Business Terminology definitions: An explanation of commonly used jewelry business terms to help you in your wholesale handmade jewelry venture.
These terms are used in establishing business with stores, payment terms, and words that are used when doing trade shows.
We also have explanations for measurements for wholesale jewelry making supplies here.
C.O.D. stands for Cash on Delivery. You basically send your shipment of jewelry to the store, and in order for them to receive the merchandise, they have to issue a check or cash to the carrier, which is then sent to you.
Sending by C.O.D. costs money, which is billable to the BUYER.
Although I have not had problems with this method, I have heard of stories where the buyer refuses the C.O.D. and then it goes back to you and you get stuck with extra merchandise and the cost of the C.O.D. Other horror stories: the check that is sent to you bounces….
Sometimes a buyer will place a very large order, or they will place a custom order for which special supplies need to be obtained.
You can ask the buyer to leave a deposit of 50% at the time of order, and then pay the balance on the day of shipping.
Business terminology for the movement of your display items from the loading dock of a convention center to your booth at a trade show. Sometimes it’s included in your fee, sometimes it is extra based on how much stuff is in your booth.
Refers to the availability of electrical power to your booth at a trade or craft show.
Be careful not to go over the amount you paid for, as you may blow a fuse and plunge your jewelry booth into the depths of horrific sodium lighting which makes everything look like poo.
In jewelry business terminology, invoices are bills detailing the jewelry items you sold to the store. They are usually sent with the order, some stores prefer to receive them in sealed in envelopes so that only certain employees in the store can see the wholesale prices.
The amount of time it takes for you to turnaround orders. When deciding on your lead time, make sure you give yourself enough breathing space in case you have several orders (or retail shows) that you are working on at the same time. A lead time of 1: 2 weeks is reasonable, in my opinion.
In jewelry business terminology, line sheets traditionally refer to sketches or photographs of clothing or accessories in page form that you can hand to buyers so they can decide what to order.
These days, it’s easier to think of them as catalog pages, and maybe doing one for each line of jewelry you have. They also usually have information such as available colors, sizes, lead time, minimum pieces, product number, and wholesale prices.
Buyers often use line sheets at tradeshows to sort through potential products they want to have in their stores, so you should spend some time on these. Sample line sheets are available in the Downloads section of this website.
Opening minimum is the minimum dollar amount of merchandise a store owner needs to buy to do business with you on their first order.
I have found that an opening minimum of $250 works best to insure that the store has enough assortment and stock of your jewelry to display and also to weed out buyers who aren’t really serious about selling your work (or looking for cheap Christmas presents).
MOQ is business terminology used to specify to buyers that a certain style has a minimum number of units that have to be orderd.
This is really handy if, say, you have inexpensive bracelets in your line that are quick sellers, but they are not worth making in your studio if you don't make at least a dozen at a time.
So on your linesheet or wholesale website, you put in the description "MOQ 12 pieces," which means a buyer must order a minimum of 12 pieces when placing an order.
Another way to use this on your line sheet is to specify MOQ for a line, but allow for mixing of styles. For example, if you have a line sheet with 6 styles of bracelets in your Copacabana Bracelet Collection, you can state "MOQ: 2 dozen, mixed styles," which requires a buyer to purchase a minimum of 24 bracelets, but they can choose amongst the six styles you have available to make up the two dozen MOQ.
Reorder minimum is the minimum dollar amount for orders placed after the first order.
It should be less than the opening order, but should be at least $100 to insure that there was enough of my jewelry in the store to make an impactful sales display.
Business terminology for an arranged payment plan, usually requested by larger companies or businesses that you have been working with for a long time.
It basically means that you will receive payment for your jewelry order 30 days after ship date.
Personally, I am not a big fan of net 30, as I am not a lending institution, and am not in any position to loan stores $300 worth of jewelry for a month, interest free.
Having said that, I allow only a select few to have net 30, as I believe that net 30 is an earned privilege for my best customers, who have spent at least $1,500 within 6 consecutive months, and state that in my terms.
In addition, I only allow net 30 after they pass a credit check of at least 3 artisanal references.
Pfffft…don’t fall for this one. Who the heck has time to wait 60 or 90 days to get paid for their hard work?
Think about it, if you paid your credit card bill 60 or 90 days after it was due…you would be in collections! Enough said.
A form that you fill out at trade shows to set up quantities of jewelry ordered, payment method, and shipping date. You may purchase generic ones with duplicate or triplicate copies, or just make your own copies, and buy carbon paper and layer your own order forms to make extra copies as necessary.
Business terminology for orders that are paid in advance of or on the date of shipping.
This is the most ideal situation when wholesaling jewelry
Packing lists are similiar to invoices in that they list all items shipped to a buyer. The difference is that packing lists do not contain prices.
Packing lists are used in the retailer's stockroom to make sure that everything that was ordered was shipped and received properly.
Is a confirmed order statement between buyer and seller that includes items purchased, quantities, shipping costs, and an agreed payment date. Sometimes a seller or buyer will include a cancellation clause as well, usually 30 days prior to ship.
Payment is made via company check before shipment, or charged via credit card before shipment.
It’s a good idea to have a return policy in place, such as “all sales final except for damaged merchandise upon receipt.” Or whatever exchange policy you come up with. Some jewelers go as far as to offer a 90 day swap out policy, meaning if the jewelry isn’t the right fit for the store, they can swap out for other pieces as long as they pay for shipping.
Your return and exchange policy should be clear stated on your website and somewhere on your invoices and packing lists.
Is business terminology for the amount of money you charge the store for shipping each order to them. This can be a flat fee or based on dollar value of the invoice.
I usually used USPS priority mail service, as they provide small business owners free shipping boxes for using their service. Plus you can print out shipping labels and pay for your postage at home so you don’t have to wait in line.