How Dropshipping Can Help You Expand Your Jewelry Business Without Buying Every Product Upfront
One of the biggest challenges when starting or growing a jewelry business is inventory. You need enough merchandise to give customers choices, but every piece you purchase requires money upfront. Once you buy that merchandise, you also need somewhere to store it, a system to keep track of it, and a plan for what to do if it doesn’t sell as quickly as you expected.
That’s one reason dropshipping can be an interesting option for jewelry resellers. Dropshipping allows you to offer eligible products for sale without purchasing and physically stocking every item yourself first. When your customer places an order, the product is fulfilled and shipped on your behalf according to your dropshipping supplier’s process.
For a reseller, this can create an opportunity to offer a larger selection while keeping less money tied up in physical inventory. It can also be used alongside traditional wholesale purchasing rather than replacing it completely.
After nearly 20 years in the wholesale jewelry business, I have learned that there is rarely one sourcing or selling method that makes sense for every reseller. Factory merchandise, closeouts, bulk lots, traditional wholesale inventory and dropshipping can all serve different purposes. The important part is understanding how each model works so you can decide where it fits into the business you’re trying to build.
What Is Dropshipping?
Dropshipping is a fulfillment model in which you market and sell products without physically keeping all of those products in your own inventory. When a customer purchases an eligible dropship item from you, the order is submitted for fulfillment and the supplier ships the merchandise according to the terms of the dropshipping program.
In a traditional jewelry resale business, the process generally looks something like this: you purchase inventory, receive it, store it, sell it, package the customer’s order and ship it. With dropshipping, you choose the products you want to offer, market them to your customers and generate the sale, but the physical fulfillment of eligible products is handled by the dropshipping supplier.
You are still running the customer-facing business. Dropshipping simply changes how the merchandise gets from the supplier to the final customer.
Is Dropshipping the Same as Reselling?
Dropshipping is a form of reselling. The primary difference is when you purchase or take possession of the merchandise and who handles fulfillment.
A traditional reseller usually purchases inventory before a customer has purchased it. That gives the reseller physical possession of the merchandise and more control over photography, packaging, bundling, live selling, displays and other aspects of the sale. The tradeoff is that money is committed to inventory before you know exactly when, or whether, each piece will sell.
Dropshipping can allow a reseller to offer eligible products without purchasing every individual item in advance. This reduces some of the financial commitment associated with carrying a larger physical inventory, although margins, fulfillment procedures and the amount of control you have over the merchandise may be different.
Neither model is automatically better. They solve different problems, and for some jewelry businesses, the most useful approach may actually be a combination of the two.
Dropshipping vs. Buying Wholesale Jewelry
Let’s say you have $500 available to invest in your jewelry business. With traditional wholesale purchasing, you might use $300 or $400 of that money to buy inventory. You own the merchandise, which means you can photograph it yourself, sell it during live shows, take it to vendor events, create your own bundles and have it immediately available when a customer orders.
The downside is that your money is committed before your customer makes a purchase. If you buy 50 necklaces and they don’t sell, you still own 50 necklaces.
Dropshipping approaches inventory from the opposite direction. Instead of purchasing every eligible product before offering it for sale, you can potentially make those products available to your customers while the supplier continues to hold the physical inventory until an order is placed.
Traditional wholesale purchasing gives you greater physical control over your inventory. Dropshipping can give you greater flexibility in the number of products you are able to offer without committing the same amount of money upfront. Understanding that distinction makes it easier to decide which model makes sense for a particular product or part of your business.
Why Dropshipping Can Be Useful for a Jewelry Business
You Can Expand Your Product Selection
A small reseller may only have enough capital to purchase 50 or 100 styles at one time. Dropshipping can potentially allow that same seller to offer additional eligible products without having to purchase every style in advance.
This can be particularly useful for online jewelry businesses because customers generally appreciate having choices. Instead of tying up thousands of dollars simply to create a larger catalog, a reseller can use dropshipping to supplement the merchandise they already physically stock.
You Can Reduce Some Inventory Risk
Every reseller eventually buys something that doesn’t sell as expected. With traditional inventory, you’re financially committed to that merchandise until you find a way to sell, bundle, discount, repurpose or otherwise move it.
Dropshipping can reduce some of that risk because you haven’t necessarily purchased every piece you’re offering in advance. It does not eliminate business risk, but it can change the amount of capital you have tied up in unproven merchandise.
You Need Less Storage Space
Jewelry is relatively easy to store compared with furniture, clothing and many other products, but anyone who has been in this business long enough knows how quickly inventory can accumulate. Thousands of small items still require shelving, bins, organization and space.
