Today we are going to talk about logistics in jewelry eCommerce. Why is it important? We often see people – we call them “technologists” – who say “I have created the best template for eBay. I have researched all of eBay’s item specifics and put everything into place. I have performed some analytics on the best keywords on Etsy and I have copied the most successful bullets on Amazon listings, and my items do not sell.” The mistake, in this case, is that selling jewelry online is not only about the technology of online sales, but about the whole spectrum of business ingredients. Understanding the most important ingredients in selling jewelry online is critical, and logistics and fulfillment is definitely one of them.
Logistics and jewelry eCommerce
Imagine that you have the best jewelry product, you know your niche inside out and you know that your sourcing is good enough to beat the competition in the marketplace. But it is still not enough. Besides the product itself, you have to prepare it in the correct way for your clients and for your business. We see the three main parameters of this product preparation:
- Technology – knowing how to sell jewelry online
- Customer service – being able to maintain the correct sales and service operation
- Logistics – handling the physical transport of your jewelry between you and your client
These 3 ingredients provide the foundation for your online sales. If you want to sell your beautiful jewelry online, you have to concentrate on all these 3 components. Today we are going to talk about logistics.
Let us go back to the economic theories for a second. A very important concept in the theory of consumption is home bias. What does it mean? If I have the same product placed near my home or I have the same product somewhere far from my home, I will always prefer to buy close to my home. Why does it happen? It’s simple. I feel safer if I have the product close to me. Ideally, I would like to get my hands on it and check it with own eyes and all my senses. But online we do not have this privilege, our client has to buy the product without actually seeing it and feeling it, and this uncertainty becomes more critical and influences our online sales strongly.
Emotional aspects of consumption
An additional reason for the importance of logistics, especially in jewelry, is that the purchase is emotional. This means that once I decide to buy a piece of jewelry, I want to have it now, or even better, yesterday. While we don’t have to build a time machine, we do have to understand this idea. The faster our potential buyer gets a chance to receive the item, the higher the chances they will purchase it. For example, in the wedding and engagement jewelry, if the guy wants to propose to his girlfriend, he might need the item by tomorrow.
Logistics play a very important role and influence the success of your eCommerce business drastically. It is not enough to be a technologist and to know all the ‘Best Match’ algorithms of eBay, and how to optimize the Amazon bullets, and what the title length is, and the SEO practices for Google and Facebook… That’s just the technology of sales. Actually, your product and logistics are equally important. We see amazing cases, when only by improving the logistics, online sales go up hundreds of percents, without changing anything in the product and technology, and giving the same customer service. Very simple – it adds trust to the equation.
Improving handling time
Now, what are the actual to-dos when we think about logistics and creating the plan to improve it? As said previously, the first idea is to ship your jewelry quickly. Fast handling is crucial. Firstly, our client wants to get the product tomorrow. Secondly, marketplaces need measurable performance indicators of your business, and the handling time is one of them. It is very easy for any marketplace to count the amount of days that took you to ship your jewelry.Whether you ship the item in three days or in two weeks, it’ll make a huge difference.
Clearly, if you have 3,000 different items in your store, it is impossible to have all stock ready for shipment, especially in case of fine jewelry where the prices can reach $5,000 or even $10,000. Even in fashion jewelry, with relatively low pricing, it is impossible to have 3,000 different SKUs ready for shipment – it is an impossible budget. Also, a high percentage of jewelry orders are customized, and the item is created after the order was made.
How can this issue be resolved? Lower the handling time gradually. Identify the bestsellers of your jewelry, and do it as soon as possible. If you have specific 10 items that are sold once a day / a week / a month – this is something that can be counted and estimated. Take those 10 bestselling items and get them ready in stock, in the amount you can estimate that will be ordered in the next 2 months. There are many additional benefits that come up when you start to create these items. The cost of production will go down, so your sourcing actually becomes better. If you are a jewelry e-tailer and don’t produce yourself, you will get better prices from your source. Make an estimation based on your last months (usually around three months) and derive how many items you can order. Make sure that your logistics for the best selling items will be perfect, and that these items will be shipped quickly.
