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Valuing a Jewelry & Watch Wholesale Business

Valuing a Jewelry & Watch Wholesale Business

The jewelry & watch wholesale industry recognized a 10.5% annual growth over the last five years. While the pandemic negatively impacted many businesses, it positively impacted the jewelry & watch wholesale industry. Instead of travel, individuals spent money on jewelry. Because this is a commodity industry, it is very volatile. Prices can fluctuate at the drop of a dime, which affects the success of the industry. While the jewelry & watch wholesale industry did well throughout the pandemic, many small businesses did not. In fact, many jewelry stores did not survive. This impacted the flow of the jewelry & watch wholesale industry. Each of these factors impacts how a business appraiser values a jewelry & watch wholesale business.

Peak Business Valuation, business appraiser, works with individuals who are buying or selling a jewelry & watch wholesale business. The first step to buying or selling is receiving a business valuation. During the valuation engagement, our business appraisers will discuss key factors they use when valuing a jewelry & watch wholesale business. Because of this, the below factors are only a guide. For detailed information, contact us below to schedule your free consultation with Peak Business Valuation, business appraiser.

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Market Multiples for Jewelry & Watch Wholesalers

  • SDE Multiple Average: 3.03x – 3.23x
  • EBITDA Multiple Average: 3.31x – 5.51x 
  • REV Multiple Average: 0.27x – .86x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article.

The above are average market multiples for a jewelry & watch wholesale business. A valuation expert uses multiples when valuing a jewelry & watch wholesale business. When using this valuation method, a business appraiser will compare similar companies that recently sold. Then they will apply an applicable market multiple to your jewelry & watch wholesale business. In most cases, a valuation expert uses a combination of business valuation methods to determine the value of a business.

 Understanding the value of your business will help you learn how to maximize its worth. This will benefit your jewlery & watch business whether growing, buying, or selling. Here are a few ideas to help increase the value of your jewelry & watch wholesale business. For a detailed valuation, schedule a free consultation with Peak Business Valuation, business appraiser.

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Key Success Factors

Peak Business Valuation, business appraiser, values jewelry & watch wholesale businesses on a regular basis. To increase the value of your business, focus on these key success factors or key value drivers. They are a great way to learn important aspects that will increase the fair market value of a jewelry & watch wholesale business.

World Price of Gold

First, the success and value of a jewelry & watch wholesaler is dependent on the 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, business appraiser, we often look at historical price averages. This helps us to better understand the company’s operations for a normal year and is a better indicator of value.

Stock on Hand

With supply chains upset, supplies are limited. This has created issues along the entire supply chain. Because consumer demand has increased and supplies have decreased, there is a shortage. As a wholesaler, it is important to stay ahead of the shortages. If possible, order supplies far enough in advance to avoid issues for your business. Not only will it relieve stress on your business but it will build trust with customers. A wholesaler that keeps stock on hand will draw more customers to their business. When a business appraiser values a jewelry & watch wholesale business they will analyze the financials. They will compare your financials to that of similar wholesalers and industry averages. 

Employee Turnover

The last key success factor surrounds employees which are crucial to the business’s success. Jewelry & watch wholesale has two employee scenarios. The first is a low number of employees. The second is a high employee turnover. While a business owner cannot completely avoid employee turnover, they can lower it. A few ways to do that is through offering great benefits, creating a fun and healthy workplace, and offering competitive pay/commissions. High employee turnover can lower the value of your business as it detracts from the goals of a business. Whereas a stable, loyal team and management team reduces risk which increases the value of a jewelry & watch wholesale business.

Summary

There are many factors to consider when valuing a jewelry & watch wholesale business. Whether buying or selling, understanding the value of a jewelry & watch wholesale business is necessary. To learn more about valuing a jewelry & watch business, consider obtaining a business valuation. This is a great way to learn how to increase the value of your future or current jewelry & watch wholesale business.

Peak Business Valuation, business appraiser, values jewelry & watch wholesale businesses across the nation. Feel free to reach out via email or schedule your free consultation below. We are happy to answer any questions you may have. 

 

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