Tips requested on starting a (very small) online business

pearlbop

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Jan 26, 2018
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Hi guys,

Apologies in advance if this is not the right forum…

I was looking for some tips / advice on starting a pearl retail business. I know that many of the members here are also sellers and it's understandable if you need to protect business knowledge, but I am in a region of the world that I believe you don't really serve, and I will never be able to reach your scale.

I quit a bad job earlier this year and want to take a rest for a while. I've been toying with the idea of opening a very, very small online retail business and I love looking at pearls, especially akoya, so I thought I could put all that time gazing at pearls to good use.

I plan to sell only PSL-certified hanadama akoya sets, maybe branching out later into other akoya-based jewelry. Prior to the pandemic, I would visit Hong Kong and Japan fairly often. The last time I visited Japan, I bought an additional set of hanadama akoya that I decided I didn't want and sold it off, so I have an inkling of possible margins here.

Other than a potential website, I have noticed other pearl sellers in my areas using a free platform, which keeps marketing costs down. Of course, there wouldn't be huge volume, but I don't expect to sell more than 1 or 2 sets a month and would not keep a large inventory

I use that platform to buy and sell my own personal possessions quite a bit. There are a lot of sellers offering tahitian, SSP and akoya - ranging from dubious / downright misclassified specimens to what looks like decent quality pearls. But very few of them offer hanadama akoya. Few of them bother with PSL certifications at all. Most resort to saying "AAA" with the occasional (dubious) claim of Tennyo. Yet people are still buying them. And I don't even want to get started on retail brick and mortar stores and the quality they carry.

Additionally, I personally realised that I need to view pearls in person before I can buy them without regrets, and there is lack of cheap and easy ways for someone in my country to view good quality hanadama pearls in person before purchasing them.

Just some questions to the retailers:

How do you deal with returns?
  1. Hygiene: Many jewelry retailers do not allow for earrings to be tried on. Do you adopt a similar approach? What if a customer tries on an item of jewelry and gets it really dirty, which might potentially damage the quality of the pearls? Where do you draw the line?
  2. Fraud: Pearls can be difficult to distinguish for the layman. I'm afraid of the classic bait & switch scam - I'm sure I'll be able to recognise if they had swapped it for a lower quality, but not sure how I might potentially prove it in a court. When I was selling off my designer bags, someone tried this on me, but designer bags have serial numbers and so I could send her packing

For smaller retailers, do you still buy akoya at auction / from source and then match and grade them, before sending them to PSL, or do you choose hanadama strands from middlemen?

For smaller retailers, how do you get to pearl auctions / get the suppliers closer to the source to talk to you? What is the minimum quantity / monetary quantum of sales you have to hit before they will entertain you?

Do you have any further tips for how to educate myself? I've done the Pearls as One course before, but am curious about resources meant for industry professionals.
  1. Is the GIA pearl course very useful or are there book resources etc that are helpful? Does it help to open doors to industry sources?
  2. I saw that Jeremy has written a book on starting an online business; but from the preview on Amazon it seems to be geared towards the business side of things rather than being about pearls. Are there any books you can recommend for further knowledge?
  3. Also saw that Pearl Dreams recommended "Pearl Buying Guide" by Renee Newman
 
Hello PearlBop...that is one lengthy enquiry!
I will be able to help a bit because I have started 2 online stores, but I won´t answer all your questions at once sorry. Piece by piece as "Jack the Ripper" is said to have said ;)

Let me start with your 3 last questions first:

Do you have any further tips for how to educate myself? I've done the Pearls as One course before, but am curious about resources meant for industry professionals.
1) Is the GIA pearl course very useful or are there book resources etc that are helpful? Does it help to open doors to industry sources?
The GIA course is useful indeed, BUT if you are starting with a business you may need something more down to Earth and that SAVES YOU MONEY that you can use to fuel your bizz! Try the Pearls as One Course! Use this link to check it out.

