The business of buying and selling of gold and other precious metals is worth millions of dollars in Nigeria. They are usually sold in the form of Jewelry such as necklaces and rings not in their raw form. Gold is a particular favorite during weddings, it is given to brides as gifts by their families or even by the husband. The rich also patronize expensive Jewelry business very much. They account for most of the trade in gold and Jewelry business, the most prominent of the trading points being Kano state.
To begin this trade one has to sharpen his sales skills, because excruciating bargaining is involved in order to yield maximum profit. It is usually bought at a lower/bulk price and sold to customers at a higher price, so the better you are at your sales pitch the more you will earn. The business model we are going to employ is the type that involves running the business in a shop, where customers come to buy from you or sell their gold or other precious stone jewelries to you, these may include diamonds, silver, platinum, ruby and of course gold.
Other jewelries are in the fashion category which is where beads making and mass produced plastic jewellery fall in, but we are focusing on the expensive or rather special jewelries in this article. Before you start any preparations make sure you register your business with the CAC first, it is recommended you register it as a sole proprietorship. Below are some of the most important factors that you should keep in mind.
SEE ALSO: Beads Making Tutorials For Beginners
Always Be Aware of the Latest Price
The price of gold fluctuates easily, so every now and then you should check on it to see the latest price figures, because by not doing so you might be selling at a loss or buying at a higher rate when it is supposed to be cheap at the time. You can always find the present value of gold online or from other gold vendors around you that you trust.
Rent a Shop
Find a good market place that is visited by the population of that particular state, and rent a shop there, it is best to find where other gold merchants are and join in. Or if you would rather, you can rent a shop in a shopping mall. Like one of those Shoprite malls, it is more private, posh, and still has a lot of visitors. And you should know that this business exclusively works in the cities, it will fail miserably if attempted in a mid-sized town or village.
Where to Buy Your Jewelry
You can purchase your jewellery from other Jewelry stores at a wholesale price though. Another option is buying from overseas, you will need a contact for this one, a gold merchant who travels overseas often to buy his gold. He takes your order and multiple others extracting his commission when the goods are delivered, because it is cheaper in places like Dubai.
Buying from the general public is also a good revenue earner in the business. People would come trying to sell their precious stone jewelries desperately perhaps due to a death in the family, debt or just to raise some money for something they had in mind. The point is it is always at a giveaway price, you should always be ready to jump at those opportunities by putting away some cash for this specific purpose. But you must ensure that the person presents you with a receipt to confirm it is not stolen property.
You are not expected to stock the shop full of expensive stones like it is some kind of provision store, no. If that be the case the startup cost would be astronomical. For starters it is best to have simple showcases for you jewelries, made of wood and wrapped in black cloth material and covered with glass. The jewelries are laid in the glass showcases.
You will need to carry a carpenter to the shop and show him where you need them so that he can take dimensions. You will need at least three of those a meter long each.
Buy a Gold Testing Kit and Other Essential Tools
The gold testing kit is a combination of acids that will enable you to identify authentic gold metals and how much of it is used in a particular jewellery item. You will also need some other tools for picking really small pieces of gold or diamond, and a measuring scale.
List of Required Items
In the table below is the list of items you will need to start this business. The amount of jewellery to be purchased depends wholly on your budget, it could be from half a million to a million or two.
|Jewelry||Different types and sizes of rings, necklaces, earrings, etc.||400,000|
|Showcases||Made of wooden furniture.||35,000|
|Metal security doors||150,000|
|Shop rent||Situated in the middle of a city.||200,000|
|Gold testing kit||1,760|
|Weighing scale||With a 100g by 0.01g precision.||4,240|
|Receipts||Contact a local printer. Per booklet.||3,500|
Be Mindful of Your Safety and Security
Once you are involved in this trade you don’t have the luxury of staying up late from work. you have to leave your shop before it is too dark because you could be followed and attacked by criminals, and just in case don’t carry cash around with you except if you are dispensing of it immediately.
Install serious security measures in your shop that will ensure the safety of the goods like adding burglar proof steel doors, purchase a safe to store the goods every night before leaving for your home and install alarm systems.
Trading gold, diamonds, silver and other precious jewellery requires a specific set of skills, the testing of the metals, weighing them and other primarily important tasks done during the buying and selling of such jewelleries is only done with a bit of knowledge and practice in the trade.
You could get first-hand knowledge from an already established merchant, it is hard to find that way but it pays off. Or you could join an online training course to learn the essential skills in the business. Alternatively hire someone that is already into the trade like a helper from any gold vendor’s shops to teach you after his work hours. After you are satisfied with your training and knowledge of precious jewellery and how to value them, you are ready to start.