How to create a business plan for your online clothing store
Creating a detailed business plan is critical to the success of your online clothing store. Your business plan guides most operations, from clothing styles to marketing to website design.
So, how can you position your small business to survive?
Your journey starts with an online clothing store business plan that considers your audience and competition.
Read on to learn how to create a business plan to win and keep customers.
Here’s what we’ll cover:
Online clothing store business plan 101
Benefits of an online clothing store business plan, parts of an online store business plan, tips for writing a successful online clothing store business plan, final thoughts: how to create a business plan for your online clothing store.
An online clothing store business plan is a document that contains information about aspects of your clothing business, such as products, marketing, ideal customers, and growth forecasts.
It provides an overview of how your small business will serve customers and make profits. You can also update then plan when the key elements change over time.
It’s always best to create your business plan before you start operations. But if you’ve started selling clothes without one, you can still create one now.
Whether you start from scratch or use an online business plan template as a starting point, going through this process will help you understand your ecommerce business deeply.
Creating a business plan may sound stressful. But it’s a vital part of working towards starting your online clothing store.
An online clothing store business plan helps you:
Determine the viability of your business
A core reason to create a business plan is to identify the chances of gaining market share and making profits before you invest more time and money into the idea.
A clothing line business plan contains information about your niche market, potential customers, opportunities, and threats that you might otherwise miss in the excitement of opening your own business.
In other words, it helps you avoid diving head-first into the unknown and the losses that come with it. It also helps set the context in which your business is more likely to thrive. No two stores are the same.
For example, a business plan for a boutique storefront would require a different approach to that of an ecommerce business plan. Moreover, its focus would be vastly different from those of say, a second-hand clothing store business.
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Improve clarity and focus of operations
Every successful clothing store startup has a strategy that guides its operations. The operations outlined in the plan will keep you focused and on track.
Without a business plan for your clothing store, you might have difficulty sticking with one strategy and achieving growth. After all, your business plan is the roadmap for your company.
Secure the right employees
Using your business plan as a roadmap allows you to see the skills needed in your operations easily. So when you are ready to hire employees, it’s easy to define precise requirements and hire only for positions you truly need to fill.
There are many ways to write a business plan. But every effective business plan should contain vital information about business operations, products, customers, marketing strategy, and growth potential.
In the end, it should be helpful for your business and investors. You can start with an online business plan template or start from scratch.
Whichever option you choose, use these nine key parts of an online clothing store business plan:
1. Executive summary
The executive summary of your clothing business contains details such as objectives, mission, products, and keys to success. Think of your executive summary as a brand’s elevator pitch where you have to hook a reader in a few minutes.
While the executive summary appears at the beginning of your business plan, it is written last. By waiting until everything else is written, you have a complete view of your plan and know the most important information to add.
2. Business description and mission
Your business description will tell people about your brand name, products, and target customers.
Your mission statement also works as an extension of your description. With it, you can state your overall company goals and anything that sets you apart from other companies.
Give shoppers a reason to buy clothes from your ecommerce store rather than competitors.
For example, Nordstrom describes its business and mission on its “About Us” page.
3. Market analysis
To sell clothes, you must study the people who want to buy them. How large is your potential customer base? What types of clothes do they like?
Your market analysis will detail the market size for your clothing niche, buying trends, and target market demographics.
While doing this, perform a SWOT analysis to uncover your new business's strengths, weaknesses, opportunities, and threats.
Then, you need to perform a competitive analysis. That includes analyzing competitors’ strengths and weaknesses. What makes your store better? How can you attract their customers? These answers are the basis you’ll use to inform your marketing strategy.
4. Business structure
You need a business structure to operate as a business. There are many options for a legal structure for your business. Some options include a sole proprietorship, an LLC, a partnership, or a corporation.
You can check out the U.S. Small Business Administration’s (SBA) page on selecting the right business structure .
5. Products and services
In this section, you’ll list products and how they appeal to your target customers. If you have many products, you can just provide an overview of categories.
Do you have new products in mind for the future? Include them here. Also, remember to list intellectual property that can boost profits, such as proprietary T-shirt designs.
As an online clothing store, you’ll also need to consider product availability and review current fashion industry trends.
6. Clothing marketing strategy
Your marketing and sales strategy will outline steps to reach potential customers and attract them to your products.
In particular, you should lay out an example ecommerce marketing plan for your clothing business website. Remember, your website will replace a physical store. As an ecommerce business, your marketing plan will likely focus on channels such as email, social media, search engines (SEO), and your website.
You should also aim to optimize your website design and user experience to offer an easy buying journey to your target audience . After all, if your online clothing boutique is hard to use or slow, many shoppers will leave without buying.
In this section, you can also include your planned key performance indicators (KPIs) for your marketing campaigns.
7. Operations plan
In your operations plan, you want to provide information about how the business will actually operate, from sourcing materials to getting the products to customers. So you should add details such as suppliers, lead times for ordering stock, equipment, inventory management, and shipping.
Will you drop ship clothes, buy inventory from wholesalers, or manufacture from raw materials? What payment options will you accept? Will you sell directly through social media?
For delivery, will you handle shipping in-house or through a third-party partner? According to the 2022 Salsify Report , 24% and 22% of U.S. shoppers choose where to make purchases based on delivery options and speed, respectively.
Be sure this section covers each step of your operating needs.
8. Clothing store startup costs and funding
No matter the size of your clothing business, you need money to start the business. The amount you need will differ across business models such as dropshipping , cut-and-sewn salons, printing graphic t-shirts, buying from wholesalers, manufacturing custom clothing, or second-hand sales.
In this section of your business plan, you need to show your startup costs. These may include inventory, production, website hosting and design, and equipment and software.
Also, keep in mind to indicate which of these costs will be one-time or recurring costs.
In this section, you can also add your projected profit and loss statements and cash flow.
The funding part of this section of your business plan will outline how you want to get money to run your business. Common funding options for your online retail business are friends, family members, crowdfunding, and bank loans. This section should explain most of your financial plan.
9. Ecommerce growth forecast
An ecommerce growth forecast lets you look forward to the future of your new company.
Your growth forecast will answer questions like:
- What are your financial projections over a few years?
- What are the market projections for clothing ecommerce?
- What products are you planning to add to your store, and when?
Your growth forecast should show where you see your business in a few years.
There’s no single right way to write a business plan. But you’ll increase your chances of writing a successful online store business plan if you follow these tips:
- Write your business plan in simple language that most people can understand.
- Keep your business plan as short as possible while still covering all necessary points.
- Create buyer personas for product categories to better understand your ideal customers.
- Present a realistic growth forecast for investors.
When you follow these tips, you’ll have a business plan that people can read easily. While reading, they’ll also get a sense of what you’re trying to achieve with your clothing business.
Starting and running an online retail business is a lot of work.
A detailed online clothing store business plan will help ensure your business direction and goals are clear.
As an online store, your website is one of the most important elements in your business plan. After all, your online clothing startup literally lives on the internet.
Your business plan will fall apart without reliable website hosting and an easy-to-use design.
Our WooCommerce hosting packages help you turn your online clothing store concepts into reality. Paired with vital features like autoscaling for traffic surges, we’re ready to host your business as it grows in the coming years.
Try our WooCommerce hosting today and experience the difference.
