NAICS 423940 Quarterly Industry Report
Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesaler
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 423940Sector: Wholesale Trade (42)Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 423940 draws on verified data from the U.S. Census Bureau[5], Bureau of Labor Statistics[7], and Small Business Administration[6] to profile the jewelry and precious metal wholesale sector. Our research team analyzes gemstone trade data and precious metal market patterns to provide accurate intelligence for business valuation purposes. The report covers SBA size standards, related NAICS classifications, and unique security and authentication requirements of jewelry distribution. Fair Market Value updates this NAICS 423940 profile quarterly to reflect new Census releases and precious metals market developments.
Industry Snapshot
Key metrics for the jewelry, watch, precious stone, and precious metal merchant wholesaler industry.
Industry Definition & Overview
Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers (NAICS 423940) encompasses establishments primarily engaged in the merchant wholesale distribution of jewelry, precious and semiprecious stones, precious metals and metal flatware, costume jewelry, watches, clocks, silverware, and jewelers' findings. Product lines range from loose diamonds and colored gemstones to finished fine jewelry, fashion accessories, watch movements, and the clasps, settings, and components that jewelers use in custom fabrication work.
Distribution in this industry operates through highly specialized channels built on trust, authentication, and security. Diamond wholesalers operate from secured offices in major trading centers, conducting business through established personal relationships and industry-specific grading standards from organizations like the Gemological Institute of America (GIA). Watch distribution follows brand-controlled authorized dealer networks with strict territorial agreements. Costume jewelry and fashion accessories move through more conventional wholesale distribution channels with broader retail coverage. According to the U.S. Census Bureau[5], establishments must take title to the goods they distribute to qualify under this merchant wholesale classification.
The SBA[6] sets the size standard at 100 employees for this industry. Roughly 2,350 establishments operate nationwide, employing about 47,085 workers. Inventory carrying costs run exceptionally high given the intrinsic value of precious metals and gemstones, with security and insurance representing major operating expenses. Lab-grown diamonds have disrupted the natural diamond supply chain, creating new wholesale channels while pressuring traditional diamond dealers. Precious metal prices directly affect both inventory valuations and customer purchasing behavior, adding commodity risk to standard wholesale distribution economics.
What's Included in This Industry
- Wholesale distribution of fine jewelry and gemstones
- Distribution of loose diamonds and colored precious stones
- Wholesale of watches, clocks, and watch components
- Distribution of precious metals (gold, silver, platinum)
- Wholesale of costume jewelry and fashion accessories
- Distribution of silverware and precious metal flatware
- Wholesale of jewelers' findings, settings, and components
- Distribution of semiprecious stones and beads
- Wholesale of jewelry boxes and display materials
- Distribution of estate and vintage jewelry through wholesale channels
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Wholesale Trade | 42 |
| Subsector | Merchant Wholesalers, Durable Goods | 423 |
| Industry Group | Miscellaneous Durable Goods Merchant Wholesalers | 4239 |
| NAICS Industry | Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers | 42394 |
| National Industry | Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers | 423940 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 423910 | Sporting and Recreational Goods and Supplies Merchant Wholesalers | Distributes sporting and recreational goods through wholesale channels, sometimes overlapping in sport watch and outdoor accessory categories with jewelry wholesalers |
| 423920 | Toy and Hobby Goods and Supplies Merchant Wholesalers | Handles toy and hobby goods wholesale distribution, sharing gift merchandise retail channels and seasonal holiday demand patterns with costume jewelry distributors |
| 423990 | Other Miscellaneous Durable Goods Merchant Wholesalers | Covers other miscellaneous durable goods wholesalers, sometimes handling fashion accessories and gift items that compete with costume jewelry product categories |
| 339910 | Jewelry and Silverware Manufacturing | Manufactures jewelry and silverware that these wholesalers distribute, representing the primary domestic upstream supply chain for fine jewelry distribution |
| 339920 | Sporting and Athletic Goods Manufacturing | Produces sporting goods including trophies and awards featuring precious metal plating, creating a minor product overlap with jewelry wholesale distribution |
