Crowdfunding since past few years has helped create humongous financing opportunities worldwide. In 2013, thousands of businesses globally raised ~ USD 5.1 Billion through various crowdfunding platforms. Jewelers however still rely on Debt-based financing or at most have started exploring Equity-based financing lately. But a lesser-known fact is hundreds of upcoming jewelry designers and manufacturers have successfully started crowdfunding their businesses.
Anthony Lent, a fine-jewelry maker, raised USD 56,580 in June 2014 on Kickstarter. The project was funded by 345 backers and it reached 113% of its funding goal. Last November, Melissa Joy Manning – a sustainable, handmade jewelry designer, got USD 39,266 pledged from 236 backers for her ‘2013 Exclusive NY Collection’ jewelry range and was 157% funded. Similarly, numerous jewelry businesses have raised few hundreds to few thousand dollars to fund some projects, on various crowd funding platforms.
[Image Courtesy: Kickstarter, Melissa Joy Manning]
These projects may not be big-ticket size but one has to bear in mind that the funding raised is mostly for a particular project, like piloting a new jewelry design line, financial requirement for which is limited. Besides, most of the funding goals are low and generally crosses or reaches its target.
Crowdfunding platforms like Indiegogo have also featured several jewelry funding campaigns. Ivylish – a premium handmade jewelry maker, successfully raised USD 27,189 in November 2013. Other platforms are also increasingly witnessing such jewelry funding projects. Kickstarter, in fact, has created a separate sub-category and page for ‘Jewelry’ under its Fashion category. On the other hand, not all jewelry crowdfunding projects are successful and many do not reach their funding goals, primarily on account of the concept’s failure to pique interest among the backers.
[Image Courtesy: Indiegogo, Ivylish]
Most of these projects pertain to fashion jewelry, wearables, collections containing silver and semi-precious stones at most and there are hardly any projects that contain diamonds or other precious stones and metals.
At the moment, only the upcoming and small-size jewelry businesses that ideate a new concept in jewelry, are exploring the crowdfunding route. A significant advantage that they get by crowdfunding is not only the debt-free or equity-free funding but also a group of customers in advance even before the project has actually started.
[Image Courtesy: Kickstarter, Indiegogo]
The most popular type of crowdfunding is the Reward-based one, where the business raising funds gives some rewards to its backers. This is at the discretion of the project owner but is declared at the time of the campaign launch itself. Like in any other category of crowdfunding project, jewelers also give various pieces of its collection to backers as rewards, depending on the amount pledged. Though technically it’s still a reward but can be equalized to making an advance jewelry sale. This helps the backer to gain hands on an interesting new-design jewelry piece before it hits the market and helps the business to test and refine its product before starting on a commercial scale and spread the word, apart from selling few pieces as rewards and raising funds.
Crowdfunding has already gained significant traction for the jewelry industry but what remains to be seen is whether mid-size jewelers with mainstream collections containing diamonds, wanting to grow, will crowdfund their business.
[Cover Image Courtesy: Kickstarter, Anthony Lent]