Should I set-up a workshop and employ a bench jeweller, or use outsourced workshops?

[jamesriddick]

Hi,

I'm really in need of some good advice from someone who knows about running their own workshop and who understand the costs involved.

I run a retail jewellery business in the north of England. We mainly sell bridal jewellery e.g. platinum diamond engagement rings. We purchase the castings based on the customer's requirements which we then get finished/sized/set by 3rd party workshops.

We spend circa £6,000 per month on 3rd Party workshops which is for polishing castings, sizing, setting etc. This doesn't include the costs of the castings or the stones.

We might pay a fixed price of £25 to re-sizing a platinum ring up or down, £40 to polish a platinum casting and to set a single stone. Of course, the cost is offset somewhat because we might give them a casting weighing 6 grams and get back a polishing ring which weight 4.5g and so they keep the extra material to offset the cost.

In terms of volume, we probably have 3-4 castings per day which needs to be polished, set and finished, plus some re-sizing work.

I would love to setup our own workshop, and employ a good bench jeweller to bring in-house a good portion of the work. However, whilst I'm pretty knowledgeable on diamonds, and running a retail jewellery business, I don't know much about the economies of running a small workshop.

I understand there are good customer benefits from having our own on-site workshop. So, if I could understand the financials, and if I knew it wouldn't cost any more than we currently spend, I would probably go ahead.

I have in mind setting up a small workshop with the usual bench equipment plus a laser (as I don't like solder in our platinum rings) and then employing an experienced bench jeweller.

I could presumably save on some of the current £6k per month of 3rd party workshop costs to help offset the increase in my direct costs. I also believe there is an important element of costs recovering the filings etc from finishing platinum castings etc. However, I don't know how much this is?

Are there any jewellers on this forum who have considered this problem? Any advice would be gratefully received

[Goldsmith]

If you have space, how about just setting up a workbench or two, with power and gas source, then rent out the bench spaces to self employed jewellers for a reasonable monthly fee and offer them your work along with the bench space.

Many of my friends in the trade do this now as they cannot guarantee income to employ staff full time.

James

[jamesriddick]

That's an interesting suggestion.

Our business is quite regular. Yes of course there are some peaks and troughs, but the bridal market is fairly constant.

Do you think based on the monthly expenditure I have mentioned, it would make sense to employ someone?

We could also though offer some more space to other freelancers.