Here’s how to start an online clothing store in 12 steps

This article is intended to be a very rough sketch in the process of starting an e-commerce based clothing store or store. In the high pace and competitive world of fashion retail, setting up your store is just the first step and, frankly, has little impact on how successful your store will actually be. For example, Bluefly.com has an estimated monthly traffic of 840K, but since its publication in 1998 has never achieved a year of profits. Pr. As of December 31, 2009, Bluefly has an accumulated loss of $ 147,468,000. Your guess about how they stay in business is as good as mine, but think of it this way. Even if you only make $ 1.00 in profits your first business year, you are technically doing better than Bluefly.

Note that many of these steps can be performed simultaneously. For example, while filing your legal forms, you can work on your web design. This is especially true if you rely on a third party to design and set up your site. They can work on a longer timeframe than you originally expected. I highly suggest that you focus on the business plan initially. For example, if you decide that you want to design your site with a specific concept while writing your business plan, you might just find after researching that your concept is not what you want to come up with. In this case, you probably spent 40-60 hours on non-productive output.

1. Write a business plan.

To be honest with you when me and my boyfriend launched our website, we didn’t have a business plan, but we wrote one eventually. The simple fact is that if you are planning to succeed, you need to write a business plan sooner or later. In business school you write it sooner than later. The business plan is important because it forces you to research the industry, your competitors and your resources. In addition, it forces you to think deeply about how to succeed in this highly competitive industry. If you think you want to be like Modcloth, why should you expect to be successful compared to Modcloth when working with millions of dollars of venture capitalist funds for a workforce, marketing, inventory, etc. I have no answer for you, but my point is that you need to come up with a plan before investing your life savings in this new venture. The business plan is also important because it also forces you to estimate how much money you need and where the many come from. The reality is that unless you have real background in finance, you won’t be able to build a 5-10 year projected discounted cash flow model and figure out your WACC, but having some kind of rough idea of ​​your cash flow is better than nothing.

You should also include a plan on how to initially create your site. For example, using a subscription-based shopping cart will change your budget than if you decide to use an open source shopping cart. You should also do your initial research on web hosting companies as they can range from $ 10 / month to over $ 300 / month. My only suggestion is that you get the fastest and most reliable that your budget allows. Note that all I am suggesting is that you plan what to do in terms of web design and hosting, not that you go out and pay for these services right now. The only expense you may want to consider at this point is the registration of a domain name. This is because they are relatively inexpensive to register and you may not want to miss registering your desired domain.

You need to come up with a budget and a plan for marketing, PR and search engine optimization. These are likely to be your biggest spending item into the future. Remember, buying inventory is not an expense, it is an asset.

Last, but not least, you also want to schedule order execution. This is just a fancy way of saying how to package and ship your product, as well as what return procedure and policy you want in place. Do you want to use USPS, UPS, FedEx or DHL? Do you want free shipping, return and / or exchange? This is all that one should plan for, but will change over time.

2. Apply for an employer identification number with the IRS

Again, if you plan to succeed in the future, you will have to run your business legally. You need an EIN to open a bank account, apply for a business license and get a seller’s permission. Just search “EIN” in the Google search engine and the IRS site should be the first result. When applying for your EIN, you need to know the legal structure of your company. For example, if your business becomes a male or female show, you will apply as a sole proprietor. If it turns out that you and your mom need to run the business, you can choose a partnership or decide to incorporate.

Choose your fictitious business name “Doing Business Like” and file it at your county office

One of the more exciting steps in setting up your business will always be choosing a name. My girlfriend and chose T.I.L. Dear, because before we were officially a couple, she told me that in Thailand, her homeland, that she and I could never go out alone as even friends. I said to her, “This is London, Darling.” So I guess our company name technically has to be T.I.L., Darling, to be more grammatically correct. When you have your fictitious business name, make a pretty good attempt to make sure no one else uses the same name. Otherwise, you can expect a letter from a lawyer telling you how to sue the designer pants from you when making money.

If your county registry / clerk has a site with downloadable forms, search for the DBA filing form, fill it out, and bring it to the county office. Otherwise, you just have to make everything personal. There you are likely to have your first business expense with the filing fee. Your second expense will be the requirement that you advertise your new business name in an approved newspaper or public publication, so if anyone has a problem with your DBA, then they can go ahead. The county church will be able to point you in the right direction for this step.

3. Open a business bank account

Again, as you plan for future success, you will open a separate bank account for your business. This way you can easily track business expenses from your personal expenses, write checks or have transactions under your business name and just generally feel like a real business.

4. Start designing and setting up your site

There are actually a few methods to move forward with your site. I want to explore a few options, starting from the most expensive to the least expensive. Although I have to doubt whether or not I run an online business if it is for you, but if you have extremely limited web design experience or are just not internet savvy, you might be able to do everything from a third party. If you realize that you need someone to design your site, initially set up your domain and site, you probably need to find some kind of subscription-based shopping cart. For example, if you have money to spend, search “boutique commerce” in Google’s search engine. This company will do just about anything for you, from web design, domain registration, web hosting to ongoing support. There are many third-party shopping carts to suit almost any budget. To be honest, I have no experience with any paid or subscription-based shopping cart, so I limit any opinion I have about them.

Another alternative is to purchase a website template designed on top of an open source (free) shopping cart platform. Search for “template samples” in the Google search engine. Filter your search to include e-commerce templates and select “fashion” as your category, though you can customize any template to your needs in reality.

