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Value Drivers for Jewelry & Watch Wholesale

Value Drivers for Jewelry & Watch Wholesale

Unlike most industries when the Covid-19 pandemic hit, the jewelry & watch wholesale industry experienced increased demand. While the supply chain struggled, consumers still wanted high-end products. Instead of spending money on trips, consumers were spending it on jewelry & watches. This allowed jewelry & watch wholesalers to increase their prices. As an industry, jewelry & watch wholesale is mostly small businesses. During the pandemic, many small businesses struggled, if not failed, to survive the harsh effects of the pandemic. Whereas most jewelry businesses thrived. Through it all, jewelry & watch wholesale has increased at an annualized rate of 0.7% over the past five years. These factors impact the value of a jewelry and watch wholesale business. Below we discuss several important value drivers for jewelry and watch wholesalers. 

Understanding the value drivers behind your business is important for many reasons. The first is because these value drivers are what make or break a business. If your business pays attention to key value drivers, business owners will be aware when changes need to happen. The second reason is that value drivers help maximize the value of a jewelry and watch business. A smart business owner will often analyze the value drivers to ensure their business is headed in the right direction. Peak Business Valuation, business appraiser, considers key value drivers when determining a fair market value for a jeweler. To learn more or receive your own business valuation, schedule your free consultation below. 

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Key Value Drivers for Jewelry & Watch Wholesale

In the following paragraphs, we will discuss key value drivers for jewelry & watch wholesale. To better understand the value of your jewelry & watch wholesale business, obtain a business valuation. Peak Business Valuation, business appraiser, is happy to provide a business valuation and answer any questions you may have. Schedule a free consultation!

World Price of Gold

The jewelry & watch wholesale industry uses commodity materials such as gold and metal. These commodities are very volatile, which affects the price that wholesalers can purchase them at. Because of this, the price of the commodity affects the financial performance of the business. While prices are extremely high right now, experts don’t see that lasting. At Peak Business Valuation we often look at historical price averages. This helps the appraiser to better understand the company’s operations for a normal year. 

Strong Business Plan and Employee Turnover

Jewelry & watch wholesale will always have a high turnover rate of employees, or few employees employed at one time. Because of this, it is important to establish a business plan that is not based on people, but on performance. There are things your business can do to help ease the pains of turnover. Some of these things can include competitive pay, commissions, benefits, and a great work environment. While this may help, it won’t completely eliminate the possibility of turnover. Because of this, stay consistent with your business plan. Consistently reevaluate your goals and means to achieve them. Remember, this should not be based on people but on performance. When valuing a jewelry & watch wholesaler the business will analyze your financials and compare them to similar jewelers. 

Up to date with Customer Demand

As a jewelry & watch wholesaler, you are not always in front of the customers. Because of this, it can be difficult to stay on top of popular trends or preferences. Even preferences for metal go in and out. To successfully stay ahead of your competitors, stay vigilant. A wholesaler who has the right stock on hand will win the trust of their customers. When valuing a jewelry & watch wholesale business, the business appraiser will analyze your profit margins and operating margins. They will compare your wholesale business to similar jewelry & watch wholesalers.

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Stock on Hand

No matter the commodity, the stock is limited. Not only is it limited, but the supply chain has not recovered since the start of the Covid-19 pandemic. While you cannot control the supply chain, you can be prepared. Place orders in advance, be aware of your inventory, and keep in good communication with your suppliers. Not only will your customers be happy, but your business will expand as your reputation improves. Having the right stock is imperative to a successful wholesale business. 

Proximity to Key Markets

Delivery costs can quickly add up for wholesalers. Because of this, having close proximity to key markets will set your business apart from the other jewelry & watch wholesalers. There are hundreds and thousands of jewelers around the nation. While it is not possible to be located close to each store, it is possible to place your warehouse in an accessible location. This will encourage nearby jewelry stores to partner with you as it will not only save them costs but you as well. 

This value driver can be difficult if you have already established a set location. However, it is important to keep in mind and consider relocating if it makes sense and reduces high delivery costs. Peak Business Valuation, business appraiser, considers value drivers like proximity to key markets as it relates to revenue. As you position your business correctly, these positive revenue streams will increase the value of your business. 

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Certification

The right type of jewelry can be worth a fortune. Because customers are spending a pretty penny on something so small, it is important that they know where it is coming from. Retailers will usually require some sort of certification that this piece of jewelry or metal is genuine. This means your suppliers better be top-notch. As a wholesaler, it is important to understand where you are getting your product from, what kind of condition it is in, and verify that it is authentic. If you do not have the proper certification for that piece of jewelry, you may not be able to sell it. 

Summary

In conclusion, there are many important considerations when valuing a jewelry & watch wholesale business. Each value driver impacts the value of your jewelry & watch wholesale business. A business appraiser at Peak Business Valuation will consider these value drivers when valuing your jewelry & watch wholesale business. 

Jewelry & watch wholesale are in high demand and are predicted to be for the next few years. It is important to understand value drivers for jewelry & watch wholesalers as they can increase the value of your business. Whether buying or selling, a business valuation is useful as it will not only determine a fair market value but will identify key value drivers.

Peak Business Valuation, business appraiser, values jewelry & watch wholesalers across the nation. We are happy to answer any questions you may have. Reach out and schedule a free consultation to get your business valuation started. We look forward to working with you!

See Valuing a Jewelry Store, Valuation Multiples for Jewelry & Watch Wholesaling, Valuing a Jewelry & Watch Wholesale Business, and How to Value a Jewelry & Watch Wholesale Business for more ideas.

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