The past has been rude to aspiring entrepreneurs wishing to open their boutiques. It seemed like only big fashion designers, who worked with the celebs, could make the world a more stylish place. Those who took some risks and started their boutiques in a smaller scale, faced numerous challenges, such as finding a decent space to set up the retail, acquiring legal licenses, and then promoting the business to drive sales. The name ’boutique’ itself seemed luxurious enough to scare a small entrepreneur.
Thanks to the internet and eCommerce, starting an online boutique is no more as challenging it used to be in the past. Although an online boutique still demands hard work and decent expertise in many things, they are not as challenging as the issues in the past. You can crack the code with a little exposure in entrepreneurship skills. This article will give you that exposure and help you to prepare your groundwork for the venture.
If you are worried about the cost of building your online boutique platform/website/application, don’t worry, as we have curated some very economical options for you. We have discussed some prominent questions like how to start an online boutique, what are the choices for website development, product outsourcing and many more. So let’s jump.
Find a Profitable Niche to Sell
To succeed in your business, you need to make good sales. However, before your business starts making money, you need to decide your specialty. In short, find a niche where you can rule.
You might become tempted to try out different things and offer a little something for all kinds of audiences, but be advised that selecting a niche is the wisest move to succeed in today’s environment. It’s easier to acquire a good name in a niche than focusing on the general class of products. If you think you can sell good designer clothes, devise a plan to sell only Women’s, Men’s, or Children’s clothes. Alternatively, you can also establish yourself in the custom jewelry and accessories segment. To be precise, don’t clutter your catalog with random stuff. Select a niche and stick to it.
Deciding your niche will not only help you to determine the ways to acquire inventory but also lead the path towards designing your marketing strategies, building your customized website, selecting a relevant theme, and promoting unique brand identity. Everything else in your business links directly to this very first step.
Create a Business Map Around it
Once you know your niche, it’s time to devise a cutting-edge business plan. Whether you are selling your products online or through a brick and mortar retail, you always need a business plan. Think of it as your roadmap for the next couple of years: your business goals, things you need to do to reach the goals, needed innovations in the business model, marketing plans, investment budget for customized eCommerce solution, supply chain, funding, required workforce, legal formalities, tax, and all possible challenges that require resolution.
In short, devising a business plan means knowing stuff and documenting it to have a continuous track so that you can always map your moves to know if you are going in the right direction.
Secure Your Supply Chain
After establishing a formal plan for your business and fixing a niche to focus, the immediate step is securing your supply chain and inventory-source. Depending on your business model, there are multiple ways to secure inventories for online stores.
You can get in terms with a reliable wholesaler. The wholesaler will supply you the products in bulk on wholesale rates, and you can sell the same to your customers on a retail rate. The margin between the wholesale and retail rates will be your profit. Of course, you will have to reduce the cost of business operations from it. You can find good wholesale suppliers online in the US and overseas.
One of the biggest benefits of purchasing your inventory from a wholesaler, supplier, or a manufacturer directly is you can have complete control over the quality of the products. You can check all the supplies before sending them to your customers. However, this also means that you are responsible for things such as, storing the inventory, managing warehouses, managing shipping from supplier to the warehouses and then to your customers, and managing packaging of your products as well. Therefore, your final profit on each sale you make would include a deduction of expenses done on managing all these errands.
Anyways, despite all these expenses, purchasing your inventory and then selling it is one of the most profitable models in terms of the thickness of the margin. Since you are in control of the entire business process, you can fix a decent margin on each sale you make. Be advised that the more you manage by yourself, the more is the chance to thicken your margin.
Take dropshipping for example. It does not require you to manage anything about inventory or shipping of your products, but the margin is very less. Moreover, you can’t have control over the quality of your products because dropshipping suppliers ship the orders directly to your customers. There are fewer hassles and overhead costs in the dropshipping model than the inventory model, but the profit margin diminishes, too.
Dropshipping is not a bad choice either. It is great for selling without an inventory. You just need to analyze your case and decide the model that works best for you. If you are a one-man-army thinking about managing the entire business with a lesser workforce, dropshipping is a lifesaver. However, if you have good funding and you can spare investments in workforce and business operation overheads, the inventory model could be a wiser way to make better money.
Read about both the models. There are tons of good articles on the internet about how to find reliable dropshipping suppliers, how to manage a dropshipping business, what are other alternatives to sell without an inventory, how you can maximize your profit margin in either of the models and a lot more. Move past this point only when you are confident about your supply-chain model, because all other steps past this point depend on it.
Register Your Business Legally
You shouldn’t start selling unless your business is legalized through a formal registration. Registering your business will help it drive trust among the customers and the investors as well.
· Business Structure:
Choose your business structure and ownership model. For an online boutique, the best options are registering it in the sole proprietorship or Limited Liability Company (LLC) model. Setting up under the sole proprietorship model is the easiest, as it does not require a lot of paperwork. However, it has some limitations. Therefore, it’s always advisable to take some extra mile and register as an LLC, if you have an aim to go big in the future. LLC model will protect you as an individual and your personal assets, in case your business is held liable for business debt.