Maddy Osman is a WordPress expert, WordCamp US speaker, bestselling author, and the Founder and SEO Content Strategist at The Blogsmith. She has a B.A. in Marketing from the University of Iowa and is a WordCamp Denver organizer while also operating The Blogsmith, an SEO content agency for B2B tech companies that works with clients like HubSpot, Automattic, and Sprout Social. Learn more about The Blogsmith's process and get in touch to talk content strategy: www.TheBlogsmith.com
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Do you have the right skills?
Are you suited to having a clothing line, what is your brand, what is your goal, how will you sell, how to market it right, keep your startup costs low, how to start a successful online clothing business.
11 min. read
Updated November 1, 2023
You’re stylish, passionate, and talented—and you’ve decided you don’t want to work for the man for the rest of your life. You’re going to become an entrepreneur and start your very own clothing line!
This journey is undoubtedly going to be challenging and exciting, so you need to get yourself prepared properly. Here’s the “checklist” for starting your own clothing line, starting right at the very beginning.
What is your background? Having creative ideas for stunning clothing is a great start. But in most instances, it will be somewhere between ideal and mandatory to have some training or education in design, textiles, and garment creation—sewing or altering.
Although you can have clothes manufactured in a factory on a mass scale, you’ll need to be able to sew and draw initially so you can produce concepts for the factories to adhere to. Plus, it’s always a good idea to test your ideas with an MVP (minimum viable product), meaning that you test your designs by creating a small run before you invest in large-scale production. If no one buys a run of thirty skirts, for example, you’ve lost significantly less than if you finance a run of 20,000 without verifying that people will buy or that retailers will be interested.
Taking classes in marketing, design, textiles, or business is always a benefit in the clothing industry. But studying on your own time is also a good option to consider if you’re not interested in or don’t need formal education. University training will almost always help you expand your knowledge base and give you access to feedback from professionals and peers, but ultimately, developing creative designs is personal—it’s about your own style and ability.
Do you have the artistic expertise, a strong design ethic, and a real passion for creating a brand?
Yes? Great, you’re probably pretty suited to running your own clothing line. The term “clothing line” refers to designing and producing your own clothing, controlling and directing the process from start to finish. There’s really only one thing that you will 100 percent need if you want to be successful in the industry.
It really doesn’t matter which way you decide to go with your line, this is an industry were passionless people stand out. While everyone says that no matter what your company, you need passion regardless, that simply isn’t the case these days. To be frank, there are actually a number of sectors that allow you start a perfectly successful business without ever having any real passion for the sector or business model itself.
When it comes to clothing, however, you really do need to have a genuine passion for what you are producing. Without it, you simply won’t stand out and enjoy any real success.
It also goes without saying that you need to be an imaginative person. Having a creative eye is essential.
There is simply no point trying to copy what others are doing in the fashion industry— it simply will not cut it. Your brand’s rep is everything—never forget this.
So, if you’re creative, passionate and original—then you are suited to having a clothing line.
How’s it that we’re sure on that, where do you start?
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In any business, branding is important. But for a clothing line, it’s absolutely imperative. Without a strong brand identity, affable story, and admirable ethos, your business will be overlooked for your competition.
Most brands have a great origin story, even the bottom line is that they were started simply to earn more money. Rather than just aimlessly choosing a style without reason, think about what you want to add to what’s already available in the marketplace: luxury, quality, cheap alternatives, additional sizes, or even a completely new style, it’s worth thinking through to create a foundation for your brand which will also serve as a guide in future.
When working out what you want your brand to be, draw on your own experiences and personality as a base. Your entire brand should, ideally, be a reflection of yourself. Consumers are cleverer than you think, and will immediately see through any generic, insincere branding attempts.
Your goal can be as big or small as you want, but while having a big goal is good for the distant future, you should also create some shorter-term, realistic goal for your business plan. Think about how much profit you want to make, or the level of public awareness of your brand you want to generate. The end goal doesn’t have to be for the label to become a global giant. Your line can exist as a side passion project to help you earn extra cash. The key is to figure out what you want.
A lot of new brands attracted the larger companies to buy the name from the owner and encourage a quick turn around in revenue rather than playing the long game, it varies on your passion and investment in your brand.
Next up, you need to work out how you plan to sell your clothing. These days, ecommerce is the best place to start. It keeps startup costs right down, and core retailers and distributors are more likely to talk to you with at least some sales and brand recognition under your belt.
Building a functioning ecommerce website can be ridiculously easy these days—and cheap. You can build a basic Shopify site for as little as $29 per month, and it’s you’re good at the design side of things, you can make it look pretty epic with very little effort. Remember that your website will need to reflect your brand, which means conforming strictly to your brand guidelines strictly. Nothing puts consumers off faster than a poorly-designed website.
Another platform to consider is an independent listing on a fashion marketplace like ASOS marketplace or Amazon, alongside your own ecommerce offering. This can really help to boost much-needed exposure in the early days, and setting up a “boutique” style hub on ASOS in particular—which costs just £20 a month in addition to a 20 percent commission on sales—has added benefits. People trust platforms like this, and so these sales ultimately build your brand organically.
Selling directly to consumers isn’t the only option either. Depending on your goals and personal investment in the company you could consider selling to retailers as a wholesaler. The demand will be much higher and profits per individual garment lower. But it also makes the sales side easier, not needing to deliver to consumers or market to individual consumers.
I cannot stress how important market research is to any company. When you have settled on the brand, the next step should be market research.
Use (your best friend) Google to research the clothing brands out that are creating similar work or targeting a similar customer demographic. Pay attention to details about competitors, like their size, branding, geographic reach, price, and unique selling points. Use what you learn to work out how you can offer consumers something new, different, and ultimately better .
Marketing starts with testing the product on your target market , it’s a poor move to manufacture 300 garments without having first sought feedback on your prototype from customers in your target market. Creating a minimum viable product will help identify any improvements your garments need. Whether it’s the fit, size, or color, you’ll be able to make changes without investing a lot into an imperfect product.
Asking family and friends to try out your line might work if they are part of your target demographic, but making sure you’re getting unbiased feedback is key. So try to find some people you don’t know to give you feedback. Doing all of this reduces your risk—if your product isn’t viable, you will be out a minimal investment of time and money, but if it’s received well, you might yield repeat purchases from happy customers.
Identifying the right target market is also important—it can make or break your clothing line. Research on how much people are willing to pay for your product, and how much they pay for similar products, will help define your quality standards and pricing.
It’s important to do the basics right. When you’re designing your online presence don’t be afraid to invest in it. If a potential customer likes your clothing but doesn’t trust (or can’t navigate) your websites they probably won’t order. Invest in quality product photography—your images need to look professional and be properly lit. Hiring a photographer for a day or two is worth the investment.
Secondly, it goes without saying that you will need a full and thorough marketing strategy that makes you stand out. The clothing market is unbelievably congested and extremely competitive. In general terms, it is always a good idea to build a strong social media presence through Facebook and Instagram. Via these channels, you can interact with brand advocates directly and develop a clear “voice” for your clothing line.
Putting initial budgets into paid advertising on these platforms is probably most worthwhile for ecommerce sites. You target audience, nine times out of ten, will spend their lives on these channels. Facebook’s model for ad targeting is so specific and niche these days that you can really reach the best audience for your brand.
