Having a Paparazzi jewelry business is fun. But it’s still a business. You get to make a great income by helping women feel and look good, but as a business you will have expenses. There are a few ways to reduce your expenses and maximize your profit in your Paparazzi Accessories business.
This tip is obviously if you haven’t become a Paparazzi Independent Consultant yet. And I know it’s going to sound like the opposite of what you may want to hear because you’re spending more money. But here’s why it’s a smart move to join with the larger Paparazzi Accessories starter kits.
We make 45% profit when we sell our $5 jewelry. We buy at wholesale for $2.75 and sell at retail for $5 which makes our profit $2.25. When you buy the $299 Paparazzi accessories starter kit and the $499 jewelry starter kit, you actually make 50% profit when you sell the pieces in those kits. Plus with the largest kit, you also receive a voucher for a free ticket to convention. That voucher alone will save you $170-$230 in convention expenses.
When ordering your inventory, you’ll maximize your profit in your Paparazzi Accessories business by ordering in 10’s. For every 20pv (10 pieces) in your cart when you checkout, Paparazzi gives you a free piece in your package. They call them hostess rewards. That free piece you get when sold will give you 100% profit. Or when you give your hostess free pieces or do giveaways, it can help reduce your expense by replacing some of those pieces.
Also if you’ve just paid $5.95 on shipping but you get one of those hostess rewards. That’s almost like getting $5 of the shipping cost back when you sell it.
This is a direct sales, retail business that sells taxable merchandise. Think of any jewelry store or clothing store in your town. When you purchase something there they add on the sales tax even though it’s not listed on the price tag. In order for you to make your full profit, you need to charge sales tax. As a retail company, if you don’t charge sales tax that’s money you are losing on every piece you sell. It may seem like nothing when you first start, but think about long term. What about when you sell 100 pieces a week? 1,000 pieces a week? That change adds up.
(Side note: Paparazzi is a unique business model. They take the work out of reporting sales tax for us by charging it on the front end and report it to our sales tax authority for us. You can always choose to report and pay your quarterly sales taxes to your local authority yourself. Just submit your resale certificate to Paparazzi and they won’t charge you the sales taxes up front and won’t report it for you. Also this is referring to sales tax not income taxes.)
You need to charge your customers for shipping their packages to them. Almost all companies charge shipping so your customers will expect it from your business too. How much you charge for shipping is up to you. Some consultants charge a shipping rate based on the number of pieces a person buys. Others charge a flat rate. Whatever you decide, you want to cover all or most of the cost of shipping plus the cost of the packaging you ship it in. Make sure that you are using one of the ship-from-home programs so that you can minimize the shipping cost on each package. Chances are you won’t charge a high enough shipping fee to cover the expense 100%, but remember it’s a business expense and should be a tax write off.
If you’re building a big business, I don’t have to tell you to be active each month. It’s not a requirement to keep your consultant status, but there are perks. One of those benefits is that you’re eligible for team commissions and bonuses. When you have sponsored someone and have a team you need to be active to receive the compensation that Paparazzi gives based on your team’s performance. You don’t want to miss out on this extra money by not being active one month. We’ll talk more about maximizing the compensation plan another time. In the meantime you can read more about Understanding the Paparazzi Accessories compensation plan here.