Jewelry Shows - There's Something about a Sale

I've been making jewelry for over 6 years. I don't do a ton of shows, but I've done enough to consider myself a veteran.

In the past I've had 'sales' - for example: Spend $50 and get 10% off your order. Or buy two pendants and save $1 on each. Things like that.

But I've never had a sale table - where everything on the table was marked down.

Well last week I had three solid days of shows. In the last few months I've purchased a whole new line of beads and am designing different things. I had hundreds of items made some of which had been displayed at my shows for years - literally.

There were things in my 'box' that I looked at and said "What was I THINKING when I made this? It's never going to sell".

Well I decided to get a second table. I took MANY of my older, 'less popular' items and marked them with a colored dot. Depending on the color the customer got 20%, 30%, or 40% off the item. Now keep in mind- most of my items were marked to sell on consignment, so I had some leeway to work with.

Well the sale table blew away my expectations. The things that hadn't been looked at for show after show after show were selling in droves.

Honestly - there is something about a true sale that just seems to make people go a little crazy. I admit, I've fallen prey to the Sale Fever in the past too.

So what did this do for me:

1.) I cleared out at least 40-50 pieces of very old inventory that I thought I would have to cut apart.
2.) My customers got a great deal and I did not lose money on anything.
3.) I increased my cash flow, making more cash available to invest in the newer designs I'm making.
4.) I had a record breaking year at a show I had attended for 6 years. My sales increased by well over 15% and I sold many more individual items then I had in the past.

On the down side - the customers at this show were interested more in my sale table than in the newer designs I was premiering. I did sell a number of my higher end pieces but didn't get the "WOW" impact I was hoping for.

To be honest - I did so well at the shows that I don't really mind. I've got plenty of time and opportunity to showcase my new (and I feel better) designs.

I don't always have the opportunity to get a second table. But after all of these years I learned the value of taking advantage of the opportunity if I have it.

Ahhh - Tax Time and Inventory!

Disclaimer: I do NOT know tax law or give tax advice. The article below is a summary of what I have done for the last 6 years and works with my tax accountant. You need to make sure you are doing what is necessary for your own tax purposes.

Entrepreneurs are passionate about what we do. We want to create, run our business and hopefully make some money. But one thing we don't want to do is taxes!

This time of year small business owners everywhere are saying "I just want to run my business! Someone please just figure this tax stuff out for me!"

This article is about just one of the things we have to track every year - Inventory.

I make jewelry and sell cross stitch books. I have a HUGE inventory for someone who works out of their home. Especially my beads - I literally have tens, if not hundreds of thousands of beads. What's a girl to do?

Why do I need to track my Inventory anyway?

I'm not a tax expert, and I'm not going to even begin to assume to give tax advice. Everything is different for everyone depending on your state, what type of business you are etc. But here are some basics that usually apply to all.

My inventory amounts are required for my Schedule C form which I fill out for my taxes. In addition, the inventories are used in the Cost of Goods Sold Calculation.

Here are some basic definitions:

Beginning Inventory: The total amount of inventory you had on hand at the beginning of the fiscal year.
Purchases: The amount of inventory you purchased (added to) your inventory during the entire fiscal year.
Ending Inventory: The total amount of inventory you had on hand at the end of the fiscal year.
Cost of Goods Sold: The amount of inventory you 'used up' in selling your items.

Here is the basic calculation:

Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold

Cost of Goods Sold is an expense. At tax time this is a GOOD thing - because that expense is deducted from the your gross sales. You don't want to pay taxes on your gross sales - you want to pay taxes on your gross sales less all of your expenses (net sales).

For example. I design a necklace that I sell for $50. But I didn't' actually MAKE $50 did I? If the materials in the necklace cost $15 (cost of goods sold), then I 'made' $35.

Of course there are many other expenses and considerations - this article is just concerned with inventory/COGS.

So - to simplify to the extreme - you need to know your total Cost of Goods Sold at the end of the year.

Inventory Approach #1 - Count.

At the beginning of the year count your inventory. If you make jewelry - count every bead, know what the bead cost, and add it all up. This is your beginning inventory.

During the year keep track of all purchases you make for inventory. If you make jewelry track all beads, findings, wire, etc. Everything that goes into making your designs. Do NOT count shipping, office supplies etc. Those are different types of expenses.

At the end of the year count everything again to see what you have on hand now.

Remember - if you have jewelry already made up - but not sold - that counts as inventory too! You must know the value of your loose beads in addition to the value of the beads in your "Finished Goods".

The apply the formula from above:

Beg. Inv. + Purchases - End. Inv. = Cost of Goods sold.

The good news - the next year you already know your beginning inventory - it's the ending inventory from last year!

Approach #2 - Track COGS

Here is what I do. Instead of counting my inventory at the end of every year I track my COGS throughout the year.

A couple of years ago I counted my entire inventory and determined my beginning inventory total.

I track every purchase I make.

When I store my inventory (in my case beads, books etc). I mark each item with what I paid for it. For example my beads are stored in separate containers by like type/price.

When I design a piece I calculate what it cost to make that item. I include everything, wire, crimp beads, jump rings, head pins, and of course the main components.