Also, before you set up profiles on every single social media platform, make sure your target market actually uses them. Instagram, for example, isn’t as widely adopted by people over age 40, so if your range of garments targets that age group, it might be best to stick to Facebook rather than attempting Instagram too.
One way to increase sales and brand awareness is through celebrity endorsement . Most “instafamous” or “Z listers” social profiles will list an email address for PR inquiries. Getting celebrities to wear your brand increases follows massively and has the potential increasing your followers. But, be realistic. Don’t depend on celebrity endorsements as your primary marketing strategy, but it doesn’t hurt to try.
One of the main advantages of starting a clothing line business is that it is relatively easy to keep costs low initially.
As you get started, put together a business plan . It will help you decide on and maintain your key areas of focus and should help you put together your initial budgets and financial forecasts, based on your startup costs . It’s a good idea to write down ways you can minimize your initial costs—look at your list of startup costs and define them as either essential from the very beginning, or something that can wait until you’ve started generating some revenue.
Your largest overhead at the very beginning will probably be the clothes themselves, and as you will likely be producing the clothes yourself, you’ll only need the most basic of equipment. Only invest in more professional equipment once demand has increased and you have more capital.
Until you’re dealing with a high level of stock, it’s a good idea to avoid renting space and just manufacture from home. This allows you to be more flexible with working times and keep your day job until you really take off.
One expenditure you should consider is insurance , including basic business insurance, freelance insurance, or professional indemnity insurance. When you’re small and the risk is low, you’ll be able to find policies that cost next to nothing—but should the worst ever happen, it could save you.
If another company claimed that your design, logo or branding was copying theirs, having professional indemnity (liability) insurance would give you the financial backing to battle the claim. It also offers some protection from dissatisfied clients.
From the outset, you should also consider setting up some key financial performances indicators to help you thrive—it’s critical to be able to keep track of how your business is actually performing , versus your financial projections. Think about number of sales, the total profit made per order, and the revenue you hope to generate within a set time frame.
When you start your clothing line, you’ll need to find the balance between your quality standards, costs of production, and making money.
Almost no one is born with the full stack set of skills to start and run a successful business, so take the time to learn about the parts you don’t know as much much about, whether that’s how to network in the fashion industry, or how to develop a business plan that’s designed for growth.
Be passionate, know your brand, and keep your set up costs low! Good luck!
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Richard Meadow is a writer that works on topics related to freelancing, ecommerce, and small business advice. He uses Caunce O'Hara as a reference in his work. He is always interested in new subjects and articles to read and enjoys writing about them. He has previously worked closely with ecommerce companies and has found a lot of insight with his experience.
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Start a Successful Online Clothing Business in 7 Steps 
So you have decided to start your own online clothing store. It’s no surprise why: with online apparel stores being a multi-billion-a-year industry, it’s by far one of the most popular eCommerce niches. With reaching $759 billion in 2021 and predictions it will reach over $1 trillion by 2025, there is a lot of potential online business within the fashion industry to cash in on.
However, starting a successful online clothing store is more than just buying a domain and placing a winning eCommerce ad .
Pro Tip: Don’t forget to check out our Top Apparel Online Stores post, for inside tips on how to build a successful brand once you’ve set up your clothing brand.
A successful store is dependent on the niche you choose, the branding you create, the quality of not only your clothing products but your site, the customer service you provide, and fulfillment strategies.
Just because a niche is popular doesn’t mean you have instant access to potential customers. In fact, the opposite is true. With increasing popularity comes increasing pressure to differentiate your store from the millions of others already online.
In this guide, we will take you through how to start a clothing business online the right way, highlighting the keep steps you need to take to start a successful online clothing business. Including:
- Choose Your Online Clothing Niche
- Choose Your Online Clothing Store Products
- Choose Your Online Clothing Store Business Mode
- Outline Your Online Clothing Store Business Plan
- Creating Your Online Clothing Store
- Launching Your Online Clothing Store
- Bringing Traffic to Your Online Clothing Store
Let’s get started!
New to eCommerce Marketing?
Get expert google ads hacks for free (used by our +400k customers) straight to your inbox, step 1: choose your online clothing niche.
Before you can choose your products, you need to decide which apparel or clothing niche you want to sell in. Choosing your niche ensures you choose products and create your whole clothing line business plan around the type of potential shoppers you want to appeal to and ultimately ensures you are able to position your store in a unique way.
The trick is to be very specific and really drill down your niche, as this will enable you to identify and market to your potential shoppers more easily. This will also help you develop your product list to appeal to your specific target market, allowing you to limit your competition and increase your chances of customer loyalty long-term.
An awesome example of this is the online apparel store HUMAN . Their niche? Pop culture. How do they cater to it? By using bold humor: a unique expression that appeals to what they call ‘pop culture nerds.’ And what appeals to potential shoppers in this niche? Not fancy chiffon skirts or name-brand shoes, but tees, hoodies, and socks.
Their site has so much awesome going on, but it’s their slogan that sums up their niche perfectly: “Dress Yourself To Express Yourself.”
So how do you choose your niche? Here are the four most important considerations when choosing your niche:
- Be as unique as possible to stand out from the crowd
- Choose a niche that interests you and you’re passionate about
- Ask yourself whether you can add value and/or position yourself as an authority
- Make sure the fashion niche has earning potential
You can get more detail on the above from our How to Find a Profitable Niche for Your Online Store post.
2023 Trending Clothing Niches
- Vintage clothing stores
- Athleisure clothing lines
- Genderless fashion
- Sustainable fashion
- Recommerce (second-hand clothing lines)
Step 2: Choose Your Online Clothing Store Products
Once you have a clothing niche, it’s time to choose your products. Will you be selling short-sleeve shirts or dresses? The clothing and apparel market is almost infinite, and you can be sure there are a bunch of options within the niche you’re selling in.
However, if you’re tempted to jump in and sell everything, this could be your undoing before you’ve even started. When you’re starting an online store, it’s always advised to start off small and slow and then branch out your lines as you grow.
Bonus Content: Trending & Best-Selling Products to Sell Online 2023 [Including Apparel]
A great example of this is one of our top merchants, Mrs Bow Tie. Mrs. Bow Tie made a name for themselves selling bow ties that are uniquely ‘Made in Britain’. Their success with just one product line was so big that within three years they have added neckties, pocket squares, cummerbunds, suspenders and cufflinks to their product lists and sold to over 300,000 customers.
Say you have decided to open an online clothing store aimed at the yoga fitness niche. Instead of putting a variety of products on your proposed list, isolate the must-have products you can launch with. Each kind of product – whether it’s a hoodie or a pair of socks – has a wide potential of building your new clothing brand.
What should you consider when choosing your products? Here are our top three tips!
1. Start Small
As Mrs Bow Tie did, start small and simple as you get your product list off the ground. Adding too many products upfront will not only add extra admin costs every step of the way – from product photo shoots to web setup – but it can add complications when you first launch. Complications can affect the service you give, and as a new store in a very competitive market, great customer service and the appropriate helpdesk software to deliver it, or the lack thereof, can make or break your clothing line business.