On a side note, before buying your template, set up your server. During your business plan survey, you should have figured out which web host is best for you, but now is the time to actually spend some money because you won’t be able to test your template unless you have a server to upload it to. This also means that if you haven’t already done so, you will finally have to register your domain name, which is something you should have figured out in your business plan as well. Most web hosts actually register your domain for free, but you may want to use a service such as godaddy and you will need to change the name servers to point to your web host.

Once you have your template and web host, upload your template and start customizing it. You can either use a “template matching” service, or if you have enough HTML, PHP and Photoshop experience, you can do it yourself. Unfortunately, this step can be quite difficult, even for some internet savvy users, because this is where you will have to learn a little about creating a database, creating a database user, and how to use an FTP program to upload your site. Therefore, some may choose to use a third-party shopping cart, but this option is by far the most flexible and cheapest if you have the time and are willing to learn.

You will also need to find out how to accept payment on your site. If you want to accept credit cards as you should, you will need a payment gateway. The most popular would be PayPal Pro and Authorize.net. You must apply for an account.

There is, of course, the ultimate DYI approach where you can not only design your own website, but also code your own shopping cart. If this is the case, I highly doubt you need to read this section of my tutorial.

5. Make business cards

Yes, I actually made this an individual step because you need a business card to register for trade shows as well as to trade with suppliers. Since you also work with your website design, working on a business card design is also more effective. In addition, you need some lead time because printers charge you extra to speed up printing and shipping. So if you plan ahead, you can save a lot of money.

6. Apply for a business license in your city

Again, if your city has a site dedicated to business, you should be able to download a business license application. In some cities, you can even apply for a home-based business license. Of course, only fill out a home-based business license if that’s your case. Please bring or even mail your completed application and filing fee to the right place. The reason I took this step after designing your site is because the business license fee is an annual fee and why you pay when you are not even close to launching your site.

7. Apply for a seller’s permission

At this point, you should be quite adept at filing forms. The last application you need to submit applies to your seller’s permission, sometimes mistakenly called a resale license. Seller’s permission allows you to buy from your wholesalers without paying VAT, but it also requires you to pay VAT on all goods sold within your state every quarter. In modern commerce, of course, you are allowed to charge the VAT tax from your customers.

8. Find out how to display your products

Before you actually buy your products, I think it is wise to first find out how you want to display your products on your site. Do you need a mannequin, model or just lay it flat. Do you want to outsource your product photography or do it right in your bedroom, which is how we first started. If you want to do it yourself, you still need to make sure it fits your budget and business plan in terms of equipment purchases. If you need equipment, now is the time to either jump online or go out and start making a real investment in your business.

9. Plan your product mix and find suppliers

While figuring out how to ultimately display your products, you will begin to research where to buy your products. If you have not done so, you will start to think more about your product mix. Of course, it should fit perfectly with your business plan, concept and budget you have already created in step 1. Fashion purchases are another topic altogether, and I highly recommend that you read up on it if you can.

When you have some kind of purchase plan, it’s time to find suppliers. If you are lucky, you will be able to catch the MAGIC Marketplace Fair in Las Vegas. They have suppliers of vintage-inspired clothing, junior clothing, indie apparel, etc. It’s essentially the biggest fashion show in the United States and perhaps the world. If you can’t find suppliers at MAGIC, I would honestly be surprised. If you can’t wait for the biannual fair, you probably need to take a trip to the Los Angeles Fashion District. If you’re looking for the glamorous world of designer labels, spend your time at “The Cross.” At this junction you will find the California Market Center, Cooper Design Space, Gerry Building and The New Mart. Here you can find brands like A.B.S. By Allen Schwartz, BCBG and Betsey Johnson. If you are in this market, be sure to bring copies of your business license, business card and seller’s license. As an online business, you must also be prepared to be rejected by many showrooms. However, if you are like me, it should only inspire you to be more successful, so when you come you can reject them.

If your price point is much lower, you really want to spend time around the San Pedro Mart area. You are likely to find that 80-90% of these wholesalers do not fit your target market, but it only means that you need to find 10% -20% that is right and will be able to focus on building these relationships into the future.

Of course, you can always turn to the internet by registering on sites like fashiongo and lashowroom. In addition, you can contact individual brand sellers and they should send you line sheets and lookbooks. In fact, this is how most business will be later in the future, but I suggest you visit trade shows and March to get your feet a little wet.

10. Start product photography and add content to your site

Since you should have planned earlier for product photography, this step should be self-explanatory. You want to add the products to your site and get ready for a more official launch.

11. Start your marketing campaign, search engine optimization campaign and promotional campaign

Again, these campaigns should have already been planned in the first step. This step is basically a hundred different topics on my own, which is why I won’t delve deep into it. The most rudimentary start would be to submit your site to search engines, such as Google and Yahoo !, sign up for Google AdWords and start a Facebook and Twitter account. There is probably a good chance of relying on paid advertising to get decent traffic in the beginning, but I highly recommend that you plan and budget properly.

It may take a day or a whole month, but you get your first order and at that point you can finally say that you are really setting up your online clothing store.

12. Keep learning as much as you can

Like I said, setting up an online clothing store is the first step. In reality, you will need to learn as much as you can about fashion buying, merchandising, marketing, search engine optimization, html, php, ajax, javascript, analytics, etc.