A Benchmark Just for Jewellers (2008-9 Data) - Financial Data from MyCake

The MyCake financial service for Designer/Makers has aggregated some of its findings especially for the Jewellery Sector. In this except from the report Sarah Thelwall explains about what the figures are telling her. For the complete report go to the blog which is detailed below.

As we have quite a cluster of jewellers using MyCake we thought we'd do a brief benchmark just for this sector. Here are some of the highlights:

• All the jewellers are sole traders with two thirds making all their own work (the other third subcontract some of their production either to other jewellers or to manufacturers).

• There is quite a variety between those who use a lot of gems vs. those whose work is mainly silver based or

made from non-precious items.

• Those who use a lot of gems unsurprisingly show a very high cost of production … up to 73% of turnover is

spent on materials … In all honesty we think this is too high because it means that the income for the jeweller is a pretty small percentage of turnover ie a lot of risk for very little return particularly if you're working on a

sale or return basis • By contrast those using less precious materials may spend as little as 10% of turnover on materials giving a

high gross profit … averaging around 80% in this subset. This model offers better profitability i.e. the design

value is a higher proportion of the total value of the piece whereas in gem jewellery the design value is smaller and the gem value is what is driving the prices • Cashflow is very sporadic in both sets as you're making an outlay on materials that is often not directly

connected to the fulfilment of an order (also true for many/most batch production oriented designer makers).

Equally your income is lumpy either due to the way orders are placed or because SoR retailers only

summarise their sales and make payments monthly or quarterly so there is often quite a delay between a sale by them and payment to you.

What does this mean for the way you run your business i.e. what can you do about it?

For more on the findings go to:

[w] www.mycakefinancialmanagement.co.uk/blog/?p=1001