With dropshipping, the supplier holds eligible dropship inventory until it is sold, allowing you to expand part of your product offering without expanding your physical storage at the same rate.
You Can Use Dropshipping to Test Products
This may be one of the most interesting uses of dropshipping for an existing reseller. Suppose you notice a new jewelry trend but aren’t sure whether your customers will respond to it. Instead of immediately purchasing a large quantity, eligible dropship merchandise may give you an opportunity to test customer interest first.
If customers aren’t interested, you’ve learned something without being stuck with a large quantity of merchandise. If they love it, you’ve gained useful information that can influence future wholesale purchases. In that sense, dropshipping can become another form of market research.
The Hybrid Jewelry Business Model
I think one of the most useful ways to look at dropshipping is not as an alternative to a traditional jewelry business, but as another tool within it. You don’t necessarily have to decide that you’re either a wholesale inventory reseller or a dropshipper.
For example, you might physically stock proven best sellers that you know your customers purchase repeatedly. Keeping those products on hand gives you the flexibility to use them for live sales, vendor events, bundles and immediate fulfillment.
You might also purchase closeouts and special buys when an opportunity comes along and the numbers make sense. These products can give your business unique inventory and potentially excellent margins, even though they may never be available again.
Dropshipping can then become a third part of the inventory strategy, allowing you to offer additional eligible merchandise without physically purchasing every product first.
In other words, your business can have core inventory that you own, opportunity inventory that you purchase when exceptional buys become available, and dropship inventory that expands your selection without requiring the same upfront investment.
Those three approaches can work together rather than competing with one another.
Dropshipping Can Help You Test Before You Buy Deep
Throughout the Ultimate Guide to Jewelry Reselling, I talk a lot about treating early inventory purchases as market research. Dropshipping gives us another way to apply that philosophy.
If a particular style begins trending and you think your customers might love it, your first instinct doesn’t necessarily have to be purchasing 100 pieces. If appropriate products are available through your dropshipping supplier, you may be able to offer the style first and see how customers respond.
Actual customer behavior is much more valuable than guessing. If nobody buys the product, you’ve learned something. If customers begin purchasing it repeatedly, you’ve learned something even more useful, and that information can help you decide whether similar merchandise deserves a larger investment in your physical inventory.
What Are the Disadvantages of Dropshipping?
Dropshipping has advantages, but it also has tradeoffs. Because you don’t physically possess eligible dropship merchandise before each sale, you have less direct control over certain parts of the fulfillment process. You also need to stay aware of inventory availability because products can sell out or become unavailable.
Depending on the program, dropshipping may also have different margins or costs than purchasing merchandise wholesale in larger quantities. You may have less flexibility with packaging, bundling or other aspects of fulfillment, and you are depending on another company to successfully complete part of your customer’s transaction.
That’s why choosing a reliable dropshipping supplier matters. Your customer purchased from you, and their experience with the fulfillment of that order can affect how they feel about your business.
Dropshipping Is Not Free Money
There is a version of dropshipping that gets promoted online as though you simply create a website, copy some products onto it, and wait for money to appear. That is not how I teach business, because dropshipping doesn’t eliminate the work required to generate a sale.
You still need to choose products intelligently, understand your customer, market your merchandise, create a recognizable brand, price products correctly, provide customer service, follow the rules of whatever platform you’re selling on, and understand your expenses.
The supplier handles an important part of fulfillment. They do not create your business for you.
You Still Need to Know Your Numbers
Suppose your cost for a dropship product is $8 and you sell it for $20. At first glance, it might look like you’ve made $12, but your actual profit could be affected by selling-platform fees, payment-processing fees, advertising expenses, shipping or fulfillment costs, returns and other business expenses.
This is the same lesson that applies throughout jewelry reselling: don’t confuse the difference between your selling price and your product cost with actual profit.
Our Wholesale Jewelry Profit Margin Calculator can help you estimate what remains after many of these expenses. Whether you physically own the inventory or use dropshipping, the principle is the same: revenue sounds good, but profit pays you.
What Should You Look for in a Dropshipping Supplier?
Your dropshipping supplier may be physically fulfilling orders that your customers associate with your business, so choosing the right supplier matters for more than product price.
Before joining a dropshipping program, make sure you understand what products are available, how orders are submitted, where the merchandise ships from, how shipping charges work, how inventory availability is handled, what packaging is used, what happens when an item sells out, and how returns or order problems are handled.
You should also understand any membership fees, fulfillment costs, selling restrictions or other program requirements before you begin offering products to your customers.
