How to Make a Profitable Business Cutting Gemstones
My name is Nicholas Alexander and I have been a professional gemstone cutter for the last 7 years of my career. I have had the privilege to watch and learn a lot through these last few years of my career. My father, Darryl Alexander, was also a professional gemstone cutter with many prestigious awards gifted to him. As I grew up I got to watch the different things he did in order to make his business grow and prosper. I also got to grow my own lapidary cutting business and make a name for myself within the industry as I grew older. By doing so, I learned the inner workings of the lapidary industry and what it takes to create a profitable business within it.
Ever since I was a child I loved to analyze the inner workings of businesses. I was fascinated by business, and how different marketplaces worked. As I mentioned, I grew up in a "Lapidary household." I went to gem shows from the minute I could walk, and I went along on all of my fathers meetings, trips, and seminars with his business clients and colleagues. The knowledge passed to me was immense and this article will go over some of the different key topics and skills that I learned that are required in order to make a profitable business within the lapidary industry.
Finding Your Niche
Just like starting any company, you need to develop a clear game plan on how you are going to actually start making money. Before you can begin making money within the lapidary industry, you will need to figure out what type of cutting you would like to do. There are a few different methods of gemstone cutting. A few to choose from are Faceting, Carving, Cabbing, Inlaying, and Tumbling. These will be the largest categories for cutting that pay well. Depending on which one you choose will decide how much someone will value your time and skill. For example, someone who tumbles gemstones will not get paid as much and will need to do more quantity compared to someone who carves gemstone.
This is not a bad thing. It is not hard to run 5-8 tumblers all at once and do the quantity needed to make a profitable business tumbling. However, it very much depends on what your skills are and what you enjoy doing. I would suggest trying them all out before making a decision. The categories are all very different and present different challenges which might fit your skill sets better. Find which one works for you and then begin figuring out how you can present something new, or do something better within that market.
For example, if you enjoy faceting and want to start a business, you have a few different options. First, you could repair work for chipped stones. There are a ton of jewelers local to you and around the country who break stones everyday while setting. Someone has to re-facet them right? Rather than that, you could aim to be a traditional facetor who cuts traditional gemstones for businesses or jewelry stores. Another option is to be an individual artist who sells to designers and collectors.
Each of the different categories above (Faceting, Cabbing, Carving, Inlaying, and Tumbling) can be broken down to different jobs within that industry. It is your responsibility to figure out those jobs and get really good at one of them. Before you start your business you need a good game plan on how you would like to begin. We will discuss this further in the next section.
Starting the Business
There are many different things that need to get done when you are starting a business. Fortunately, if done correctly, it will not cost too much money. It will just take some time.
Begin with filing for an LLC. The easiest way to do it is online with a company who has been vetted and has good reviews. More expensive does not mean they are going to do a better job. I find that LegalZoom is the best one to use however they have a lot of expensive add-ons they will try to sell to you. If you are on a budget then ZenBusiness is a great website to file for an LLC.
While that is getting processed, you will want to create a social media account on Instagram, Facebook, and any other social medias that you feel comfortable with. This is an important stage in the branding of your business. These will be your main points of contact for your customers. You will also get good sales if you are marketing correctly, posting daily, and having quality photos/videos uploaded.
You will also need to begin thinking about what you want your main platform to be to sell your gemstones, market your company, or explain your artistic/lapidary background. We will discuss in more detail different options you have later in this article.
Next, you will need to decide whether you want to open a second phone line for your business. It will cost about $60 per month to have a virtual assistant and second phone line added. This way you can easily tell the difference between a business call and a personal call from your cell phone and have people directed to the correct voicemails if you don't answer.
Lastly, you will need to decide whether opening a separate bank account is necessary. You want this decided before you begin selling your product or service. I do suggest it if you have the capabilities. It will be much easier as your business grows.
Necessary Tools & Equipment
If you do not have them already, getting the necessary tools will be your largest expense to get your business up and running. Depending on what you decided to do, you will need to research and acquire the equipment needed to complete your jobs. Cutting Edge Supply has a ton of different articles to help people get started with machinery under the "Lapidary Library" tab.
You will have two options while finding the equipment. You can buy new or used equipment. If you are looking for used then I would suggest checking your local craigslist, offerup, and ebay. Someone is usually selling a few lapidary machines that still run well. If you are buying new, then find a reputable dealer of the product you are looking for. Make sure they have good reviews and have clear pricings and descriptions.
Networking can be done with no money and if its done successfully then it will be worth more than money itself. There are a ton of great people within the lapidary industry and it is important to try and meet everyone! Begin with your local lapidary clubs and schools. There are usually 10-20 people who will love to tell you about local gem shows, cool rockhounding spots, and different ways they have made money in the past within the industry.
Other great spots to connect are gem shows, art events, and mining fee digs. Depending on what you are trying to sell you can mention that you are getting ready to start a lapidary company. You will be surprised the different jobs that will come up and calls you will get. For the most part you will find that the lapidary community is very tight knit and word gets around quickly.
How to Sell
As mentioned before, you will need to decide on a platform to sell your goods/services. A few different options are a website, etsy, gem shows, and ebay. I believe when starting out, that an etsy page can do many people justice. If you are selling a service then you may need to create a website. This way you can better market your business and explain your service. Etsy will be the most cost effective and least amount of work for someone who is selling singular stones or jewelry. However, you will have more freedom with a website since it costs a little more and requires you to design it. However, platforms like WooCommerce and Shopify have made designing a website extremely easy compared to 10 years ago when you had to hire a programmer. So an experienced cutter who sells singular stones might want to look at creating a website as well.
