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by CARINA HATTON May 17, 2022
If you are looking for answers on whether you should start an online boutique, you've chosen a great niche. Selling apparel online is a very profitable business with a $90 billion-a-year revenue. Statista predicts that apparel and accessories online retail sector in the U.S. will generate about 138 billion dollars in revenue by 2022.
At the same time, The United States' apparel market is expected to reach $283 billion in 2022.
What does this mean for you?
You have everything you need available to you to start an online boutique and now is the time to take action.
This playbook will walk you step by step through how to set up a successful online store with insights and first-hand experiences from the owner of a 7 figure store.
At the first stage of starting a new successful online boutique, it's wise to start small and focus in one area. When deciding on what products to sell online, starting small can be more beneficial than just knowing what products to keep in stock. If your online boutique is in high demand and there's a demand for more products, then you can add more product lines to your inventory at that point.
For now, take some time to think through who your customer will be. For example, you may choose to start with affordable, yet fashionable styles for the 25-45 age group.
A good solid business plan is crucial for new businesses seeking funding from investors or traditional lending firms like banking and credit unions. You should still create a business plan to use as a business tool even if you are funding your business with personal loans or your own savings. Your business plan is essentially an overview of your goals and how you will achieve these objectives.
A business plan provides a map of your company and provides an overview of how the business operates. A business plan should include detailed plans for your future business. The business plan should include the business model and projections about business finances. It should also include your business name, marketing strategy, target audience, entity type, startup costs and a detail of projected business expenses.
Every small business entity will have a business credit score once they are established. Until then, a new business owner will need to use their own credit score to obtain a business credit card.
Choose your company structure based on size and class of operation. The type of structure you choose depends on the type of operation that you wish to run. We'll talk more about that later.
Before you sell the products, you will need a sales tax permit and a federal tax ID number. This is also the time to begin to think about whether you want to register or trademark your business or logo. The US Patent and Trademark Office can help with that. Check your city and county's local policies and procedures before you apply for your permits as every town is different.
Visit your state's secretary of state office to register your business with the state.
The process varies from state to state, and there is a fee associated with this.
This is where you will decide if you will setup your business as a sole proprietor, LLC or corporation. If you are a sole proprietor, but wish to operate under a different business name from your personal name or DBA you will also have to check to see whether you need a license.
Taxes are not the simplest thing in the world to figure out, but they are super important. You will need to setup a sales tax account with the state you live in and obtain and employer identification number from the IRS. Depending on where you live, and whether or not you have employees, there may be other tax account requirements.
The Small Business Administration is a great resource for information as well.
Traditional sources of financing, such as bank loan may not be offered to you unless you have a solid business plan, and it really isn't necessary. Self-funding your boutique business is really the easiest way to go. Just be sure to keep business finances separate from personal ones.
In some cases, you will use an online marketing campaign to establish your online clothing boutique. Your brand represents your business's meaning, vision, mission and values.
You might sell the trendiest and best clothes in the world, but consumers won't remember your business if your product isn't high quality and they can't remember your name. Keep this in mind when choosing your business name.
Before you choose a name for your own online boutique, make sure it's easy to say and spell, and you've searched it on every social media platform to make sure it doesn't already exist.
Some small business owners skip this step and it can be a brutal lesson later. Online retailers especially need to make sure a domain that makes sense for your online boutique is available.
Your brand will show the way your online retail business is seen by the consumer. This should represent your unique brand and communicate your values to your new customers. The logo should easily appear on any platform at any size in recognizable colors or on any background.
Remember, you'll be using your logo in many different places, such as in email marketing, on your ecommerce website and in your social media marketing. Make sure you keep this in mind when choosing a business name.
Lots of online boutique owners design their own logo, but if it's not your strong point, there is nothing wrong with taking a class to learn how or hiring it out.
Decide exactly what brand values your online store will have. Will you be a clothing store for a certain age group? Will you offer sustainable fashion? The brand value for your new business will guide your overall message and the personality of your marketing materials.
If customer priorities align with yours they may choose you over the competition. What will your online store stand for?
Customers must trust your business in order to spend money with you. Your overall brand and marketing will determine how trustworthy your business looks to those visiting your site.
There are many vendors to choose from when trying to find styles and products you would like to sell in your online store. Have your ideal customer planned out before you spend any money on inventory.