2. Think Ahead
As we know, fashion and clothing fads are ever-changing. Choose stable products at first that can be easily changed to suit the changing styles, such as bow ties or t-shirts as shown above. If you do decide to go more mainstream fashion, plan for the changing styles by creating a store that adapts, such as dropshipping orders, which will ensure you’re not stuck with unsellable stock. Ultimately, in the clothing game, there will always be shifts, so success will depend on your ability to think ahead and be innovative and creative in dealing with the changes.
3. Set Your Focus
Yes, be as specific and narrow as you can at the beginning, but have an eye on the end goal. Think about where you see your online clothing brand extending in the future, and make sure that you’re focusing on the end goal. This will ensure that, as you add products to your range or line and grow your store in your niche, you will be able to implement new or trending products onto your store more seamlessly.
Bonus Tip: The Secrets to How One 6-Figure eCommerce Business Dominates Their Niche
Step 3: Choose Your Online Clothing Store Business Model
Now that you know your niche and have an idea of the types of products you want to sell, it’s time to pick an online clothing business model for your online clothing store business. This is where you decide if you using a clothing manufacturer, white labeling, or opting for dropshipping to build your clothing company.
There are four types of business models that online clothing and apparel stores fall into:
- Custom cut-and-sew
- Private label
Each online business model has its own pros and cons and choosing between them should be based on your overall fashion store objective and budget and your skills or potential for hiring a team.
Let’s look at each of them more closely.
1. Print-on-Demand Clothing Store Business Model
Print-on-demand is the easiest type of online clothing business model as well as the cheapest. In fact, custom t-shirt printing alone is expected to reach $10 billion in sales by 2025.
These are the types of stores where you print your logo and design onto blank apparel, and everything is automated.
There is enough variety in types and colors within this business type and it’s your most cost-effective option when dealing with small numbers of orders.
A good example of a company that offices this is Printful , which has grown into a mega print-on-demand brand, launching a variety of new products and services this year including activewear and warehousing and fulfillment .
The biggest drawback of this model is that these types of stores generally have lower profit margins and offer few options in the way of branding tags, labels and other finishes.
Bonus Content: How to Find Private-Label Manufacturers for Your Products
2. Custom Cut-and-Sew Clothing Boutique Business Model
Best for those of you who want to launch your very own clothing brand and design to create an online boutique. AKA for those wanting to design and make their own clothes and accessories.
This type of online clothing boutique business model is best for those of you who want to build a complete clothing line from scratch. Here, you do everything in-house from designing your clothes to manufacturing and fulfilling – yourself.
The biggest advantage here is that you are selling something very unique and can customize as you see fit. However, custom cut-and-sew businesses come with a lot of management, as you will be responsible for finding and coordinating your own pattern-makers and manufacturers, sourcing your own fabric, etc. This means a lot of upfront budget and time needed to launch your first line.
Pro Tip: Looking for pattern-makers? Here are three vetted suppliers to get you started:
- Clothier Design Source
- JLD Studios
- The Pattern Makers
3. Private Label Clothing Store Business Model
Private label business models are essentially the middle point between print-on-demand and cut-and-sew. They provide more clothing line customization than the former but less ‘work’ and needed budget than the latter. Essentially you will be buying wholesale clothing and accessory products, that you would then sell and market under your fashion brand.
How does wholesale clothing private labeling work?
You buy blank or label-less clothing items wholesale, and then add your custom design, label or tag before selling them in your store. This can prove to be a lot more cost-effective than print-on-demand, as you can negotiate better rates for bulk buying.
Unfortunately, there are some drawbacks, such as having to deal with fulfillment and inventory management yourself. However, there are platforms that will help you streamline the process, such as Threadbird, where you can buy and custom-finish your apparel and clothing. They also offer fulfillment services for those of you who prefer to hold your own stock.
4. Dropshipping Clothing Fashion Brand Online Business Model
Similar to print-on-demand, dropshipping clothing stores allow you to sell clothing that is fulfilled from wholesalers. This is a cost-effective route, as you don’t have to deal with buying stock up front, storing, packing or shipping. The disadvantage is that your products won’t be as unique and there could be a variety of stores selling the same products as you.
However, it can be pretty easy to set up. With apps such as Oberlo , you can find and coordinate a lot of suppliers and integrate them into your online store.
Step 4: Outline Your Online Clothing Store Business Plan
You have your niche, products, and business model; it’s time to outline your business plan. You should be outlining your:
- Market (drilling down your potential shoppers into segmented markets or fashion audiences)
- Products (deciding what makes them unique)
- Biggest competitors (listing your top competitors)
- Online business model/fulfillment strategies
- Brand identity/clothing company description (how you want your target market to view your fashion store brand)
Pro Tip: To quickly grow in such a saturated market, investing in building a strong brand identity is super important. Brand identity is more than just a logo and a name – it’s how your brand is perceived. It’s human side if you will. This is where creating a look, feel and voice for your fashion brand comes into play. For a detailed strategy on how to build a strong clothing store brand identity, visit our Build a Strong Brand Identity Using These 9 eCommerce Branding Strategies post.
When it comes to eCommerce strategy, you want to make sure you’re answering questions such as where your traffic (potential shoppers) will be coming from and what will make your products appealing to that traffic.
Additionally, and very importantly, part of your business plan should also include your pricing. Budget the price per product with these important clothing line cost considerations:
- Equipment, web development, hosting, etc.
- Design and development
- Production cost per product, including that of samples
- Labor and transportation
Once you know the costs, you are then able to work out your margins, where you’re looking for a margin of around 30-50% if using cut-and-sew models. However, at this stage you should also be looking at your biggest competition for pricing, ensuring you are not pricing yourself right out of the market.
Bonus Content: Want to Know How to Spy on Competitors? 12 Tools & Hacks
Step 5: Creating Your Online Clothing Store
Now comes the fun part: creating your online store.
The first thing you will need is your domain. We suggest buying this separately upfront as soon as you have your main idea. You want to make sure that the domain is still available after you have designed your range and built your site. For this, we would recommend Namecheap.
Alternatively, you can buy your domain directly through eCommerce platforms such as Shopify or WordPress.
Next, you will want to choose your platform and then your theme (or vice versa). This is one of the most important decisions you will make when creating your store.
Because your website, its design, and user-friendliness are as important as the product you are selling and shouldn’t be rushed. The most popular eCommerce website and store builder options are:
- WooCommerce (for WordPress)
If you don’t have the budget to hire designers or the time to teach yourself WordPress, then we suggest online store or website builders such as Squarespace, Wix or Sh opify. If you need more help choosing an eCommerce platform or online store builder to launch your clothing company then these guides are a good place to start.
- Main Differences Between Shopify and Shopify Plus, and How to Choose
- Magento Commerce vs. Shopify Plus – Who Comes Out On Top?
- Shopify, WooCommerce or Magento: How to Choose the Right Platform
Pro Tip: Another important part of setting up your store that deserves special mention is your product pages. Online shoppers only have product photos and pages by which to judge the quality and details of your products, so make sure that product photos and pages are of good quality – even when you’re dropshipping. Visit our How to Create Perfect Product Pages for Conversions post for more tips on product pages and CTA copy examples ! You can also Try Blum theme to create a distinctive design for your store.
Step 6: Launching Your Online Clothing Store
Once your products are in place, online business plan is set up, fulfillment is organized and site is done, it’s time to launch your online clothing store. Here are some launch tips to help you get started.