Alternatively, if you think about going extra big in the future by acquiring some big investments, registering under the corporation license would be a good idea.
· Legal Documentation:
Depending on your registration model and the state or the nation you live in, you will have to file some paperwork and pay a filing fee. You can take the help of a corporate lawyer to help you out on this step. Make sure you also open a corporate business account in a bank. No one recommends using your personal bank account for business. The lawyer will also help you to acquire a federal tax ID. Moreover, don’t forget to clear things about sales tax and other taxes you might have to collect from customers and pay within your registered state. Get some help from a chartered accountant if required.
Choose the Right eCommerce Platform
Since you are running an online boutique, it’s imperative that you choose a well-covered eCommerce platform for your business. You will be building your online store on top of your chosen platform, so it’s not wise to land on compromises; at least not in terms of features and customizations, which make your store unique from others. You must choose a shopping cart software for your customers, while the back-end interface should focus on your requirements and ease-of-use.
If you are willing to let other sellers sell on your store and pay you commissions, go for multi-vendor marketplace software. Alternatively, if you want to keep your store exclusive for you to sell, you can go for inventory-based eCommerce platforms. In either of the cases, you will need the respective set of features and solutions to operate your store. There are multiple options available in the market:
If you don’t want to manage the technicalities of your store and just want to focus on selling your products, SaaS-based eCommerce platform is a good option for you. You can sign-up online for any SaaS eCommerce platform and set up your store right from there. You don’t have to worry about anything, such as website hosting, security patches, website speed, feature upgrades. The SaaS vendors will manage everything for you.
You just need to pay a monthly subscription fee, which may range from $30/month to $1000/month, depending on the range of requirements. Moreover, some SaaS platforms also charge an extra transaction fee on each sale you make.
Examples: Shopify, Wix, BigCommerce, Squarespace, Magento Enterprise Edition (PaaS)
· Free self-hosted:
Free self-hosted eCommerce platforms are available as open-source under a public license. You can download their source-code free of cost and host it on a supported web-server of your choice. Most of these platforms have big community support, so you will get many choices when it comes to purchasing ready-made modules and extensions for your website. Unlike SaaS, you will be responsible to manage the technicalities of your store.
Since there is no fee for using these solutions, you can invest in customizing the eCommerce platform to fit your needs. You also get the freedom to choose your B2B partners and integrate their APIs, such as shipping services, payment gateways, dropshipping services, etc.
Examples: Magento Community Edition, WooCommerce, Drupal Commerce, PrestaShop, OpenCart
· Premium self-hosted:
Premium self-hosted is very similar to free self-hosted platforms, except you don’t get the source code free of cost. Since vendors develop premium self-hosted platforms customized for individual needs, they are more suitable for niche business ideas like an online boutique. You cannot use even the free alternatives without customizations, so it’s better to get an already customized eCommerce platform for your needs.
They might seem a little expensive as they demand upfront cost, unlike SaaS, but it is a good investment if you aim for scaling up in the future. A typical ready-made script would not cost more than $1000. However, if you also need mobile apps for your store, you might have to spend around $2000-$3000 depending on your requirements.
Examples: There are no specific examples. Different software vendors sell them with different names based on the customizations. Some of them also call them clone scripts. For example, Amazon clone scripts, Etsy clone script, etc.
· Established Marketplaces:
In case you don’t want to develop an online store but want to sell online, you can register on any relevant marketplace platform and start selling on the go. You can register as a seller on sites like Amazon, Etsy, eBay, and others. A site like Amazon also provide managed services under FBA programs, where they manage your inventory for you, shipping orders, and handle your customer care.
However, we don’t recommend this choice for two reasons. First, any of the popular marketplace sites are not well known for designer stuff or boutiques. Second, selling on a third-party site means no control over your business. They control everything about your business. You would remain just a seller; not an independent online business.
Instead, you can set up your site, and hire a 3PL company (Third Party Fulfilment Company) to manage your shipping, inventory storage, and customer case. Although the margin will be low after paying out to a 3PL company, you still have absolute control over your business.
Build Your Website Around it
Once you select your eCommerce platform, build your store on it. Customize and personalize it to fit your brand identity and requirements. Secure the B2B services and integrate their APIs, such as payment gateways, Dropshipping, 3PL Company, Shipping services, etc. In short, set up your final site and go live with the online boutique.
Selling on the Go
Rest everything is marketing, promotion, conversion optimization, SEO, and customer support. Develop your business on these grounds, and gradually acquire your customer base. Run customer loyalty programs, affiliate programs, and discount campaigns to attract customers. If your budget permits, run premium Ads on prominent platforms, such as Google Search, Facebook, Instagram, Bing, YouTube, and others. If everything stays on track, with some patience and strategies, you will soon become a proud owner of a successful online boutique. Good luck with your venture.