Dropshipping uses an intermediary service to fulfill online orders from your customers. The supplier or manufacturer handles packing and shipping so you won't be able to customize the packaging and branding of the order. This can be risky because you have no control over what happens after you place the order with the dropshipper. There can be all kinds of issues - they may not ship "blind" so the customer finds out you are not the true shipper, the quality might be bad, they may ship slow or to the wrong address.
Be extremely cautious when choosing a dropshipper to work with. I don't recommend it personally.
Wholesale suppliers from the United States are easiest to work with. One of the biggest advantages of buying from a wholesaler in the U.S. is that you'll get your products in a more timely fashion.
When a customer places an order, you will do the shipping yourself, and will have full control over the product quality, packaging and shipping times.
It's important to vet all the suppliers who manufacture the products you are buying. Request samples to see an example of the quality of the product and make sure you have good contact information to reach the vendor if there are issues with an order. Work with reputable companies that have a good track record within their industry.
Before you start selling boutique items, you must set up your business and get the proper business licenses. You will need to choose a business structure, such as a limited liability company. You will also need to obtain a federal tax ID number, and setup your sales tax permit with your state to pay sales tax.
For online boutiques, the process is not too complicated. You may choose to get a business credit card. Also, check with your local government to see if you need a business license.
For an online store, your best option is operate as a sole proprietorship or limited liability company. You can operate as an individual without filing paperwork. It is common, however, for online stores to create an LLC to protect a business from liability by your debtors.
You can read more about business structure at the Small Business Administration's website.
To form an LLC or corporation you must submit forms with the state that your residence is located. A few states like Delaware have incentive for outbound businesses.
You are required to complete paperwork for each state and also pay the file fee which differs per state.
You will need to contact the IRS to obtain a federal tax identification number. You should also open a business bank account to keep your financial life separated from your personal. You will have other expenses, such as web hosting, email marketing, digital marketing and other business tools. An online business is just like any other small business - it has expenses. Your personal credit score will be used when you start your boutique store. After you have been open for awhile, your online boutique will have its own business credit score.
Your ecommerce software acts as the storefront for your online boutique. There are many ecommerce platforms that you can choose from and it is best to narrow out the options depending on what factors are most important for you.
We recommend Shopify after using it for many years in our own online businesses. It is superior to other ecommerce platforms and used by thousands of ecommerce business owners. A great ecommerce platform will give you a greater chance for success in this market.
Here's what you need to know when building your online boutique website.
You want your online boutique to be a great reflection of what you sell and really maximize your business idea. Make sure your products are organized in a way so that your target market can easily find them. Add high quality photographs and detailed descriptions about your products. The checkout process should work smoothly. You want your own boutique to be a reflection of you.
You can hire a professional copywriter — if needed — to proofread the words of your text or product description. Include your business contact address Email address and any URLs to your website for social media.
You might even consider adding new functions such as Live Chat as your business grows. Test it out before you launch your online boutique to ensure all links work and there are no broken images.
Platforms like Shopify give future online boutique owners tools that will allow them to quickly start an online boutique. With them, you can leverage advanced features such as drag and drop interfaces, mobile optimization, font and color customization and your choice of store theme. They also allow you to create your own website with just a few hours of work.
You do not have to be an experienced online designer to create a professional looking business online. If you own a brick and mortar store already, Shopify offers a POS system that will integrate with your online store. You can also have just an online boutique storefront.
Prior to setting up your online boutique, determine the method of shipping your orders. Are you offering international shipping? Are you planning on offering a flat rate or pricing based on weight? Can people choose if it is more economical to send a product next day or the same day?
Consider the shipping costs you will pay before purchasing products. Make sure there is enough profit built into the retail price to cover any shipping costs you will pay out. What are other online stores offering? What type of online shopping experience do you want your customers to have?
Starting an online boutique can be challenging, but most business owners will tell you - once you become a small business owner, it's hard to think of life any other way.
A powerful business plan (and a great mentor) will ensure you are setup for success. Use a proven business model. Lean into your target audience and use digital marketing to create profits from your online store like you never dreamed possible.
If you'd like a free checklist to help you with starting an online boutique or your own ecommerce store, click here to request one: https://m.me/growyourboutique?ref=w16394585.
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