Online Fashion Business
What is?
The fashion industry changes it’s fashions every season. That is 4 seasons a year the means a rollover of product every 3 months. Summer clothes are on sale starting June, Winter clothes appear as new arrivals in July and August.
Fashion industry markup is 200%+ profit from the price of manufactured clothes. So the 6 middlemen from logistics to distributors and purchases, to store owners, managers and retail sales people are all part of the 200% profit line. You can also add the rental of the store in the malls which are a ridiculous price. But out of all this, the profit margins are such that there is still a lot of money to be made.
They make the money because of the “whatever the market can bear” attitude by everyone in business. So a $5 cotton T-shirt ends up being $20 but no one in the middle class or upper class will buy it because it must be inferior. So they will buy it at $40 or 50.
Fashion is not about utilitarianism. If it was there would be no industry because clothes can last 5–8 yr. But people want change esp. women. So the fashion industry end up with a 3 month turnover. It’s all about the ego and desire to look cool, or professional and “in fashion”.
5 steps to set up an online Fashion business
1. Choose your clothing niche
Instead of going for the general cloth store, you can also choose a niche(category) and sell products accordingly. Deciding the category helps in targeting the audience and finding the products easily. For example, if you choose to sell kids clothes, your target audience will be kids and the products will be all the kids' clothes.
2. Choose your products accordingly
Once you have chosen a category of product, you have to stick to it. You have to choose your products accordingly. If you go on selling products off your category, your audience will be distracted and eventually, they will move to some other stores. So be cautious of that. You have to keep updating your products and make sure that products are within the category of yours.
3. Website and mobile app development
After you have done the above two steps, its time for the website and mobile app development. You can also build website and app yourself using free tools such as wordpress, wix, squarespace etc for the website and appypie, ibuildapp, shoutem etc for the app. But, building website and app through these free tools will not help in the long run as these tools have extremely limited features. If you wanna make your online business huge, you have to hire a web and mobile app development company which will help you build a customised website and an app. It will also assist you to build a customer-friendly website and an app. You must do some research about the company and the kind of services provided by them. Check the reviews of their past customers. Also, see if there are any client testimonials available on their website. Get them to build a website and an app according to your requirements.
4. The launch of your website and mobile app
After the web and app development company have built the website or the app or both, its time for the launch. What you can do is that you can launch your platforms with a bunch of offers such as discounts, free delivery etc so that all the users out there feel like they have an opportunity to buy the products at a great price. This way, more people will get to know about your store and hence customers will be increased.
5. Digital Marketing
The next step is Digital Marketing. Either you can do it yourself or you have to go for the help of a company which provides digital marketing services. If you think that you are gonna make huge profits as soon as you start your online clothing store, you might be wrong. You have to advertise your products. You have to constantly try to rank your website on search engine result pages. Thus, digital marketing plays an important role in the success of an online clothing store.
12 Tips to Start Fashion Business
First. Learn About the Clothing Industry
How well do you know the industry? And more importantly, do you have any work experience? One of the best ways to reduce your business's risk of failure is to learn practical ways to make your business succeed. A good way to do this is to take some fashion merchandising and/or business classes, read books about starting a clothing business or work in a store similar to one you'd like to open.
You know your style, it's what inspired your business in the first place, now it's time to name it. Decide upon a brand name that reflects you and is one your customers will remember. Once you've got the name, design a business logo. Your logo should reflect everything all together - your name and your style. Logos are shorthand for your business identity. If your budget permits, hiring an outside design firm to design your logo and accompanying business materials can be a very effective investment.
Target Market
When deciding on your target market, start with the basics. Whom are you trying to dress? Are you designing women's or men's clothing? Are you specializing in adult, children, or both? Do you see yourself selling high-end fashions or is your merchandise more sporty and casual,? What are today's trends and "must-haves" for your target market? Knowing your customers is the first step to running a successful clothing store.