Once you have decided on a platform, begin customizing it and uploading your products/services. Share it when you are done on the social media platforms you created earlier and begin gaining followers. As I said earlier, word of mouth will be a key distributor for getting your sales off the ground. The lapidary community is tight knit and a good review means a lot when it starts to get passed around. Work hard to get your name out there. Try to make an appearance on social media and online the best you can.
The Math - How Much Can a Lapidary Artist Make?
This is a key question to ask when deciding if you want to start a company and also when you are finalizing your papers and game plan to build the business. The truth is, in the lapidary industry the possibilities are endless! You can create anything from a high cash flow business to a low cash flow business because it is all up to you. Fortunately there are no rules. However, I'll break down how some of the math will go in order to create a business in each category.
Faceting pays well for your time because of the skills and knowledge required in order to facet a nice stone. The examples below is for an average to good facetor.
A facetor will buy a rough piece of suntone for $10/ct. The rough piece of stone weighs 10cts making the total $100. Once it is cut it weights 3.5cts and can sell for $100/ct. This makes the stone worth $350 after it has been cut. The profit would be $250. If the stone took 5 hours to cut then the cutter would be making about $40/hr after paying for some advertising and the platforms you are using to process payments and run your business. I find that someone with this business method will make $25-75/hr depending on their quality, skill, speed, and the type of material they are cutting. Knowing what rough prices are good deals is also an extremely valuable asset when trying to raise your net profits. Facet rough can get very expensive and without knowing you can decrease the amount of money you put in your pocket by the deals you make on rough.
The average cutter also only gets about a 25% yield while cutting. Which means 75% of the stone gets cut away when faceting. However, an experienced cutter knows how to retain 35-50% of the stone which results in a larger and more expensive stone, even though you started with the exact same piece of material.
Another example would be someone who re-facets gemstones. If someone chips a 3ct sapphire and needs it recut, then an average price to recut would be $100. An experienced cutter should be able to re-facet a gemstone in about 2-3 hours. Therefore making their pay around $30/hr after taking out business expenses.
Carving is very similar to faceting when it comes to hourly rates. Carvers are paid well for there time due to the level of skill you need in order to accomplish the job effectively.If you price by weight then carving can even yield higher pay than faceting because you loose a lot less material when you carve something compared to faceting.
A gemstone carver may purchase a 25g piece of Ethiopian opal for $250 and spend 6 hours carving it. Once completed it may weigh 65cts and sell for $10/ct resulting in $400 in profit. Which in return would be around $60/hr. I find that gemstone carvers make an average of $20-100/hr depending on skill, speed, and the material being cut.
Cabbing gemstones is different than faceting or carving when it comes to pay. Someone who carves gemstones needs to cut more than 1 stone every few hours. Someone who cabs will need to be able to cab a gemstone every 10-15 minutes.
If someone comes to a lapidary artist with 500g of turquoise (20pcs) to cab, then an average rate of pay would be $1/g. Which would result in about $225 of profit. The average yield when cutting cabochons is around 45%. If it takes the cutter 5 hours then it would be $40/hr after business expenses.
There are ways of increasing the amount of cabs you cut each hour by tumble finishing batches of stones rather than hand finishing each one.
Gem shows are one of the best ways to get your name out there, network, and make sales. Try getting a booth at a local rock show or, if you want, get a booth at a show like the Tucson Gem Show or Denver Gem Show.
You will find a ton of people who are involved in and interested in your industry. As you go more and more to these shows you will begin to develop different relationships that can help you further your knowledge, sales, and/or network.
Booths at a gem show range anywhere from $50 for a small booth at a local art fair, up to $5000 per spot for top-end gem shows. As you learn your market and sales you will begin to understand what booth spaces will be worth it for you.
Quality and Skills
In the end, what will decide whether you have a great business or a good business will be the quality of your work. People will pay top-dollar for high-quality work. Master the skills you are using in order to stand out from the crowd. Continue taking your work to the next level so that people continue to admire and purchase from you.
Gemstone cutters should focus more on how well something is done rather than how much they are getting paid once it's done. Maintaining quality and making it an important value for your business will create a business structure that is long lasting and beneficial to the artist and the consumers.
It is not very hard to start and grow a lapidary business into a side hustle or your main job. However, it will take some determination, imagination, and skill in order to succeed. Lapidary artists can be paid well, especially once you master the art and being a lapidary artist also can give you a ton of freedom with your time. More than likely you will be making your own schedule and deciding when it is necessary to work. This can be a blessing, as well as a hindrance depending on your work ethic, so make sure you are in the right mindset as you start to master your craft. Do not let any imperfections remain on your stones and show people what quality you are getting with your stones. Focus on quality, reliability, and persistence so that you can stand out from everyone else.
Social Media will be your best friend when it comes to scaling your business. Make sure to have a solid social media presence and begin gaining followers as early and as quickly as you can. You will be amazed how quickly your business will take off if you have good products or services.
Gem shows can be a key to success for many inspiring artists. Building a customer base and networking will be important while you are attending these shows. Make sure to meet people who are where you would like to be, then ask and learn how they got there. Many people in the industry would love to share!
If you have questions about starting a business, or would like some help when it comes to advertising, setting up a website, or getting the necessary tools, please feel free to contact us! We will be happy to help here at Cutting Edge Supply