My sister and I started our jewelry business and have not had sales yet so I'm not positive what to deduct yet.
It depends but you will be able to deduct supplies as a business expense even if you do not have any business income. (This applies to all eligible business expenses. Please refer to this IRS link for more information about Business Expenses )
As for inventory, you include inventory at your cost amount (what you paid for it, not what you will sell it for). Inventory will remain on your books until you sell the inventory. Then you will usually include the original cost of the inventory as part of your cost of goods sold (and any remaining unsold product would be remain in inventory). However, as part of the small business exemption, these items that would have been included in the business inventory may be deducted in the year that either the item is sold or when it is purchased, whichever is later.
This exemption from recognizing inventory applies to sole proprietorships or very small businesses. To be exempt from reporting inventory, an individual taxpayer must not annually earn more than $1 million, as determined by annual gross receipt amounts for the past three years.
Please click this link for more information on IRS - Cost of Goods Sold and good luck with your business venture.