The more clearly you understand the process before your first sale, the easier it will be to explain expectations to your own customers.
Who Is Jewelry Dropshipping Good For?
Dropshipping can make sense for several different types of jewelry sellers. A new reseller may use it to reduce the amount of money required to build an initial product selection, while an established reseller may use it to expand an existing catalog without substantially increasing physical inventory.
It may also be useful for online boutiques, content creators and social sellers who already have an audience interested in jewelry, fashion or accessories. Existing jewelry businesses can use dropshipping alongside traditional wholesale purchasing rather than abandoning a model that already works.
The question isn’t really whether dropshipping is universally good or bad. The better question is whether dropshipping solves a problem in your particular business.
My Annual Dropshipping Membership
After working with jewelry resellers and small businesses for nearly 20 years, I wanted to create a dropshipping option that could complement the way many of our customers already buy and sell jewelry. The result is our annual Dropshipping Membership, which gives active members access to our private dropshipping shopping website and the merchandise available through the program.
The private dropshipping website is not publicly linked. Members receive the website information and access instructions after joining the annual membership.
Membership also includes 10% off purchases at CheapWholesaleJewelry.com, along with additional membership benefits designed to help resellers get started and make use of both traditional wholesale inventory and dropshipping.
That combination is intentional. A member may decide to purchase wholesale jewelry they want to physically own, stock, photograph, bundle or sell live while also using dropshipping to expand the selection available to online customers without purchasing every eligible item upfront.
Build a Jewelry Business With More Than One Tool
If you’ve been following the Ultimate Guide to Jewelry Reselling, you’ve probably noticed that I don’t believe there is one perfect way to build a jewelry business. Factory merchandise can have a place, closeouts can have a place, bulk lots can have a place, handmade merchandise can have a place, and traditional wholesale purchasing can have a place.
Dropshipping can have a place too.
Your job as a reseller isn’t to perfectly copy someone else’s business model. It’s to understand the different tools available to you and decide which combination makes sense for your customers, your available capital, your selling platform and the kind of business you actually want to build.
Frequently Asked Questions About Jewelry Dropshipping
What is jewelry dropshipping?
Jewelry dropshipping is a fulfillment model in which a reseller offers eligible jewelry products without physically stocking each item first. When a customer places an order, the merchandise is fulfilled according to the supplier’s dropshipping process.
Do I have to buy inventory before dropshipping jewelry?
Generally, one of the purposes of dropshipping is to allow sellers to offer eligible products without purchasing and physically stocking each item in advance. Individual programs have their own requirements, costs and terms, so sellers should understand the specific program they are using.
Can I sell wholesale jewelry and dropship jewelry at the same time?
Yes. A hybrid model can allow a reseller to physically stock proven or strategically purchased inventory while using dropshipping to expand the selection available to customers. The two methods can complement each other rather than requiring a business to choose only one.
Is jewelry dropshipping profitable?
Jewelry dropshipping can be profitable, but profitability depends on product cost, selling price, marketplace and payment fees, fulfillment expenses, marketing costs, returns and other business expenses. Sellers should calculate expected profit rather than judging an opportunity solely by the difference between product cost and selling price.
Is dropshipping good for beginners?
Dropshipping can reduce the amount of money a beginner needs to commit to physical inventory, which may make it useful for some new sellers. However, dropshipping does not eliminate the need to market products, attract customers, price merchandise correctly and operate the customer-facing side of the business.
Can I use dropshipping to test jewelry before buying inventory?
Potentially, yes. When appropriate products are available through a dropshipping program, customer response can provide useful information about styles, categories and trends before a reseller makes a larger investment in similar physical inventory.
How do I get access to your dropshipping products?
Access to our private dropshipping shopping website is included with an active annual Dropshipping Membership. The website address and access information are provided to members after joining and are not published publicly.
Ready to Add Dropshipping to Your Jewelry Business?
If you’d like to expand the selection you can offer customers without purchasing every eligible product upfront, our annual Dropshipping Membership gives you another option for building your jewelry resale business. Membership includes access to our private dropshipping website, 10% off purchases at CheapWholesaleJewelry.com, and additional member benefits.
[Learn More About the Annual Dropshipping Membership]
About the Author
Summer Guerrieri is the founder of CheapWholesaleJewelry.com and has nearly 20 years of experience sourcing and selling wholesale fashion jewelry, closeouts and bulk jewelry to resellers and small businesses. She created The Ultimate Wholesale Jewelry Knowledge Base to share practical information based on real-world experience buying, selling, pricing and shipping wholesale jewelry.