Setting up your own online jewellery shop is very doable, but it does require some homework to ensure you start on the right foot. Beyond making your designs a reality, creating a website (so that you can sell jewellery online) and setting up social media accounts, you’ll need to make sure you handle the more formal side of things.

This includes laws, regulations, and rules, and can be a lot to get to grips with. Let’s take a look at how to navigate the formal aspects of setting up your online jewellery business from home.

Get to grips with the law

When you start off making jewellery for yourself, you don’t need to put much thought into the process apart from the creative aspect. But when you start to sell your jewellery and create a business around your passion, you need to consider not only whether the materials you use are durable and beautiful, but also that they comply with a range of laws.

Taxes and regulations

For starters, you will need to register your business with HMRC and file your tax returns. Depending on how much you earn and whether you choose to be a sole trader or set up shop as a limited company (which we’ll cover in depth later on), you may be liable to pay National Insurance contributions and income tax on your profits. On the plus side, you can deduct any expenses deriving from your business, such as purchasing components or tools. For this reason, you’ll need to keep good track of your earnings, expenses, invoices, and receipts.

What’s more, because you’re selling a product online, you will also need to meet Consumer Rights law and online and distance-selling regulations, which range from ensuring your products are of “satisfactory quality, fit for purpose and as described” to offering the right to cancel an order up to 14 days after delivery.

Picking safe materials

Above all, you’ll need to make sure your jewellery is safe. According to European Union law, which still applies in the UK until after Brexit, and may well continue to apply afterward, your necklaces, earrings, rings and brooches should be free of a number of hazardous materials — the most relevant of which are nickel, cadmium and its compounds and lead and its compounds. This means that, when you source your jewellery components, you need to make sure they don’t contain any of those metals. This might seem easy, but it’s trickier than you might think: a recent survey by the London Trading Standards found that more than half of the low-cost necklaces sold in stalls and shops across the city didn’t comply with the law and had dangerous levels of lead and cadmium. The best way to prevent any problem is to source your components from established, reputable suppliers. Sure, it’s that little bit more expensive over buying off a web page outside the EU, but remember that you are ultimately responsible for what you sell.

Hallmarking

Another consideration to bear in mind is hallmarking. A hallmark guarantees that something described as a precious metal is actually precious. If your pieces contain more than a total of 7.78g of sterling silver, 1g of gold or palladium, or ½ g of platinum, they must be hallmarked for you to sell them as containing sterling silver, gold, palladium or platinum respectively. The hallmarks are done by four assay offices (in London, Birmingham, Sheffield and Edinburgh) and you need to pay a fee for their services, which varies depending on what type of hallmarking you want. There are also several non-compulsory but recommended EU guidelines — ranging from traceability to ethical sourcing of gemstones — that you may want to follow in your business.

Make sure you are covered

Even if you follow the law to the finest detail, things can always go wrong — so you need to make sure you’re covered. At the very least, you’ll need product liability insurance, which protects you against a claim if a customer becomes unwell or is harmed when wearing one of your creations. If you ever plan on selling directly to the public — for example, at a market — you will also want public liability insurance to cover you if someone injures themselves as a result of something you do or of your business activities. If you use precious metals and expensive gemstones, it’s a good idea to get cover for stock and materials and, depending on your investment in tools, it might be worth taking out a dedicated Tools Insurance. If jewellery-making becomes your main income source, you may also want to get business interruption insurance, which protects you if a major issue prevents you from working.

Choose the right shop for you

Another important question to ponder is whether you want to strike out on your own, launching your own website, or use an established crafts platform such as Etsy, Folksy or Amazon Handmade. There are pros and cons to both, but they primarily boil down to a trade-off between keeping your profits in full (if you go solo) and having access to an established customer base (if you go with a platform). Only you can decide what works best for your business, as it will in good part depend on whether you already have a following on Instagram, Facebook or Pinterest, how good you are at marketing yourself and your products and how much you know about creating an online presence.

You’ll also need to think whether you’d like to work from home or rent a workshop. Again, this crucially depends on your individual circumstances but, generally speaking, working from home is a cheaper, faster way to get started if you have enough room to accommodate all your tools, materials and workbench — you can always rent some space later on once the business is thriving.

Create your collections

Whatever shopfront you choose, it’s crucial that you create a collection before you start selling. You want to have enough items that prospective customers visiting your online shop find something to tempt them. However, variety should never come at the expense of style. One of the downsides of the low barriers to entry in online jewellery making is that competition is stiff so having a recognisable, original style that people want will make your designs more sought-after, working in your favour. It’s also important to engage people on a personal level and share the story behind your products and your business — many customers are buying into you, your vision and your dreams as much as into the actual necklace or earring design. And whatever you do, invest in professional, evocative product photography. Pictures can make or break a sale — do you really want a poor shot to scupper the chances of selling a piece you spent hours crafting?  

Protect your designs

There’s nothing more frustrating for a craftsperson than to find a cheap, poorly made copycat version of their design sold somewhere online for half the price. Protecting your work is not as straightforward and easy as you might like, but it is possible. The Guild of Jewellery Designers suggests keeping a record of your designs at every stage of their development and, if appropriate, registering them with the European Union’s Intellectual Property Office, which covers you for 25 years. You should also put an intellectual property right statement on your online shop, and if your work is copied, it’s best to call upon a specialist lawyer rather than confronting people directly.

Think about pricing

When you’re starting out, it may seem logical to price your jewellery low to attract people’s interest. However, there’s a risk in doing so — people may think that a low price means low quality or low craftsmanship, and they may not be prepared to pay more for your products later on, when your business is more established. It’s much better for you to spend some time tracking prices for comparable jewellery pieces and working out the amount of time and the cost of materials that go into your designs, as this will help you determine a fair price. Just make sure you give adequate value to your time — jewellery making may have begun as a hobby for you but, if you want to turn it into a proper business, you need to start remunerating your time as you would an employee’s.

Time to launch

Once you have legalities, stock, shop and pricing all sorted, it’s nearly time to launch. The first decision to make here is whether you want to be a sole trader or a limited company. Again, there are advantages to both. Sole trading is easier to wrap your head around, requires less paperwork and generally comes with a lower National Insurance bill but a limited company ensures your business and your personal life remain separate (which means that you aren’t personally liable for the company’s debts), allows you to separate the salary the company pays you from any dividends you may get and, often, comes across as more professional.

Whichever structure you choose, you should also open a business bank account to keep your personal and professional earnings and expenses clearly separate. Don’t forget that if you are selling products in the UK and your business’s VAT taxable turnover is more than £85,000 a year, you need to register for VAT. And if all this sounds a little too much to take in, don’t worry. We’re on hand to help. Whether you’re looking to register as a limited company or sole trader, or need to register for VAT, we’ve got a number of packages to suit your formation needs. If you’re interested in finding out more, just head over to the register a limited company page for more information.