Columnists Charles Neugebauer Beads, Beads, Beads - Part 1

Beads, Beads, Beads - Part 1

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Let’s face it, there should be no denying the bead craze that has swept through the jewelry industry.  If you’re anything like I was about a year ago, you may find yourself in quite a quandary, asking yourself, “How will my store handle beads?”

Well, like it or not it’s time to cast your lot into this crazy new world of beads.  As a fellow retailer, it’s only right that I share with you some of my experiences and a lot of what I have learned.  The power of this concept is not without merit.  These little beads generate incredible merchandise turns, decent profit margins, and almost fanatic followers.  It’s a craze that we haven’t seen in many, many years and, for some stores, it’s been a savior.

During the JCK Show 2009, the bead mania was unavoidable; I found no less than 16 separate lines offering their version of the “new age charm bracelet.”  I investigated them all and discovered that just like the different jewelry retail stores, the bead companies fall into a few distinct categories.

The Top Tier

These are powerful brands with great market awareness bolstered by impressive marketing campaigns.  They offer huge selections of quality jewelry and fashion forward, image driven merchandise.  These are the premium brands.

But all this wonder comes with a price tag.  Heavy financial investments are required to buy in, and strict adherence to brand rules and regulations might leave you wondering who really runs your store.  Also, continued commitment to new untested merchandise can eat up the profits that can be generated.

The General Tier

There are many lines that fall into this pack.  They are often brands supported by non-bead parent companies.  These general bead brands can make bead selling affordable and easy.  The quality tends to be good and with little or no initial buy in, a relatively small merchandise footprint, and fast stock replenishing, these brands will give you an opportunity to capture some bead sales.  The weakness in the general category is its lack of brand awareness and the mobs of potential buyers.  They also are a fashion step or two behind the premium brands as they tend to be rather copy-cat in nature.

The “Niche” Tier

Made of brands that offer a unique twist on the conventional or a unique angle, these could be a safe starting point and work well in your particular market.  That they fill that niche is their strength, but also their weakness.  If that special niche gets crowded by competitors or demand fades, they will be the first to go and you could be left looking out of touch.

The “Wanna-Be” Tier

This is made up of all sorts of brands that focus mostly on copying the hot look then discounting it.  They tend to have promotions such as “buy 2, get 1 free” or free gifts with every purchase.  However, that low price tag can translate to poor quality and they tend to be gimmick driven.  They will appeal more to the impulse buyer than the true fan.

Now, we’ve managed to boil these various lines down into a few general categories.  Their apparent value to your store seems evident in the popularity and saleability.  That wasn’t so bad, was it?

Well, not so fast - in part two we will examine some major objections you will need to overcome such as, are beads just a trend whose time has almost passed? Do I want to spend an hour to sell one $25 bead? And do these beads even belong in a fine jeweler’s inventory?

Part 2 will follow in next month’s column.

Charles Neugebauer is a second generation master jeweler and owner of The Gilded Artisan, a trade shop and retail store in Colorado Springs, Colorado.  He is also a GIA Graduate Gemologist and GIA Accredited Jewelry Professional. To contact Charles, please e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

 
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