Finance Worker Strikes Gold with Custom Jewelry

This transcript was generated from the episode audio and may contain minor errors.

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Hey everybody, what's up? Welcome to Side Hustle School. This is your host, Chris Guillebeau. Thank you for tuning in today. It's episode 1695, coming up on the 1700th consecutive day of the podcast.

Thanks to your support because you were awesome. Now, of all the ideas you could pursue, this podcast is, by the way, about finding and pursuing profitable ideas. Of all the ideas you could pursue, I encourage you to choose one that offers a good margin, a good profit margin specifically. What is that margin? Well, it is at least 100% and probably more.

And of course, this varies by industry. We're gonna talk about it, but the point is that whatever it costs you to make something or acquire something, produce something, you want to at least be doubling your money on it. And this doesn't mean you are a greedy robber baron. No offense to any greedy robber barons out there. It means you're trying to build a sustainable business.

Many industries have guidelines about margins, including the jewelry industry that we're gonna focus on here today. Other times it's harder to look at someone selling the same thing and figure out what to charge, especially if you're making something that has no obvious comp. Like you can't point to somebody else and say, well, this is what they're charging. Therefore, here's my price. Messaging and how you present your offer becomes even more important.

So we won't be able to cover all that in detail in today's short episode, but we're gonna focus specifically on the point about margin. The story is finance worker strikes gold with custom jewelry. That story is coming up in just 30 seconds. [Music]

Lexi Taub had it all, a degree, a career in finance, and a loving boyfriend. Yet despite all these things, she also had a nagging feeling that something was missing.

All the glitters is not gold, right? And Lexi had always wanted to do something for herself. All she needed was the right idea. Lexi's mom was in the jewelry business. So when her boyfriend, that would be Lexi's boyfriend, wanted to buy her a pair of beautiful earrings as a present, he went to her mom for advice.

He had found a pair of earrings he loved for $1,600. Lexi's mom made a replica of those earrings, which looked almost exactly the same and only charged him $165, about 10% of the original price. The boyfriend was amazed and incredibly grateful. However, after he gave them to Lexi and told her the whole story, he also confessed that he felt that Lexi's mom had undercharged him. But the more they learned about pricing in the industry, the more things clicked into place.

See, when it comes to the jewelry business, every person involved in the supply chain marks the price up by at least 100%, often 200%. So if it caused the manufacturer $165 to make, they will then sell it to a designer for $330. The designer will sell it to a store for $660 and the store will sell it to the customer for about $1,300. You can see how it works. All those different steps in the process, each step along the way, the price doubles.

Lexi thought this could be a good business to go into. After all, her mom was already doing it. The idea began to crystallize in her mind. If she could learn from her mom, she too could make high quality jewelry for a fraction of the retail cost and cut out all those middlemen. The hardest part would be how to showcase inventory.

Lexi wanted her customers to be able to customize any jewelry they wanted, but she still wanted to provide some photos of work she'd done in the past to give them ideas. Plus, this would help her build credibility. However, making a bunch of pieces without a solid customer base could end up being very costly. So in true side hustler fashion, Lexi got creative. Her mom had made jewelry at a discounted rate for many family members and friends.

These were similar pieces as what Lexi intended to make, so she reached out to as many of them as she could and asked if she could photograph the pieces for her new website. She then took the photos and commissioned a logo from a graphic designer. With that, she was able to get her site up and running. After starting on Squarespace, she soon moved to Shopify. It turned out it was easier to build a website on Squarespace, but Lexi felt that Shopify had much better built-in SEO capabilities.

Not only that, but Shopify also has more integration opportunities, which allows you to work with different software and apps. One feature in particular called Google Smart Campaigns ended up being instrumental to her success. It also led to her first sale. Up until this point, Lexi had just been telling her friends and family about the new venture. Finally, she got a sale on her website from someone neither she nor her mom knew.

They screamed excitedly on the phone together and then got to work fashioning an Emerald tennis bracelet. The switch to Shopify and Google Smart Campaigns helped Lexi receive a few sales every week. As they got more sales, Lexi began to reinvest the money she was making. She found someone to optimize her SEO. He began to refine her product descriptions and also wrote a number of blog posts.

Then she found a graphic designer from France to help her build out her brand identity. The designer created a better logo, chose colors and fonts for the business and more. Once all of that was in place, Lexi hired a marketing agency to do more than just the Google campaigns. She increased her ad spend significantly and also began to use Instagram and Facebook ads. Finally, she designed email sequences that would offer a discount whenever someone signed up for her newsletter.

Revenue continued to increase. In just two and a half years after starting, Lexi quit her job to run the business. And what does this look like in terms of numbers? Well, the business brings in about $20,000 in revenue every month. And at this point, Lexi is still reinvesting some of that into growth, but she's also living comfortably, doing her side hustle full time.

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When you have a good profit margin, meaning you can at least double your money on whatever it costs you to produce or acquire something and potentially even more than double it, then you are able to invest more in your business. You're able to take more risk. You're able to make some mistakes even. And if not everything works perfectly, then that's okay because you've built this cushion, that's another word for margin, at least another meaning of it in this case, because you've built that cushion into your business. So that's why when you're trying to decide between different ideas, I think it's always very helpful to say, well, which ideas are the most profitable?

Which ones are going to cost the least for me to develop or acquire? And then what can I charge a premium price for? Always a good idea. One more note from Lexi, a mistake that she mentioned making. She says, "I hired people that were cheaper and in the end I couldn't use their end product." When she's beginning to like outsource some of the supply chain.

She said she's now found some amazing people to work with, but she doesn't regret it because she wouldn't know how amazing they are if she hadn't had those obstacles first. So keep that in mind as well. Sometimes the obstacles lead you to a much better destination in the end. Inspiration is good, but inspiration with action is so much better. Today's show notes, including links to Lexi's site, anything else I mentioned in the episode, maybe some stuff on profit margins, who knows.

Go to sidehustleschool.com/16951695. Be sure to do something for yourself today. Try to get a little bit closer to something you're working on. I hope you'll come back tomorrow. My name is Chris Guillebeau.

You're listening to Side Hustle School. [Music]