1. Define Your Launch Strategy
Are you going to run an eCommerce sales promotion ? Do a Facebook Live video? Use an existing email database to push teaser mailers? Whatever strategy you decide on, have it in place to roll out step by step as you launch. This should include tasks such as proofreading and testing your whole store’s functionality before launching.
2. Prepare Your Social Accounts
Before you launch your site, make sure your social media account pages are set and ready. In fact, have these active – with content – before your big launch. This will enable you to run your social media ads with the launch and market your new store to an already-growing following. And don’t forget your content marketing plan to encourage engagement and brand loyalty from your fashion audiences.
3. Have Your Email Marketing Strategy and Automation in Place
Make sure all your automation emails are set up and tested and that you have an email marketing strategy planned out for your first three months.
Pro Tip: Install a well-designed popup so you’re ready to collect email addresses, using discounts and coupons as incentives.
4. Make Sure Your Google Analytics and Google Ads Accounts are Set Up
Next, you will want to ensure that you have set up your Google Ads and Google Analytics accounts before launching. This will enable you to track traffic to your store during your launch in real-time and drive traffic through SERP ads.
5. Build Your Clothing Store Marketing Strategy
You will want your marketing strategy in place before, during, and after the launch of your online clothing business. A good eCommerce marketing strategy should include a variety of channels and approaches. This includes your:
- Content marketing strategy (which includes social media account posts (here are some TikTok video ideas to get you started), UGC, a fashion blog for your eCommerce website, influencer marketing; etc.)
- PPC marketing strategy (which includes all your Google, Facebook, Instagram, TikTok eCommerce ads and YouTube pay-per-click ads. Or you can use PPC management software to automate your PPC marketing strategy.)
- Email marketing strategy (cart abandonment emails, promotional emails, weekly newsletters, subscriber growth strategies, etc.)
- Shopify SEO marketing strategy (blog and website content and optimization)
Bonus Content: [Case Study] 9+ Winning TikTok Ad Examples and Why They Work
Step 7: Bringing Traffic to Your Online Clothing Store
The last step? Bringing traffic to your newly-launched online clothing store. The biggest traffic drivers are email marketing, PPC, content marketing, social media, guest posts on popular blogs, and influencers.
Bonus Content: Everything You Need to Know to Win with Google Shopping in 2020 [Full Guide]
For a new store without a fashion brand name, established SEO , or email database list, you will want to concentrate on Google Ads for eCommerce and social media ads – particularly Facebook and Instagram posts and ads – to get potential shoppers to your new store. but not any potential shoppers, your key target market audience. Don’t forget your influencer marketing paid partnerships; including Instagram sponsored posts !
You will also want to look to leading fashion examples for inspiration such as:
- Beyond Retro (vintage clothing label)
- Beautiful Disaster
- BlackMilk Clothing
Pro Tip: You can see marketing and growth case studies on these and other leading online fashion brands here . And don’t forget your holiday PPC campaigns , for peak clothing shopping seasons.
Although traffic campaigns are the most important factor in the success for any online business, it doesn’t need to be as daunting as it sounds.
With apps such as Traffic Booster, offering the best alternative to WordStream for online retailers – you can hand over the hard work, so to speak. This will enable you to focus on fulfilling your new orders and generating eCommerce traffic with real-time ad optimization.
Here are Traffic Booster integrated PPC channels and campaigns.
- Google Shopping
- Smart Shopping ( Performance Max ) campaigns
- Dynamic remarketing ads
- Search & Dynamic Search Ads
- YouTube Shopping & action ads
- Smart display campaigns ads
- Dynamic retargeting ads
- Instagram & Facebook acquisition ads
- Bing, TikTok ads , Pinterest Ads and more [Enterprise Edition]
There you have it: how to start a successful online clothing business in 7 steps. The key to any successful eCommerce business is being able to tap into buying intent. It is not only about figuring out who your fashion audience is and what they would be willing to buy and for how much. You need to penetrate a saturated niche (messaging and targeting) and separate yourself from your closest competitors (brand identity) and then follow it up with awesome quality clothes, unique designs and good service.
To recap the steps to follow on how to start a clothing business online the right way.
How to Start a Clothing Business Online
- Choose your online fashion/clothing business niche
- Pick your core apparel and fashion products
- Determine the best online clothing business model for your goals and budget
- Create a solid clothing company business plan
- Build your eCommerce website
- Boost initial sales with a good launch strategy
- Bring traffic (fashion-loving audiences) to your online clothing boutique with eCommerce ads
If you’ve just launched a clothing store or have questions before launching, post them in the comments below!
For more marketing inspiration to grow your clothing business online and boost sales, then these posts are for you:
- Ultimate Guide to Product Photography for eCommerce
- How to Scale an Online Clothing Business in 12 Steps
- How to Build Awesome Product Pages That Convert
- Full List of Print-on-Demand Products and Where to Find Them
- 9 Must-Have Strategies to Drive Traffic to Your Store
- Facebook Ads for eCommerce [With Examples]
- Google Ads for eCommerc e [With Examples]
- TikTok Ads for eCommerce [With Examples]
- How to Drive Online Conversions With Smart Shopping Campaigns [Full Guide]
- Top eCommerce Automation Tools
Nicole is a content writer at StoreYa with over sixteen years experience and flair for storytelling. She runs on a healthy dose of caffeine and enthusiasm. When she's not researching the next content trend or creating informative small business content, she's an avid beachgoer, coffee shop junkie and hangs out on LinkedIn .
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Clothing Line Business Plan – Free Online Boutique Template
Sell the hottest fashions with your own clothing line or fashion boutique. Use this free clothing line business plan to get your business started, including setting up an online clothing store from home.
Download this Clothing Business Plan free for easy editing in Google Docs or Microsoft Word:
Table of Contents
1.0 CLOTHING LINE BUSINESS PLAN – EXECUTIVE SUMMARY
Booming Boutique is a start-up clothing line business that will sell fashionable clothing to women of the Baby Boom generation. We will locate Booming Boutique in downtown Pleasantville, Florida, which is a popular retirement and tourist destination. While our initial goal is to open one boutique, expansion plans include potentially franchising our retail store and/or building a well-recognized brand name. In turn, we would hope to penetrate a sizable portion of the online retail market.
1.2 PRODUCTS & SERVICES
The fashion and retail industry tends to be overly youth focused. However, by closely following generational fashion trends as well as our own customers’ purchasing preferences, we will tailor our inventory to meet the specific needs of our clientele. We will solely focus on the our styles, colors and fits to flatter the lady Baby Boomer/ Meeting the needs of her figure will be our specialty.
1.3 MARKET ANALYSIS
The total sales reported in the U.S. retail industry in 2007 (including food service and automotive) exceeded $4 trillion. There are roughly 75 million Baby Boomers, half of which are women. In Pleasantville, the current population is just fewer than 40,000. 54 percent of the total population is women who have a median age of 48. The median income is $48,600. We will initially seek customers locally, but will increase our reach as we build our brand and secure our image.
