Gold, the yellow metal is not only precious but also a good source of investment as the price of gold gets appreciated at a steady rate. Hence if you have decided to start a gold business then you have taken the right decision.
The gold business is not limited to buying and selling gold jewelry or coins. It includes plenty of other niches like gold mutual funds or gold bonds etc. You can choose any of them according to your convenience and investment.
Before you start with your gold-related business, you must have a fairly good idea of the nature of the business, prospective clients, the approximate percentage of profit, etc. Get the relevant information that will help you in starting your business.
Along with knowledge about the business, get a good idea of the rules and regulations required to start your business. Different sets of rules are there for each kind of business. You can proceed with your business without the knowledge of these rules.
Is Gold Business Profitable?
The single-word answer is yes. If you go through records, you will find that gold prices show a rise every 3-5 years. Sometimes prices rise within a short period of 6-10 months. Therefore, it can be said that you will earn a steady income from buying and selling gold.
Statistics also show a rise in gold-related businesses globally. According to Statista, gold prices are expected to rise within the next 5 years which is hopeful news for buying and selling gold. As per the latest report, the gold jewelry market is also expected to rise by 2025.
Here are the 16 Steps to Start a Gold Business
Learn the Types of Gold Business
Gold business has many types and all of them do not require you to have real gold with you. The common forms of gold business are the following:
- Selling Gold Jewelry
- Buying and Selling Gold Coins
- Buying Scrap Gold and Selling Finished Products
- Selling Gold plated jewelry, utensils, or other luxury items
Since the price of gold fluctuates often, it is always wise to buy gold when the price is low and sell them when it is soaring.
2. Gather Knowledge About Each Niche
Before you decide on the niche you wish to pursue, you must know thoroughly about each niche. For example, if you want to start a jewelry shop, or want to buy and sell coins, you will need physical gold. is an important step and must be taken before you start a gold business.
3. Understand the Market
Get relevant data and information on the demographic profile of the area where you want to start your gold business. This will include average age, number of people in your target age group, economic condition, profession, purchasing power, etc. Also, take note of the competitors of your gold business in the area.
This is very important because according to the output of this research, you have to decide on the nature of your gold company. Apart from that, these data will help you in determining the prospect of your gold business.
4. Decide Your Niche
After you have collected the relevant data and gained the necessary knowledge about the nature of each niche of the gold industry, it is time for you to decide on the niche. Take a good view of all the points of each type, consider the pros and cons, and then decide on your niche. You can consult a financial expert before you choose the niche.
Whatever niche you choose, you have to be extremely well-conversant with the price of gold in the market. Keeping regular track of the rise and fall of prices will play a key role in the success of your gold business.
5. Make a Business Plan
Whatever your gold business niche, making a business plan is very important for starting a gold-buying and selling company. By making the business plan, you will have all the necessary details of your gold business in one place and have a clear idea of all the necessary steps. Consult a gold-business expert or a banking/investment expert in making the business plan.
The business plan of your gold business must have the mission and vision of the business, legal and official requirements, funds required, source of funds, expense heads, the approximate rate of profit, period of earning your first profit, the projection for the next 2-5 years, etc.
6. Name Your Gold Business
In the next step, find a good name for your gold business. If are opening a jewelry shop, find a suitable name. Find a meaningful and catchy name that is easy to remember. Don’t go for a very long name.
Also, after you select your name, do not forget to create a catchy logo for your gold business.
7. Find a Website Domain
After you finalize the name, get a domain in the name of your business. Here you may face the problem of not getting a domain in the name of your gold business. Hence keep some other chosen names on the shortlist.
Another convenient way is to take the help of online name generators or portals that give you information regarding the availability of the website domain URL in your chosen name.
8. Legal Compliances
After name and domain, you have to give legal status to your gold business, for whichever niche you have chosen. There are various forms of business organization as sole proprietorship, partnership, LLC, Corporation, etc. Consult your legal expert and choose the right status for your business,
9. Apply for Taxes
Register your gold business for the necessary taxes both at the Federal as well as state levels. Payment of taxes in the stipulated time is very important for your business. Get the EIN or Employer Identification Number.
