Jewelery is something that always rules the hearts of women around the world. From economic point of view also it holds a major significance and is considered as the best source of investment. Women have always had an inclination towards jewelery and especially Indian women are crazy about it whether it is gold jewelery, diamond or platinum. You can guess it from the fact that India is the largest consumer of the gold with 25% share in total consumption of gold.
Jewelery as a business
From economic point of view, jewelery business is considered a business which has lots of profit yielding potential on account of its great demand. That business is having least risk quotient because the price of the metal used in making jewellery has the tendency of getting increased only. So even if there is no demand still business can earn huge profits by selling the metal only.
Scope of jewelery business
There is so much scope in jewelery business to earn fortunes. Jewelery business is divided in various sectors. You should have to make a decision on the basis of your likings and interest that what area of jewelery business suits you more. Following are the areas in which you can enter and earn huge amounts of profits.
* Processing gems and metals
* Jewelery designing
* Manufacturing jewelery
* Retailing of finished jewelery
* Jewelery supply chain
Extraction of jewelery material
Jewelery material can be categorized in two areas
Gemstone mining: gemstone mining is further categorized in diamond and non diamond mining.
Non diamond mining: the vast majority of non diamond material is mined at low cost. So it is a great source of income of developing countries people who does mining at small scale. Countries which are majorly included in non-diamond extraction are India, Brazil Tanzania, Mali, Sri Lanka, Madagascar, Thailand and Mali. That is basically popular in rural areas.
Whereas diamond mining includes huge costs so it can’t be done at small level. You need to have a large investment if you want to enter in those areas.
Metal mining: in metal mining we take gold, silver, platinum, titanium, stainless steel, tungsten, rhodium mining. These all metals are used in jewelery manufacturing. They all vary greatly in price, strength and other attributes.
Processing gems and metals: jewelery industry is very complex and involves many businesses at every stage. So processing and manufacturing has been divided. In processing stage there are basically two areas.
Cutting and polishing of gems
It is advisable for companies to focus on one core area and achieve specialization in that area to earn huge profits.
After the processing of gems and metal the next stage comes in which design of the final layout of the jewelery is made. The companies involved in this area hire services of professional jewelery designers to make the exclusive designs because the jewelery sells on its design only.
Jewelery manufacturing is giving real shape to the blueprint prepared in the jewelery designing phase. It is the stage where final product of the jewellery business is prepared.
Jewelery retail and consumer markets:
After the preparation of final product the next question arises to make them reach to the target consumers. So we need proper distribution channels for this. At the distribution end basically small and unbranded retailers dominate. There are branded retailers also but they are very few in numbers.
In between there are many small traders whose trading relations are confidential and hardly visible too general public basically to hide the information of supply source and destination source from competitors as well as general public. So these are the basic areas in which one can enter anyone wants to enter in jewelery business depending on the personal interests and skills required for the particular field.
Limitations of jewelery business:
Despite seeming an easy source of making huge money there are some limitations also in this business that one has to consider while making entry in to this business.
The high risk quotient:
Only the persons who are daring enough to bear larger risks should enter this business. The jewelery business is not considered a good idea for conscious natured persons.
The large companies who tends to be in mining industry in jewelery business require a ‘license to operate‘. And they have to abide by stringent international standards.
Limitations of perfect completion:
Retail sale of jewelery is close to the perfect competition. In perfect completion as you know there is large number of buyers and sellers leading to huge competition resulting in uniform pricing and low margins.
The small scale mining impacts:
The small scale mining despite having positive impacts like providing employment in rural areas having many social and environmental drawbacks like child labour, poor health safety hazards. And large scale mining also leads to many negative impacts like waste management, groundwater-contamination, acid rock drainage, and pollution, low labor cost.