1.4 STRATEGY & IMPLEMENTATION
Booming Boutique recognizes the importance of marketing for this clothing line business plan. And to that end, we plan to promote our retail business with an ambitious, targeted marketing campaign, which will include a grand opening event, local media coverage, print advertising and a direct-mail campaign. Our goal is to keep our marketing budget to no more than 5% of our gross annual sales, and we will partner with local organizations such as the Chamber of Commerce and Downtown Merchants Association as often as possible.
Robin Mathews and Joanna Jensen are co-owners and will co-manage Booming Boutique. Mathews has worked ten years in the retail industry, including four years as the manager of an antique furniture shop. She earned a BA degree in finance from Britannica College in Tampa, Florida.
Jensen’s experience lies in the fashion industry. She’s worked with designers, wholesalers and retailers for roughly 20 years. Jensen holds a BA in fashion merchandising from Colliers Fashion Institute in Miami, Florida.
1.6 FINANCIAL PLAN
Our company will earn revenue from our customers’ purchases of our products. Booming Boutique’s first-year income statement illustrates a profit margin of at least fifty-two percent, with a net income of $44,075 per month – after taxes. Finally, we have determined our break-even point will equal no less than $15,500 in total monthly sales. We project our annual profits to reach $380,000 by year three.
Our company will generate revenue from the retail sale of clothing and other merchandise. First year sales are projected to be $285,000, and we expect sales to surpass $525,000 by the end of year three. We will achieve month-to-month profitability within the first year.
1.7 SOURCES & USE OF FUNDS
Booming Boutique requires $282,000 to launch successfully. We’ve already raised $62,000 through personal investments and a small community grant.
We are currently seeking additional funding from outside angel investors and business loans. Start-up funds will be used for renovations, inventory and operating expenses such as rent, utilities and payroll.
Further, most of our initial investment will also be used to purchase retail equipment and inventory software – all of which will produce future benefits for the company.
A small portion of our investment will be used to create an online clothing store. There are inexpensive e-commerce tools that provide a very easy way to create an online boutique store where we can sell our fashions all over the world.
2.0 CLOTHING LINE COMPANY
2.1 company & industry.
Booming Boutique will be located in downtown Pleasantville, Florida. Our company is a retail establishment selling fashionable women’s clothing to up-and-coming Baby Boomer retirees. Our business operates within the retail industry and is classified under NAICS code 448120 – women’s clothing stores.
2.2 LEGAL ENTITY & OWNERSHIP
Booming Boutique is a multi-member Limited Liability Corporation formally organized in Florida. Robin Mathews and Joanna Jensen are the company’s principle owners. We hold equal shares of ownership in the company.
2.3 COMPANY HISTORY TO DATE
The Company is a new business aimed at providing women of the Baby Boom generation stylish clothing options to buy and wear. As the company’s founders and as Baby Boomers ourselves, we found that Florida’s current boomer-wear market is missing the mark.
In fact, most clothing shops for the 55+ set are still selling clothes that our grandmothers would have worn. As our local population ages and more Baby Boomers reach retirement-age and migrate to Florida, we recognize the need for a shop that caters to the up-beat, fashion-forward Baby Boomer generation who want to look and feel young.
Presently, Booming Boutique does not have a bricks-and-mortar location at the time of writing this clothing line business plan. In addition to starting an online boutique, we have identified an ideal spot in the downtown district of Pleasantville. The gorgeous area includes numerous restaurants, an art gallery, coffee shop, candy store and a picturesque park in the town square. We have signed a three-year lease for a 1,700 square foot building at $18 per square foot. Comparable properties are renting for $17-24 SF/Year.
Working with the property owner and the City of Pleasantville Downtown Redevelopment Committee, we have secured a $2,000 grant to beautify the façade of the building to include painting, signage and a new awning. We will only need minimal internal renovations such as installing dressing rooms and decorative items.
When considering the addition of wall mounts for merchandise, multi-level clothing displays as well as creative floor planning, this facility is large enough to support future growth. Additionally, we will be able to conduct all aspects of our business from this location since it has access to a loading dock and a back office for managers. This includes deliveries and shipments, inventory management and administrative duties such as finance, buying and marketing.
2.5 KEY ASSETS
Our key assets are our co-owners, Robin Mathews and Joanna Jensen, who bring tremendous experience and relationships to this business.
Once we launch Booming Boutique, our primary asset will be our brand, which will convey style, quality and a great shopping experience. In the long-term, it is this brand that will separate Booming Boutique from other retailers both locally and nationally.
3.0 CLOTHING BRAND – PRODUCTS AND SERVICES
We will earn profits by selling our merchandise. Our pricing structure will remain flexible, as we will implement suggested retail pricing on common brands as well as the standard practice of keystoning prices. Additionally, we will use a value-based pricing structure, which measures the value of our products to our customers such as easy access, quality, customer service and styles flattering to our target consumer. We will implement end of season sales, holiday and overstock sales, multi-buy savings and promotional coupons at strategic intervals.
3.2 FEATURES & BENEFITS
One key feature that separates Booming Boutique from all other local boutiques and chain department stores in the area is our commitment to providing women of the Baby Boom generation stylish, quality clothing options. Because our primary concern will be ensuring our consumers are happy with the fit and style of their purchase, we will provide products tailored to all shapes and sizes of women. In addition, we will make every effort to have petite and plus size versions of our merchandise in stock. If they are not in stock, ordering them will be easy, cheap and efficient.
Further, as we emphasize in this clothing line business plan, Booming Boutique will not just be a store that sells clothes. Our clientele will benefit from an experienced, knowledgeable sales staff. Out of the gate, our goal is to implement a superior customer service system. Beyond our friendly reception and an inviting atmosphere, Booming Boutique will also offer customers fashion information and advice. Our trained personnel will provide counsel that women simply cannot find at other clothing stores. The service is like a beautician who offers advice on what hair styles best complement his/her client’s face. Our hip and qualified fashion-industry expertise will ensure our customers walk away with the perfect outfit.
In Pleasantville, there are no direct competitors offering our unique services or targeting Baby Boomers specifically. In the Downtown District, the shops most closely competing with Booming Boutique are as follows:
- EcoWise Boutique, which targets a younger demographic and specializes in natural fiber clothing. They also carry local art and jewelry.
- Caddy Corner Kids, which targets parents shopping for children, specializes in children’s clothing, accessories and toys.
- Kati Kouture, which targets younger women, specializes in offering industrial chic clothing with “classic lines and a punk gothic edge.”
- Marjorie Joe’s Fashion & Gifts targets older women within our target demographic, but specializes in the more homemade, old-fashioned style clothing.
- Petal Place Boutique targets women within our target demographic as well, but they specialize in an affordable, folksy style of clothing with handmade shawls and embroidered shirt sets.
- Second Time Around targets women and may overlap our target demographic slightly. However, they specialize in consignment clothing.
There is one super-store within a 60-mile radius of Pleasantville. The store is similar to Walmart in that it sells lesser quality items at lower price. But there are two chain department stores. They sell men’s, women’s and children’s clothing along with home accents, electronics and appliances. While familiarity is comforting, industry research indicates increasing frustration with the inferior quality, sub par customer service and vastness of super-stores. Not to mention, the inept sales staff and lack of selection often found at department stores.