| 423520 | Coal and Other Mineral and Ore Merchant Wholesalers | Distributes coal and mineral ores through wholesale channels, specifically excluding precious metal ores which could otherwise overlap with precious metal wholesaling |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | New York | 32.1% | 2,236 |
| 2 | California | 19.4% | 1,349 |
| 3 | Florida | 9.0% | 627 |
| 4 | Texas | 6.6% | 459 |
| 5 | New Jersey | 4.1% | 283 |
| 6 | Illinois | 2.9% | 199 |
| 7 | Georgia | 2.5% | 174 |
| 8 | Pennsylvania | 2.1% | 144 |
| 9 | Ohio | 1.5% | 105 |
| 10 | Arizona | 1.2% | 84 |
% Of Establishments
0%
32%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
712
Total SBA Loans
$429.9M
Total Loan Volume
$604K
Average Loan Size
10 yrs
Average Loan Term
10.89%
Average Interest Rate
3,992
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The SBA[6] classifies NAICS 423940 under merchant wholesale trade with a size standard of 100 employees. Businesses at or below this threshold qualify as small for federal contracting preferences and SBA loan programs. Jewelry wholesalers can access SBA 7(a) loans[8] for inventory acquisition and showroom development. Firms purchasing vault facilities or expanding secured office space may qualify for 504 loans[9]. High inventory values relative to revenue make working capital management critical for jewelry wholesalers seeking SBA-backed financing.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Northwest Bank | 16 | $80.0M | $5.0M |
| 2 | Air Academy FCU | 8 | $40.0M | $5.0M |
| 2 | FinWise Bank | 8 | $40.0M | $5.0M |
| 4 | First Savings Bank | 8 | $32.8M | $4.1M |
| 5 | Synovus Bank | 8 | $32.0M | $4.0M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses fall under NAICS 423940?
NAICS 423940 includes merchant wholesalers distributing fine jewelry, diamonds, colored gemstones, watches, clocks, precious metals, costume jewelry, silverware, and jewelers' findings. These businesses take title to goods and resell to retail jewelers, department stores, and other qualified buyers. Source: U.S. Census Bureau[5]
How is the jewelry wholesale industry structured?
The industry segments into distinct channels: diamond dealers operating from secure trading offices, fine jewelry wholesalers serving independent jewelers, watch distributors managing brand-authorized dealer networks, and costume jewelry distributors using broader retail distribution models. Major trading centers include New York's Diamond District, Los Angeles, and Miami.
What is the SBA size standard for NAICS 423940?
The SBA sets the size standard at 100 employees for jewelry, watch, precious stone, and precious metal merchant wholesalers. Businesses at or below this level qualify as small for federal contracting preferences and SBA financing. Source: SBA Size Standards[6]
What NAICS codes are related to jewelry wholesaling?
Key related codes include 339910 (jewelry manufacturing), 423520 (coal and mineral ore wholesalers, excluding precious metals from their scope), 423910 (sporting goods wholesalers), and 423990 (other durable goods wholesalers). Source: Census NAICS[5]
What industries interact most with jewelry wholesalers?
Primary customers include independent retail jewelers, department store chains, online jewelry retailers, and pawn shops. Upstream partners include diamond mines, gem cutters, precious metal refiners, and jewelry manufacturers. Gemological laboratories and security companies provide essential support services for this distribution channel.
What products are included in NAICS 423940?
Products include fine jewelry, loose diamonds, colored gemstones, watches, clocks, precious metals, silverware, costume jewelry, jewelers' findings (clasps, settings, chains), semiprecious stones, and jewelry display materials. Precious metal ores are excluded and classified separately. Source: Census Bureau[5]
Can jewelry wholesalers get SBA loans?
Yes, small businesses under NAICS 423940 can access SBA 7(a) loans for inventory acquisition, 504 loans for secured facilities, and Express loans for working capital. High inventory values and specialized security requirements make thorough financial documentation important for SBA loan applications. Source: SBA Loan Programs[10]
Where are jewelry wholesalers concentrated geographically?
Jewelry wholesalers concentrate heavily in New York City (particularly the Diamond District on 47th Street), with secondary hubs in Los Angeles, Miami, Dallas, and Chicago. Diamond trading also occurs in cities with international gem connections. Watch distribution centers locate near major retail markets for efficient dealer replenishment. Source: BLS QCEW[11]
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]SBA sba.gov
- [7]Bureau of Labor Statistics bls.gov
- [8]SBA 7(a) loans sba.gov
- [9]504 loans sba.gov
- [10]SBA Loan Programs sba.gov
- [11]BLS QCEW bls.gov
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