10. License and Permits
Apply for the necessary license and permits for your gold business. This is an important step, because without paying the license and permits in time, you may have to face many problems.
11. Buy Business Insurance
Get the necessary insurance for your gold business. Consult an insurance expert for this. In the beginning, you may start with General Liability Insurance, Payment Protection Insurance, and Workers’ Compensation Insurance.
12. Arrange Funds
The requirement of funds depends on the nature of the gold business. If you want to start buying and selling physical gold coins, bars, or ornaments you will need approximately $2500-3000 to start with. If it is a jewelry store, you will need an extra $ 10000 for the store and its interior and another $5000 for the salary of staff, etc.
13. Calculate the Profit Margin
The profit margin depends on the price of gold and its fluctuations. If the price is on a rising curve, you will have high profits ranging between 5% and can go higher up to 20-25%. If the price remains constant you have to wait for the price to rise. However, the recent trends show a rise in prices which ensures comfortable profit for you.
14. Arrange Fund
Depending on your niche and the amount of investment you can utilize different types of sources for your gold business like personal savings, loans from family or friends, bank loans, selling shares to investors, business grants or money from angel investors, etc.
15. Heads of Expense
The expense will be incurred in various heads according to the nature of your gold business. Common expense heads include setting up an office, shop, or showroom, furniture, computer, printer, salaries of staff, conveyance, taxes, insurance premiums, etc.
16. Have a Marketing Program
It is without saying, marketing is one of the most important elements in any business. You have to chalk out a detailed and well-thought marketing program from the beginning to ensure the best results and high revenue. Some important aspects of your marketing plan are:
a) Create a Website
Modern-day business is almost impossible without a website. Create a well navigated user-friendly website for your gold business. It should provide all the necessary information about your business for prospective clients or customers.
b) Create an App
Whether you are starting a jewelry shop or buying and selling gold coins, an app can help you in several ways. Customers can buy apps, coins, or jewelry through apps. In this digital age, apps are a very important weapon for marketing as well as sales.
c) Make Personal Visits
Personal visits always help you in developing a good network and communication with your prospective clients. Explaining the merits of your gold business and the benefits it gives to the customers is one of the most effective weapons of marketing.
Giving ads through posters, banners, hoardings, flyers, pamphlets or brochures is an age-old marketing technique and it is effective for your gold business too. Ads in newspapers, magazines, and other publications are also important. Audio and audio-visual ads for radio and television are important too.
e) Explore Social Media
Use social media handles for the marketing of your gold venture. Creating a page in the name of your gold business and sharing its link in your profile makes it known to a greater number of people. Social media is a platform that brings together people of various age groups and profiles. Hence you can use it as a marketing and publicity tool.
Promotions help in getting more clients. This is especially true for the jewelry store business. If you are starting a gold jewelry store, you can sponsor fashion shows or participate in exhibitions to showcase your products.
Gold gives a magic touch to almost everything. Hence if you can start your gold business by buying and selling gold in any form, you will also get the magic touch by maximizing your profits.
Frequently Asked Questions
Can I start a gold business online?
Yes, you can start an online gold business by selling gold jewelry, coins, and bars through a secure e-commerce platform.
How can I build trust with my customers?
There are some steps you can take to build trust among customers. You can do that by offering genuine and certified gold, providing transparent pricing, excellent customer service, and maintaining a professional image.
Can I offer gold investment schemes to customers?
Yes, you can offer gold investment schemes. However, ensure they comply with the relevant regulations and provide clear terms and conditions to customers.
How can I differentiate my gold business from competitors?
You can stay ahead and differentiate your business by offering unique designs, personalized services, competitive pricing, and quality assurance through hallmarking.
What are the challenges in the gold business?
There are some challenges in running a gold business. It includes fluctuating gold prices, managing inventory, ensuring security, and building a loyal customer base.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.