3.4 COMPETITIVE ADVANTAGE/BARRIERS TO ENTRY
To date, our primary competitive advantage is the absence of any store like ours in the Pleasantville area. In addition, company co-owner, Joanna Jensen, has worked in the fashion industry for more than 20 years. Her experience includes working with apparel retailers, clothing wholesalers, garment manufacturers, and fashion designers. She understands the fashion industry and knows how to spot the latest trends.
While there is no guarantee a competitor will locate within our area, we have no doubt in our fashion sense, outstanding customer service and quality products. In turn we will quickly establish Booming Boutique as the place for lady Baby Boomers to shop.
Also, we would be the only niche fashion retail-store for hip, older women. While other stores offer some style equivalents, they are not focused solely on the baby boomer generation. We are, and therefore, have a distinct competitive advantage in our niche.
Our supplier relationships and exclusive product offerings will prevent future competitors from entering the market as a competitor. Also, it takes time to build a retail store, and by the time a competitor attempts to compete with us directly, we will have already established a strong customer base.
As our company grows and our boutique earns a positive reputation, several opportunities will open to us. And we are considering some options already. Should we choose to remain a small local boutique, we will develop and grow our company by increasing existing clothing lines and expanding our selection to include additional products such as swim wear, lingerie, or sportswear. Within five years, we will assess the potential for franchising our stores in select locations.
Additionally, as we build our business, we plan to simultaneously develop an online clothing store for Booming Boutique. The power and ease of an online storefront is obvious to us, and we plan to develop one quickly and efficiently. We also see the potential for regional and/or national expansion at some point.
Our online clothing store will help to spread awareness of our product line and brand to a wider community.
4.0 CLOTHING LINE MARKET ANALYSIS
4.1 target customer.
Having said that, there are currently about 75 million Baby Boomers living in the United States. A boomer is better described as the generation born between the years 1946 and 1964. About half of this population is women.
While those born in the 1940’s are still slightly more conservative, those born during the 1950’s and 60’s were trailblazers and trendsetters. Specifically, these will be the women we target vigorously with our marketing and offerings. These women range in age from their mid 40’s to late 50’s. They value uniqueness, convenience, service and quality. As they retire, price does become a factor in decision-making. At the same time, they were always a generation of the “buy now and pay later” philosophy.
4.2 MARKET SIZE
Pleasantville accommodates a robust retail market. While car dealerships, grocers and home improvement retailers account for a sizable portion of the retail market, the main local shopping district is downtown. With tree-lined streets and quaint shops and restaurants, the downtown retail district is the social and shopping hub of the community. The current population of Pleasantville is just fewer than 40,000. 54 percent are women who have a median age of 48. Their median income is above the national average at $48,600. Moreover, according to National News, Pleasantville is one of the 2008 Top 6 Towns to Retire for Baby Boomers. Many of these retirees are looking to retire on the water in a cozy, yet thriving community.
In addition to local consumers, we will also benefit from tourist traffic. Pleasantville is located a mere 30 miles from the sandy white beaches of St. Petersburg and Clearwater. It’s also within close proximity to many Tampa and Orlando area attractions. Our town boasts a healthy and recession-proof tourism industry. In addition, Pleasantville hosts several annual craft and golf events, which bring several thousand of our target consumers into the area each year.
4.3 CLOTHING TRENDS
The retail fashion industry is a solid business with ever-changing styles and ever-present consumer demand. While supercenters and megastores ruled the past two decades, more and more consumers are looking for change. They’re searching for a more serene and customer-friendly shopping experience. This is true especially for those nearing retirement age. In reality, as the Baby Boomers numbers decrease, there will be fewer older Generation X-ers to sell to. However, this market decrease will not occur for at least twenty years. Even then, clothing will always be in high demand. The fashion industry in America has been thriving since the advent of moving pictures.
4.4 SWOT ANALYSIS
- Experience and understanding of the fashion industry
- Unique shopping experience with exceptional customer service
- Great downtown location
- Large and growing consumer base
- Untested market in Pleasantville
- While market is large, it is a niche market (Baby Boomers)
- Outstanding shopping experience will lead to repeat business
- Growing online clothing store Booming Boutique
- Establish a Booming Boutique clothing line
- Cost and effectiveness of marketing to women “Baby Boomers”
- New retail shops that may or may not open in the future
5.0 STRATEGY & IMPLEMENTATION
Our company’s core business strategy as highlighted in this clothing line business plan is to combine exceptional and knowledgeable customer service with quality stylish merchandise. And in turn, we’ll provide an enjoyable shopping experience for our customers. Booming Boutique’s mission is to offer women of the Baby Boom generation a wide selection of fashionable, figure-flattering clothing. Our aim is to establish our company as a pioneer in this youth-obsessed industry and build a boutique brand name that will be synonymous with the fashion industry revolution.
5.2 PRODUCT DEVELOPMENT
We are currently working with several apparel wholesalers, garment manufacturers and two freelance fashion designers to assemble our inventory. We are also working with city economic-development officials to secure all required permits and occupational licensees. Once we secure financing, we will move ahead with the façade renovation, which we will pay for via the PDRC. We will also use the financing to purchase inventory, retail displays, and office supplies.
Prior to the grand opening of Booming Boutique, we will schedule an event with the Chamber of Commerce and start our promotions with pre-publicity flyers, advertising and additional marketing activities.
5.3 INTERNET STRATEGY
As the Internet has become a staple of American life and retail merchandising, Booming Boutique will build a website on which we will sell our products, too. We have secured the domain name BoomingBoutique.com and will begin site development using Bluehost for website hosting and Thrivecart for a high converting online shopping experience. These platforms allow us to create an online storefront quickly and will manage all aspects of it including creating shipping labels, accepting payment, and monitoring inventory. Customers will also be able to create wish lists for items they want to purchase later.
Having this online presence will allow us to build our email marketing list and send regular promotions to customers with new product announcements, discounts, specials, birthday coupons, and fashion ideas.
Foremost, we intend to showcase our brand, our clothing and provide customers with the ability to purchase items online. As the site progresses, we will include features such as fashion advice, designer interviews, newsletters, and Internet-only specials. Eventually, we hope to establish and nurture an online social community where women can gather and discuss topics of the day, network and share clothing secrets.
5.4 CLOTHING LINE MARKETING STRATEGY
We both have strong marketing backgrounds and recognize the significance of effective marketing. We expect our strategy to draw consumers into Booming Boutique from the very beginning. Moreover we will hire a local PR firm to help us develop and implement a strategic marketing plan and guide our publicity efforts in a cost-effective manner. Our marketing message, logo and slogans will revolve around the idea of the Baby Boom generation as revolutionaries and trend setters. Boomer women are in their prime and at their best. Our store will recognize them as a force within the fashion industry.
Our goal in this clothing line business plan is to keep our marketing budget to no more than 5% of our gross annual sales. We will partner with local organizations such as the Chamber of Commerce and Downtown Merchants Association as often as possible. We already have connections in all the necessary places. These strategic partnerships will allow us to piggyback on publicity for local events, as long as they are within our targeted demographic. Booming Boutique’s initial marketing efforts will remain local as we establish a presence in our community. These will rely heavily on local print and broadcast media coverage, traditional advertising, signage, a direct mail marketing campaign and networking. We will initially allocate a significant portion of our advertising budget to print and broadcast media to get the word out.