Be a jeweler, not a post officer
Here’s another small but important thing that we often come by, especially for jewelry designers who actually create their jewelry at home: Almost every country has a service to pick up items from your location. Use it- you are not a post office, you are a jeweler. You should be doing more jewelry and less logistics. And it is possible to save a lot of time and shorten the handling time simply by using the pick up service from your post carrier. It might add a small cost to your post expenses, but it will definitely free up time for you to keep doing your job.
What is a fulfillment service? If I want to put my items near my clients, and I know where my target audience is placed geographically, I don’t have to create my own logistics company. There are many fulfillment centers today in the world like FBA (Fulfilled By Amazon) , EFS and AIB which are used in the e-commerce businesses for one simple thing. You can store items somewhere close to the client, and for a small fee ($4-$6 for delivery) it will be picked up, wrapped up, and sent to the client without your involvement. Why is this important?
- Again, you are a jeweler. You should be working on your jewelry and not traveling to the post office and back.
- Second, the goal is to provide the best customer service and experience. With the right technology, by integrating your sales channels with the fulfillment center, the moment you receive the order (on eBay, Etsy, Amazon, your website or any other) and it has been paid for, your inventory system updates the fulfillment center (FBA for example) and in 24 hours your jewelry is sent to the client. Putting items in fulfillment centers will allow you to provide 24-hour delivery, next day delivery and additional services to your client, which you won’t be able to offer yourself.
- It saves a lot of manpower. When you find yourself with 100 and sometimes 1,000 items being sent each month, you need a team of at least five people to deal with it.
- Handling holiday peaks. On Christmas, Mother’s Day, Valentine’s or some local holiday, your sales peak. Sometimes up hundreds of percents. You have two options – either bring additional people into your office (meaning- hiring, training, firing etc’) or work with the fulfillment centers who have endless manpower capacity to handle your items.
Does it really matter? It is a growth of dozens and sometimes hundreds percent in sales. Simple as that.
We advise our clients to estimate the orders for the next three months of operation and put these quick-selling items to the fulfillment center. If it is not possible to fulfill the center for three months, start with setting the available budget and calculate backwards – see what stock you can put in fulfillment centers for now. The budget will quickly pay itself back.
Selecting the jewelry for fulfillment
The first type of jewelry to send into fulfillment is quick-sellers. Quick-sellers are items that are sold quickly and that you can make a good estimate of for the next three months’ delivery and sending, and can be produced / sourced without limitation. The main goal of quick-sellers is to get your main items (not necessarily quick-sellers) rank higher in the search result of the marketplace. With unique items I won’t enjoy the effect of fulfillment as much as with repeatable items. Why?
In order to understand this better, let’s go back to the marketplace technology for a moment. Our goal is to help our online jewelry store in eBay / Amazon grow. This can be achieved through better ranking on the marketplace. There are two ways your store / items can be promoted in the marketplaces. The first is per item and the second is per store. What does it mean? First, if there is an item that was sold 20 times, and all customer reviews are positive, naturally this item will appear on the top of search results. That’s because second, when eBay, Amazon or Etsy evaluate items from 2 stores, one with 10 successful sales and other with 1000 sales, the marketplace will prefer the item from the more experienced store. So, quick-sellers will also take up all the results in my store.
How does it happen that on every marketplace, some items get “stuck” on the first lines of the search results? Simple. If I have an item that was sold 20 times, or 500 times (depends on the category you are selling in), it creates a history of successful deals on this product. This sends a positive market signal. So if I use my fulfillment to actually boost my store performance, I select items that can create this history. This history cannot be created for an item that I have just one of in stock, or 5 and I will not be able to buy more of them and add to my fulfillment center. In contrast, if I have an item that I know I can always reproduce or re-source, and restock my fulfillment center, these are the correct items. These items will be able to reach this good history of 5, 10, 50 sales, and so on.
