold at your store — if so, you can bring in extra revenue by performing insurance appraisals on pieces not purchased from your store.
For this service, a customer brings in a piece of jewelry and you appraise it, allowing them to take it to their insurance company to get a policy based on the evaluation. Providing this service requires extensive knowledge of jewelry and a credential from a recognized gemological organization.
If sales dip, put extra effort toward retaining the clients who spend the most at your jewelry store.
Your most loyal buyers are the foundation of your business. Many POS systems offer customer relationship management (CRM) features that allow you to create client profiles. You can record phone numbers, emails, and purchase histories.
Based on this data, find your highest-spending patrons. You can build loyalty among these customers by offering free services and sending them personalized marketing messages. If a buyer frequently purchases pearl necklaces, email them when new ones are in stock.
If a customer tends to shop at certain times of the year — such as their birthday, anniversary, or Valentine’s Day — send suggestions leading up to these occasions.
During an economic downturn, offering financing options makes jewelry more accessible to the average person. Allowing customers to make monthly payments rather than paying for an item outright eases their financial burden.
You can also offer layaway, where a buyer pays for an item with a deposit and monthly installments, then takes it home once it’s fully paid off. This reliable option ensures you’re fully paid before the item leaves the store.
Related Read: Layaway for Jewelry: 5 POS Features That Keep Customers Happy
Some customers purchase jewelry as an investment. Certain high-quality or rare items hold their value or even gain value over time. Promoting select pieces as investment opportunities can help increase sales during times of financial hardship.
If you take this approach, be transparent with buyers. While it’s difficult to predict the exact future value of a piece, offer accurate estimates based on your expertise.
A time of financial stress may reveal areas of inefficiency within the business. If it’s getting harder to make ends meet, look closely at your jewelry store’s operations and identify wasted funds, time, or space you can eliminate.
First, review all of your expenses and try to find places where you’re spending unnecessarily. You may need to adjust your product mix — if high-end jewelry isn’t selling as well, place smaller orders for those items and larger ones for more affordable offerings.
If you sell jewelry online, you can look for more cost-effective shipping methods. Even small reductions in these costs can add up to major savings over time.
Look around your store and decide whether you really need all the space you’re occupying. If you can comfortably sell just as much jewelry in a smaller area, it may be wise to move to a different location.
If there’s a section of your store you aren’t using, you could sublet it to another business for storage. Be sure to follow all rules in your building contract when making these decisions.
You may be able to get by with a smaller staff than you currently have. Your employees likely have specific roles — perhaps some are salespeople, some work in the backroom, and some handle repairs. Cross‑training increases scheduling flexibility and often means fewer people can run the store at a time.
Training employees to a high standard takes time and effort, but investing in your staff allows each person to make a greater contribution to the business. Highly trained team members set your jewelry store up for future success.
For a small business, surviving an economic downturn requires discipline. Though sacrifices must be made, the right strategies can keep your jewelry store profitable and open until things pick back up. Remember to protect cash flow, find new sources of revenue, retain your most loyal customers, and increase efficiency by cutting costs.
Modern POS systems include features to help you manage these tasks. Jewel360 is an all-in-one POS solution designed specifically for jewelry stores and is equipped with both general and jewelry-specific features.
Jewel360’s comprehensive reporting tools help you pinpoint your top-selling products — and the ones that sit on the shelves for too long. This helps you optimize your inventory and keep revenue consistent. And with CRM tools, you can use targeted marketing to build loyalty among your audience.
To see Jewel360 for yourself, schedule a demo today!