2) I saw that Jeremy has written a book on starting an online business; but from the preview on Amazon it seems to be geared towards the business side of things rather than being about pearls. Are there any books you can recommend for further knowledge?
There are classic books that will help you later, such as Hubert Bari's "Pearls", Elisabeth Stracks "Pearls" and The Book of Pearls" by Kunz and Stevenson which is my absolutely most classic about history.
3) Also saw that Pearl Dreams recommended "Pearl Buying Guide" by Renee Newman.
Yes, good book by Renee Newman, also Antoinette Matlins' "The Pearl Book: the Definitive Buying Guide". These are the 2 books you should get and with the Pearls as One course...you are on your way!

So, this is a start!
 
Thanks very much Douglas! :)

I've done the Pearls as One Course, but shall do it again to refresh my memory. I was doing a little more research and saw that Pearl Science Lab also holds short courses in Japan (temporarily suspended due to the pandemic), focused purely on Akoya pearls. In the mid-future (who knows when travel will resume!), I guess that's another possible option.

Thanks very much for the book recommendations, I shall look out for copies of those.
 
It is my favorite book! And you can get the Kindle edition for peanuts!
I am happy to hear you've done the CPAA's Pearls as One course! I love the comprehensiveness and the easy-to-understand language of the course.

What else can I say...advice...well, I-ve had two eStores and both stocked with one-of-a-kind items...which is an ABSOLUTE PAIN! Especially if you have low-priced items: to add all the information on the item and a full description and then take and edit photos...for 300 items and do it again, and again and again...I'd rather just add 50 unique items, highly prized. It is worth your valuable time to do things smartly.
This would be my #1 advice...and if possible: just make all similar items and just add the item once!

Second advice: INVEST in advertising on Facebook, Google Ads and even Bing! ads (they are less expensive). This is money well spent, just be sure to find help to direct these ads to your actual market segment. That way you are not throwing money away.
 
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How do you deal with returns?
Hygiene: Many jewelry retailers do not allow for earrings to be tried on. Do you adopt a similar approach? What if a customer tries on an item of jewelry and gets it really dirty, which might potentially damage the quality of the pearls? Where do you draw the line?
Fraud: Pearls can be difficult to distinguish for the layman. I'm afraid of the classic bait & switch scam - I'm sure I'll be able to recognise if they had swapped it for a lower quality, but not sure how I might potentially prove it in a court. When I was selling off my designer bags, someone tried this on me, but designer bags have serial numbers and so I could send her packing

PearlBop,
Just saying up front, I don't do much with Akoya, much less Hanadama, but I think my remarks may still be helpful.
I'm glad you are doing plenty of research and asking lots of questions in preparation for setting up your online pearl sales!
It's important to have your return policies stated on your website and/or the listing. Here in the US some state laws prevent from taking earring returns. If you're not comfortable with earring returns, just state it clearly. Some online retailers allow a generous 90 days to return an item, but I feel with pearls and other jewelry, one knows within a few days if it's the right item for them. So a much shorter return window could be adequate, for example, notifying you within 10 days to expect a return. A small business can't afford to have one of a kind high ticket items being used for months and then returned. Look at your favorite online websites; check their wording and requirements. Spelling it all out simply and clearly works best for everyone.
As for fraud, like bait and switch? You can attach tags which if removed, make an item unreturnable. You can require a return authorization (RA) number which you give to the client when they inform you of a pending return. Maintain a catalog of details and photos of each strand, pearl count & size. A distinctive clasp that would be difficult to match, a small logo tag could help to identify a strand as coming from you.
You may be young and have wonderful eyesight, but in the beginning you don't want to be matching loose pearls or dealing with drilling strands; let the pros do that. As you have already purchased some Hanadama pearls, you do have a reliable source. I wish you the best!
 
I fully agree with Pattye. She has very sound advice. You should adequate your Store Return Policies based on "the Law of the Land", meaning: first check with your local laws and regulations and work with these as the main template on what you can and cannot do.