Then I tag that item with an inventory number and enter it into a database where I input the total cost of the design (COGS).

When the piece is sold, then I know how much I spent to make that item. At the end of every month I add up my total COGS and enter that into my books. Then at the end of the year I know how much I spent on materials without having to recount my inventory.

I use this calculation:

Beg Inv. + Purchases - COGS = Ending Inventory.

This takes a lot of organization up front - but will save you SO MUCH time and frustration at tax time.

Is it 100% accurate? No - of course not. But how accurate is it when you count 150,000 individual beads and aren't really sure if you paid .06 cents or .08 cents for any given bead? I believe the system I use, in my situation, is more accurate then trying to count.

In addition, I am much more aware of what it took to design a given piece and therefore am better at knowing what to charge for it.

Hope this article makes sense and is helpful. Please feel free to post comments/questions.

Please do NOT copy this article. If you want to refer to it - please post a link to my blog. Thank you!

So you want to do a Jewelry Show - Part 2

The Check List

So you signed up for a show now what do you bring? First - make a check list. Sounds silly - but do it and keep it. And before every show go through the list. Here are some things to consider - some are very obvious - but believe me, there are times when I've forgotten various items and really missed them once at the show.

Not all of these will apply to you, or to every show. But by having a list you can go through it before you leave and decide for yourself what you do/don't need.

So - in no particular order:

1. Cash/Change: Go to the bank and get change. You'll a little of every bill (more ones) and at least one roll of each coin. (do you have a cash box/bag?)
2. Calculator
3. Clipboard. If space is tight you can write the order up and hand the clipboard for the customer to sign if needed, or to write their check out.
4. Supplies to take credit card orders (if applicable)
5. Pair of small scissors
6. Stapler
7. Order pads (I get 2-part at Staples - I've gone through 2 books at a show before so bring extras)
8. Pens for you and your customers. Put some in pen holder on table with not next to it to show who to make check out to.
9. Copy of your tax ID. Many shows will require proof that you are allowed to charge sales tax. I always have mine in my cash box at every show.
10. Bags to put sales in.
11. Small baggies (I put each necklace/earrings in a small bag prior to putting in large bag. This keeps them from getting tangled) You may box each item or package differently.
12. Extra marking materials. Prices fall off etc. Bring tags, ear ring cards etc.
13. Tools - always bring at least your basic tools, even if you aren't planning on making jewelry at the show. You'd be surprised how many times something needs a 'tweak'.
14. I always take a supply of clip earrings backs and the small plastic earring 'protectors' that you can put on French wires so they don't fall off. I don't normally sell clips, but every show I've had I've converted at least one pair and sold them. The protectors I give out if asked.
15. Do you have lights? Bring extra light bulbs.
16. TV Tray - I use at least one to sit at to write up orders. This lets me use the entire table for my jewelry and provides me with a little desk to sit at.
17. A chair. Chairs are normally provided but they can be horribly uncomfortable. I often bring a padded chair from my card table set. Can make a big difference if you're at your table for 6-10 hours. Yes you will stand up a lot - but I've gotten some 'free' chairs that are almost unsafe.
18. Small Wastebasket. This is sometimes provided - if not - very nice to have. I put a plastic bag in it to line it. Then at the end of the show I just pull the bag out and toss it.
19. Table coverings. Normally these are provided, but not always so check first. I still bring a sheet to cover my table when the show is closed overnight, or if I set up the day before.
20. Business cards. Bring lots. Have them on the table and put one in with every order.
21. A SMALL cooler with a couple of drinks and a snack. If you're by yourself you don't always have a chance to go get lunch. Plus this can save a few dollars.
22. Small 'first aid' supplies. I have band aids, aspirin, and a small pack of Kleenex in my cart, along with toiletries like a small hairbrush, lipstick etc.
23. Mirrors - I have a hand mirror on each end of the table.
24. Supplies to make jewelry at your table. I almost always bring something to make while I sit. Sometimes I bring a LOT. I have some shows where the women are in workshops for an hour at a time, so the vendors have a lot of down time. I almost always make jewelry during this time. This does require more things to bring and more organization. Can't believe how many times I've brought everything to make earrings, then forgot the head pins or ONE item essential to completing my piece. You may want an extra list just for this.

Organization/Transportation

So how to you get all of this there and keep it organized? Easy! I buy the rolling drawer storage units at Staples. I get one with 5 smaller drawers and one larger drawer at bottom and another with 6 small drawers.

I can fit all of my selling supplies in one and use the other to bring jewelry making supplies.

The key - they have WHEELS! Load them up then just roll them in. Another benefit - they almost always will fit under your table. You can store them under the table with the drawers pointing toward you so you just open a drawer and get what you need. If you have room to sit behind the table (or next to it), you can use the top of the units as a table for making your jewelry.

I can unload and push two of these at once, making it supper easy to get ready for my shows.

The big items I put in the square rolling boxes that are collapsable and have handles. I usually have one or two large rubermaid boxes with display items that I can set on top of these to help roll everything in. I rarely have more than 4 trips to my car - usually 3.

I'm sure I've forgotten something and will add to the list as I remember. Hope this helps you prepare for your shows. Please feel free to comment.