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Red Flags to Look Out For When Finding Jewelry Distributors (and How to Avoid Them)

by Richard Alexander about a month ago in tips
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7 Valuable and practical tips to locating good jewelry suppliers

Finding a jewelry distributor can be challenging. With thousands of distributors both local and overseas vying for you to be their client, it’s hard to look for someone that will have the same vision for your business.

Sadly, there are tons of horror stories online about business owners getting duped and scammed by their distributors. Low-quality products, poor service, missing inventories, or worse, distributors going MIA after you paid them.

While everyone agrees that experience is the best teacher, this is the one thing that you don’t want to happen to you. So how do you know if your potential jewelry distributor is bogus or not? Here are the major red flags that you will want to look out for when finding jewelry vendors:

RED FLAG #1: They Don’t Have A Proper Website

The person you met on the Facebook Marketplace might be nice and all but if you’re looking for a jewelry distributor and/or manufacturer, it’s better to do a background check. One of the easiest ways to determine if they’re a legitimate company or not is to check if they have a proper website.

Having an updated website is essential for all companies. It shows professionalism and legitimacy. A website sets legitimate companies apart from the small ones. If they only rely on social media (like Facebook and Instagram) for their business profile and do not invest in a website, it begs the question of their ability to handle larger scale orders.

RED FLAG #2: Prices Are Not Transparent and Consistent

When buying wholesale jewelry, it’s normal to haggle for prices along the way.

But if the company is not honest on their prices upfront, then you might want to take that deal with a grain of salt. Good distributors don’t dilly-dally when it comes to their product listings. Normally, they already have a catalog prepared with the full list of their products and their respective prices. They might even include the bulk discounts on the listing depending on the number of pieces you’re going to order.

Now if the distributor you’re talking to isn’t 100% transparent when it comes to pricing, that alone should make you reconsider. If your distributor keeps changing the prices without any prompted discussion, then that’s a sign to run in the other direction.

Just think of it in the long run — if the pricing of the jewelry you’re getting isn’t stable, then your profit won’t be stable as well.

RED FLAG #3: They Play Favorites

It’s common for different business owners to source their jewelry from the same distributor or manufacturer. A lot of them would actually prefer you to their source if you’re establishing a store that won’t be in direct competition with them.

If you get a referral from someone, then ask for the price range of certain products that were given to them by the distributor. Once you speak to the distributor, check if they will match the price or give it to you for a better rate. If they refuse it without a valid reason (ex. the rate is only given for long-term clients), then you might want to do a little bit of digging into how they price things for their clients. You don’t want to be in business with a distributor that doesn’t play fair when it comes to pricing.

RED FLAG #4: They Refuse To Provide Legal Documents

This should go without saying but only accept business from legitimate companies. Different countries will have different papers that are required by their governments to prove that they are registered companies. These are public documents and permits that should be available as requested or already shown on their website.

Always make a habit to check if the company or person you’re dealing with is registered and the service they provide should match the registration. This significantly lowers your chances of being scammed by a fake company.

RED FLAG #5: Poor Customer Service

Customer service will be your first impression of how they will treat you in the course of your contract. Aside from friendly and professional staff, you should also consider how the company reacts to mishaps and unforeseeable problems.

Great companies that distribute and manufacture jewelry always include after-sales service. Whether it’s coaching you in your business as a beginner in the jewelry industry or helping you make business decisions that are logical and appropriate for the current market.

They do this because they genuinely want you to succeed. Plus, your success will also be beneficial to them. The more you become successful in your jewelry business, the more they can profit from you. So don’t settle for a distributor that makes you feel like you’re not wanted!

RED FLAG #6: They Don’t Take The Time To Discuss Their Responsibilities

Jewelry distributors that force you to speed up on the transactions are a big no-no. If you feel pressured to agree on a contract without fully knowing what’s in it (especially the fine lines), then it’s better to drop the distributor.

Your jewelry distributor should fully disclose all their responsibilities and what falls outside of their scope. This covers basically everything from damaged or defective products to shipping delays, inventory errors, and more. You should be made aware of their contingency plans for whatever happens with your products, man-made or not.

While this might be overreaching for some, this level of preparedness separates good businesses from the great. Knowing your and their responsibilities will save you a lot of time and energy when something undesirable happens in the future.

RED FLAG #7: Distributor Forces You To Buy More

While your jewelry distributor and/or manufacturer is still a business, it’s common courtesy in the industry to not make a profit at the expense of others.

You shouldn’t feel pressured at all to buy jewelry that you know 100% you can’t sell immediately. Many small jewelry businesses have failed because of overstocking. Since we all know that jewelry trends come and go, what customers are willing to buy last week might not be the case for this week.

So the next time that you encounter a jewelry distributor that overtly pressures you to buy more than what you can afford and sell, rethink if you want to pursue or continue being in business with them.

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Richard Alexander

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