Jewelry types. The items that are sent to the fulfillment center should require less customization. That’s why we don’t suggest sending rings to fulfillment centers, for example. Because when I have to send 10 different sizes to the fulfillment center (or even more with 1/4 sizes), I will not be able to create some significant stock of each variation of the specific ring. I will have to sell it in white gold, yellow gold, and red gold, multiplied by ten different sizes, for example, and it is already thirty variations of the ring that you have to physically create and send. The budget for this operation will be much higher compared to earrings or a bracelet, or a necklace. For this types of jewelry the only variation will be red gold, yellow gold, and white gold, or maybe a gemstone.
From our experience, it is better not to send rings to fulfillment centers, because the chance of receiving 100% positive feedback from your clients in rings is a bit lower. Not because of the ring, but simply because people sometimes do not know their measurements right, and there is a chance that there will be also a request to return the item.
Make sure that the item you are selling has some variations to increase the chance of selling it. On the other hand, there shouldn’t be too many variations of the item and preferably not rings.
Start gradually. Start with only a few SKUs and learn to work with the selected fulfillment service provider. Check their communication and service, the sending requirements, precision in fulfillment. Send at least 5-10 shipments to the center and work with them for few months. Learn which jewelry reacts better to the change. If it goes well and brings results – gradually increase the inventory. With time, analyse your market and use more than one inventory, according to the audience you want to strengthen.
Returns are very important. Clear return policies play a very important role in your sales. Why? Because it increases your jewelry store’s trustworthiness. The client, who has no ability to touch the ring or the necklace, and yet has to decide about purchasing, wants to be sure that even if it didn’t work out well, he will have the ability to return the item. If you are sure that everything goes well with your products, simply increasing the return period (f.i. from 30 days to 60 days) does wonders to your online store performance.
Selling jewelry internationally? The bad news is that buyers definitely don’t like to return their items overseas. They just don’t know how to do it. Therefore, using the fulfillment center for localized returns service is an additional step to a better customer experience, which means higher sales for your jewelry.
Jewelry Logistics Best Practices
An advanced technique, used especially in international jewelry sales is consolidation. The consolidation means that you get a local partner near your target audience, who will receive a consolidated shipment of 5/10/100 items together, and then re-distribute it from the local address. This technique can save you big costs on shipment. In addition, the virtual location for your jewelry changes from abroad to local (remember the home bias?), and your buyers will consider the purchase as safer. This approach can be used both in delivery to the clients and back for the returns, making your logistics more effective.
In your jewelry eCommerce, you have a very important partner. It is your post carrier, the one who will do all the sending. So make sure you choose the right one. It’s amazing how the logistics can improve if you reduce the cost of sending of your jewelry. For example, from $60 to $30. These are very important numbers. Saving $30 on a $500 purchase can significantly change your price proposition to the client. Stay proactively in contact with your carrier. Bargain to get better prices.
Do not get stuck with your provider. At least once a year research and choose the best logistics operator for your business. There is definitely no shame in switching carrier from time to time. Work with more than one carrier, and optimize what they offer to your jewelry. It can save a lot of money in international shipping, or alternatively, you can provide a much better offer. In addition to standard economy shipping, you can take it higher by quick shipping with next-day delivery by FedEx, or other providers.
Abiding by the rules
And the last two things to remember – play by the rules. Playing by the rules means checking the legal aspects. Make sure that you send your items legally because you are building a long-term business and do not want to waste time explaining to local authorities why your item was sold to a country that you are not allowed to sell jewelry to. Or why when your client has returned the item, it was considered by the authorities an illegal import of the jewelry. To avoid these situations, make sure that you are playing by the rules. Post carriers such as FedEx and DHL often become a good source of information for such questions. Simply visit them and ask questions – nothing beats years of experience.
Use good insurance. A good bargain can make insurance very affordable, especially by lowering the minimum payment to the insurance company. If you are able to lower it from $50 to $20, in fine jewelry or diamond jewelry, it saves you $30 on each delivery. Of course, switching to the monthly calculated fee (f.i. 0.3% of the delivery or even 0.1% if you are strong enough) will also significantly improve the offering to buyers.
To summarize, when selling jewelry online, it’s important to understand what your buyers really buy. Your offering is not only the product but everything around it. Always keep in mind the 3 ingredients of a successful jewelry business, with logistics being one of them. Get local, get quick, use fulfillment centers, and learn the legal part. These will be a real game-changer.