A Guide to Starting an Online Clothing Business

Kelly Hernandez
A tailor fitting a woman for a dress in his shop with a laptop on his desk.
Reading Time: 5 minutes

If you have a passion for entrepreneurship and an eye for fashion, you may have considered starting your own online clothing business. An online clothing business can allow you to express your creativity, get a leg up in the competitive fashion industry, and potentially earn a profit.

While a career as an online clothing business owner may seem exciting and glamorous, starting an online business is no easy feat. The fashion industry is competitive and without a creative idea and a solid business plan, you could lose credibility in the industry.

If you’re not sure where to start, actionable steps towards creating a successful small business will keep you from floundering. Review this important guide so you can learn how to get started and the best ways to tackle obstacles you may face when opening your own company.

Requirements to Start an Online Clothing Store

You may assume that since you’re not opening a brick-and-mortar retail store, your startup costs will be substantially lower. While you won’t need to build out retail space and pay rent each month, there are still hefty costs associated with launching your own online clothing store. You’ll need to consider what you’ll spend to obtain a domain name that suits your business, as well as additional costs associated with designing and maintaining a website.

Without a retail store, the only way to serve your customers is to ship your goods. Analyze what it costs to ship your products and whether you’ll absorb these costs. Marketing is also an important aspect of a successful business. Consider both the online and offline marketing opportunities you’ll want to take advantage of and how they’ll fit into your startup budget.

How to Create an Online Clothing Retail Business Plan

If you’re excited about your new online clothing store, it’s tempting to order some products and launch your site right away. However, even an e-commerce store needs a business plan that outlines costs, goals, and strategies, before beginning.

When you create a small business plan, it should include the following elements:

  • Company overview: Begin with an overview of your company vision, such as the products you’ll carry and your target market. Consider your goals for expansion, such as franchising or additional product offerings.
  • Market analysis: Before creating your website, you must know the types of customers you want to reach. Conduct extensive market research in your industry. Interview potential customers, analyze your competitors, and identify what sets your brand apart.
  • Financial plan and projections: A solid financial plan before you launch will help you better understand the investment you’ll need. Your plan should include expenses for product and website design. You should also be able to set price points for your products, calculate your potential profit, and predict your growth throughout the coming years.

When establishing a financial plan, consider the benefits of accounting software. When you opt for computerized accounting, you can see your cash flow in real-time. Many small businesses use Quickbooks because the software is easily accessible.

How to Source Clothes

Before you can accurately identify your price points and financial plan, figure out how to source your clothes. The way you source your clothes determines the online clothing store business model you’ll follow. You have several ways to source your clothes, including the following:

  • Online wholesalers: With an online wholesaler, you buy completed pieces, which are shipped to you for distribution or drop shipped directly from the warehouse. This option usually requires the smallest investment but you won’t have as much control over the quality and design of the goods.
  • Trade catalogs: You could order your product from trade catalogs and add unique finishing touches yourself. This allows you to express your creativity but you’re responsible for purchasing the stock outright. There may be minimum quantities you must order at one time, which can get pricey.
  • Sourcing agents: When you source your clothing from sourcing agents, you have most of the control over the design and quality of the items. Since this is a more hands-on approach, you’ll need to dedicate substantial time interacting with the sourcing agent to ensure your product meets your expectations. Since you’re designing from scratch, this is also often the most expensive sourcing option.

Registering Your New Online Clothing Store

When you register your business, you’ll need to decide whether a sole proprietorship, limited liability company (LLC), or another type of business works best for your situation. With a sole proprietorship, you don’t need to pay filing fees to the state but you must claim your gains and losses on your personal tax return.

An LLC requires state filings but offers you better personal financial protection since you’ll file separately. Before deciding how to register your business, consult with a legal professional to weigh your options.

It’s important to choose a name for your business that isn’t already taken. As you’re brainstorming, run your ideas through a search engine or your county clerk website to ensure a business with that name doesn’t already exist.

As an online retailer, your domain name is also an important factor in your brand. Before deciding on a name, ensure the corresponding domain name is still available by visiting the site yourself.

Tips to Establishing Your Own Retail Clothing Brand

A strong, identifiable, and relatable brand name is crucial to achieving success in the fashion industry and increasing your customer base. Your brand should have a definitive personality that makes it unique. Your marketing messaging, logo, and the colors you use on your website should all deliver a cohesive theme that shows who your brand is and why you’re unique.

When your marketing delivers a congruent message and aesthetic, it’s easier for consumers to recognize your brand. When you take the time to develop a distinctive and attractive brand, you’re more likely to pique customer curiosity, leading to more sales and referrals.

How to Design Your Own Clothes Online

You know you want to sell your clothes online, but you can also design your products online as well. Small business owners take advantage of mobile technology with accounting, planning, and product development; the clothing industry is no exception. Some of the most popular platforms for designing clothes online include the following:

  • Blender: With 3D capabilities, Blender makes it easy to see how a garment will fit and move. This free program runs on Windows, Mac, or Linux and offers animation and video editing features.
  • Pattern design software: This software offers realistic views of patterns and textures in a 3D model so you can know what you’re getting before you order a sample. It’s compatible with both Mac and Windows and allows you to share your digital workspace with collaborators.
  • SnapFashun: With SnapFashun, you gain access to hundreds of garment templates so you don’t need to design from scratch. It’s compatible with Windows and OS X operating systems and the drag-and-drop function makes it easy to add and delete layers from your project.
  • Clo: With a variety of images already available in the system, you can use Clo to make your design come to life without rendering from thin air. The software is compatible with many external applications and provides avatars so you can see how your fabric looks and moves.

Retail Clothing Marketing Tips

Whether you’re opening an online jewelry business, clothing business, or home goods store, the way you market your brand is the key to your success. Your marketing strategy should focus on a target audience that you’ve identified through market research.

Clear calls to action within your marketing drive your audience to take advantage of discounts, offers, or unique products. By connecting with your customers, offering exceptional customer service, and providing high-quality products, you’ll create brand fans. These fans are likely to rave about your products to their online following, friends, and family, growing your customer base.

Keeping track of your company’s marketing analytics is also crucial for continued growth. If your current marketing campaign isn’t delivering results, take action and make changes. Consider the clothing items you’re marketing, the audience you’re reaching, and the mediums you’re using when attempting to shake up your marketing plan.

When you can identify your brand, create a solid business plan, and implement calculated marketing efforts, your online clothing business is likely to succeed. Before you start buying products or launching an online store, follow these steps so you can stay on track toward success.

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