For Fraud: not much I can tell you, since what I sold were Natural & Cortez pearls which are very much unique...but you should have all technical details handy since you may have to prove you have been swindled. But, what I've heard some doing at retail stores where they have a lot of shoplifters is this: you add a given percentage to the cost of all your items (let us say, 1-3%) and that will help recoup the costs of loss. I don´t know if this is something you would want to do and HOPEFULLY you will only have GOOD honest customers (that was always my experience, except ONCE).
I will think of more things, but if you have more questions it may help :)

Merri Xmas to All!
 
Merry Christmas Douglas and Patty! Hope that you and your families are keeping well. :)

Thanks again for the tips, very useful, especially on checking local laws on hygiene and returns and how to deal with potential fraud and theft.

Patty, you are right - I'm not yet up to the task of matching loose pearls and drilling them this early on.
Will have to rely on the business cards that I picked up in Japan... hopefully at least one is responsive, else I will do another on the ground search when the pandemic is under control.
 
Douglas is super-right. You must know everything about your country's consumer and contract law since you are running a business. Also all tax aspects, both business and personal.
At the moment I'm (with great sadness and dismay) getting familiar with the fine detail in the trade deal between the UK and the EU. Stupid doesn't begin to be enough of a word to describe my country these days.
 
Yes, Pearlescence has also glanced upon a difficult issue: shipping costs outside your country and returned items!
In my experience: try to avoid it if possible, just stick to national shipments or find a way to solve the issue regarding returned items...I cannot stress this too much.
I would have items shipped to Europe or the USA and having them returned was so hard that it would have been easier just to have the customer keep the item for Free...of course I found a workaround (thanks to my sister in Arizona!) but if not...what a pain! Eventually you grow larger, you have a better shipping company, you end up with your own import-export personnel/firm and you solve the issues, but at first try to keep it simple.
 
Given that I also live in an area that is woefully under-served by the quality of pearls sold in bricks-and-mortar shops and jewellers, I purchase everything online and from my experience:
1) Photos of jewellery are almost impossible to judge, but a good quality video camera (not just a phone), proper indoor lighting or outdoor natural light, have been immensely helpful. I have yet to make a single return with jewellery items purchased online when seen beforehand on video AND been given photos of the items worn on actual people rather than mannequins with sizing/dimensions given.

2) Have you already considered running your store partly on Instagram for marketing purposes? Insta doesn't handle payments, but discovery and communication is really great. It seems particularly suited for vendors whose individual stock changes rapidly due to uniqueness, since it makes much easier for me as a consumer to browse streams of new arrivals, rather than having to navigate to many individual websites.

Also, regarding discovery: Instagram makes suggestions in my feed based on hashtags and similar photos, and I've discovered at least ten new vendors that I never followed before. I don't know if this is the free platform to which you were referring in your initial post, and I would definitely recommend sticking with a platform that can handle payments and disputes. Also to consider, their direct messaging system has a feature where you can see whether the other person has read your message, and there's less anonymity on both sides since for most people, their Instagram is their personal social media account connected to their real-life identity.
 
The Book of Pearls" by Kunz and Stevenson is probably one of my favorite books as well actually. It was actually the first book that marked me sooo much.
 
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Hey pearlbop :)
This video was just posted a very short-while ago and it's an interview of our very own jshepherd and he offers good advice on online selling. And Jeremy is simply fantastic...he just nails it when it comes to the online sales world.
 
I do agree about innovation. Some of the old - especially Japanese firms - are headed by old men for whom the telephone (land line) is a dangerous new fangled device.
 
I do agree about innovation. Some of the old - especially Japanese firms - are headed by old men for whom the telephone (land line) is a dangerous new fangled device.

That is a very adequate description. Next time we meet (when??? and I mean this for everyone reading this message) please ask me to tell you the time I had a close encounter of the 1st Graft kind with a group of Japanese pearl owners (they did not look like farmers, but owned farms)...it's hilarious.
And I have to say: I love Japan and the people of Japan.
 
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