Write a Business Plan
Develop a business plan and use it as an outline for your company. This plan should include - but is not limited to - your overall ideas and logo; specific financial information and projections; a description of your target market; your business policies (hours of services, policy on returns, etc.); employee details; an advertising and marketing plan; and a potential exit strategy.
Determine Startup Costs
Some experts say as little as $50,000 is a good start to opening a clothing company, while others claim as much as $250,000 is the recommended dollar amount. Your business plan can help you allocate how much up-front costs you will need. Start by approximating your yearly rent, cost of goods sold and operation costs. If these numbers are still vague, talk to other business owners who have opened shops similar to yours.
Establish Operating Policies
Running a clothing company isn't a 9-to-5, five-day workweek. One way to keep an out of control lifestyle under some control is to establish operating policies for your company. Determine such facets as store hours, pricing, return policies, and layaway. Consider e-commerce or credit card acceptance, special orders, gift wrapping, and anything else that comes to mind. Operating policies will help guide you in your daily business decisions. Write these policies down and make them available, upon request, to customers.
Choosing Suppliers
Without your merchandise, your company will never be in the black. If you are new to the supplier-side of running a clothing store, get recommendations from other business owners who sell similar product, or visit Web sites.
Marketing
After you choose your target market, structure your advertising plan around it. Advertising and marketing your business is the key to getting and retaining customers. Not only do you have to get your name out so that customers will walk through your door, you want to convince them you have something unique that your competition doesn't offer. A comprehensive advertising campaign will help you accomplish this.
If your budget permits, traditional advertising, such as billboard, newspaper, television and radio, will always help get your name out to potential customers. But remember, using coupons, special sales, and in-store promotions (such as a fashion show and buffet in your store), will also spread the word. You can even use yourself as a walking billboard. Wear your own fashions whenever you're out, carry business cards, and ask others what they think about your clothing. You'll be surprised as to how many new customers will come in because of an inexpensive, grassroots campaign.
Resources
Attend business expos and fashion shows. Not only will this help you establish your business and publicize your name; you can get great advice regarding financing, networking, and other important aspects of your business. Reading fashion magazines and trade publications is another great way to keep up with the latest trends. Trade associations are another excellent source because they can give you specific information about your particular market niche.
Establish Commitment
In any business, you need to assess the commitment required to keep the business alive. Really take a moment to think of money and time to make a clothing business successful. Losing your sense of commitment can devastate your business and lead to abandonment.
Organize the Financing
As much as it sounds tedious, this is an important part. Allocate your resources and understand your finances of your clothing brand. You don’t want to exhaust your budget and end up abandoning your idea because of an easy avoidable mistake. You should be able to understand the financial statement of your clothing line to best utilize your spending.
Manufacturing
When reaching out to manufactures, always request a sample order before placing in bulk. You always want to test the quality and sizing of the clothing to best match your expectations. Imagine this: you contact a supplier for some t-shirts online, you order in bulk of 1000 pcs at $3/pc, and wait for the t-shirts to come in. Excited about the purchase, you begin to calculate your expenses for printing on the t-shirts and the profits you would make selling to your friends, colleagues, etc… Finally the shirts arrive, but when you try the shirts on, the quality is of a really cheap material and the coloring was not as pigmented as you expected. Disappointed with the purchase and unwilling to resale the t-shirts to your friends, you just threw $3000 down the drain.
Finding a reliable source can be tough. Here are some options.
LA Fashion District
Luxiscool
Bellacanvas
Bloom Wholesale
Alibaba
Pricing model
To enjoy profit, establishing wholesale and retail rates higher than the expenses are mandatory. Establish your pricing strategy early on.
Luxury Pricing – customers in this yield are mostly focused with the social impact of their apparel than the actual cost of the clothing.
Value Pricing – value pricing strategy is to ignite a distinct balance between cost and quality.
Budget Pricing – Focusing on this audience can increase significant sales volume at the cost of lower per-unit profitability.
Promotional Pricing – you can see this strategy in play during back-to-school promotions, special holiday sales events and seasonal promotional offers.
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