Of course, we will build anticipation and excitement about the new boutique prior to its grand opening. Working in conjunction with the Chamber of Commerce, we are already talking about a grand opening soiree. This will include hors d’oeuvres donated by the bistro across the street and a silent auction of a local artist’s painting collection. The collection is currently on display in the Downtown Art League Gallery.
We will also hold a drawing for a $100 shopping spree and fashion consultation. Entry collection will start at the grand opening and continue throughout the week. We will use these names and contact information for follow-up marketing initiatives. The Chamber of Commerce and the Downtown Merchants Association will promote the event in local newspapers and radio advertising. Comprehensive advertising and semi-annual direct mail marketing campaigns will follow the grand opening. We will also take advantage of low cost publicity activities such as posting sale flyers on community bulletin boards and online.
5.5 SALES STRATEGY
Booming Boutique plans to generate sales via strategic marketing efforts. These concentrated efforts will be targeting new and returning customers as well as single-visit tourist consumers. We will also implement a referral program rewarding customers who refer new customers with discount coupons. Following our grand opening, we will conduct a direct-mail campaign to targeted consumers that we have signed up through our in-store mailing program. The direct mailers will consist of 5,000 full-color postcard mailers. Each will include at 10% coupon. We will offer promotional discounts and seasonal and clearance sales throughout the year.
Our sales staff will include both co-owners and 2-3 part-times sales associates. Combined, Jensen and Mathews have nearly 30 years experience in the fashion and retail industries. We will provide comprehensive training to each sales associate. This will include how to sell merchandise as well as how to provide fashion advice to customers. Our sales team will earn an hourly rate, plus a generous percentage of commission from each sale.
5.6 STRATEGIC ALLIANCES
Booming Boutique plans to join the Pleasantville Chamber of Commerce as well as the Pleasantville Downtown Merchants Association. These organizations are dedicated to promoting local businesses within our community and sponsor several events downtown each year. As a member of these organizations, Booming Boutique will gain exposure, make business contacts, and will benefit from Chamber and Association advertising, Web site promotions and events.
As a retail establishment, Booming Boutique will conduct business seven days a week from 10 a.m. to 6 p.m. Monday through Thursday, from 10 a.m. to 8 p.m. Friday and Saturday, and 12 p.m. to 6 p.m. on Sunday. During the holiday seasons and during special events, we will extend store hours. At this point, the retail store will take require approximately 2/3 of the building’s available space. We will use the remaining space for stock and administrative purposes. In addition to the two full-time co-owners, we will hire three part-time employees to serve customers.
Our company will secure merchandise from local manufacturers with showrooms in Orlando and Miami. We’ll also have access to the Florida Apparel Market, which is the largest wholesale merchandise warehouse in the state. Purchasing from FAM, buyers receive product displays and promotional materials with purchase. Additionally, we will work closely with our regional sales representative. We will also attend relevant pre-season fashion trade shows.
To control costs, track inventory and manage stock levels, we will put an inventory control system in place. This will include the standard bar code with its related equipment and software. Staff will conduct annual inventory audits and hire outside auditors when necessary. We will maintain all accounting and finances using Quickbooks online.
5.8 CLOTHING BUSINESS GOALS
The following is a list of business goals and milestones we intend to accomplish our first year of operations using this clothing line business plan.
- Complete renovating, stocking, hiring and initial marketing.
- Host a successful grand-opening event.
- Penetrate and raise awareness in 60 percent our targeted consumer market.
- Achieve a profit margin of 50 percent.
- Build a solid customer base and mailing list.
- Generate repeat and referral sales.
- Become a profitable business with expansion potential.
- Establish a solid reputation as quality retail establishment.
Our first major milestones will be securing funds and setting up our business. This is our major focus right now. In five years, we hope to have established our retail business within the community and within our industry. Furthermore, as co-owners, we would like to see the growth of our store with an increase in product lines, further penetration of the national market with online sales and, under the right set of circumstances, the opening of franchise Booming Boutiques in strategic locations.
5.9 EXIT STRATEGY
The co-owners intend to launch and grow Booming Boutique for many years into the future. In the event that our investors require repayment of their initial investments, plus a large return on their investments, we will seek a partner to buyout the investors’ shares. Another alternative is a management buyout, which will be agreed upon in advance.
In the long-term, we will position Booming Boutique as a profitable business that will be an appealing acquisition for any number of retail chains.
6.1 organizational structure.
As a small business, we will have a small staff. Both co-owners will assume leadership roles within the company and will be responsible for daily operations, overseeing marketing efforts, buying merchandise and managing inventory and all other administrative duties. A small sales staff will assist co-owners with securing sales, assisting customers and general maintenance of stock on the floor.
Co-owners, Robin Mathews and Joanna Jensen, created this boutique business plan. Both will co-manage Booming Boutique. However, daily responsibilities will differ.
Robin Mathews will manage the day-to-day operations including supervising staff, maintaining inventory and bookkeeping. Mathews worked ten years in the retail industry including four years as a manager of an antique furniture shop. Mathews earned a BA degree in finance from Britannica College in Tampa, Florida.
Joanna Jensen will oversee the merchandise buying for the store as well as maintain a keen awareness of trends within the industry. She will also work with our public relations firm to ensure superior marketing plans are in place and implemented. Jensen worked in the fashion industry in various capacities working with designers, wholesalers and retailers for 20 years. She earned a BA in fashion merchandising from Colliers Fashion Institute in Miami, Florida.
6.3 STAFF MEMBERS
Booming Boutique will employ a sales staff of 3 part-time employees. These positions are yet to be filled. However, we feel the labor pool is such that finding qualified employees will not be an issue. Our sales associates will be paid an hourly wage, plus commission. We will provide bonuses via sales incentives and conduct an annual review to encourage employee retention.
7.0 FINANCIAL PLAN
At this time we have raised $50,000 in equity capital and an additional $12,000 for a specific-use grant. Both co-owners, Robin Mathews and Joanna Jensen, have invested $25,000 each into Booming Boutique. We are seeking investors for an additional $170,000 in equity investment and $50,000 in loans.
7.2 USE OF FUNDS
We will use the funds we obtain from investment in this boutique business plan to pay for renovations, including the outside façade (to be paid for via PDRC grant), construction of fitting rooms, sales counter, painting, carpeting, lighting, decor and display fixtures. We will also purchase inventory, a cash register, computer equipment and an inventory management system. We will use the remainder of the start-up funds to cover operating expenses, such as rent, utilities, wages and marketing to increase retail sales .
7.3 INCOME STATEMENT PROJECTIONS
Based on our marketing plans , location, store size and product offerings, we expect to collect annual sales of $285,000 in year one, $375,000 in year two and $525,000 in year three.
Our average cost of goods sold will be 40%, which leaves us with a gross margin of 60%. Our minimum monthly fixed costs are $15,500 per month, so we will need to generate sales of $25,833 per month to break even. We will become profitable on a monthly basis before the end of our first year.
In our third year, we will earn net income of $105,000. The accompanying income statement demonstrates our company’s profitability.
7.4 CASH FLOW PROJECTIONS
Our business will collect immediate payment from customers, so our cash flow statement will be substantially similar to our income statement. Our cash flow statement clearly demonstrates our ability to cover all bills.
7.5 BALANCE SHEET
Booming Boutique will launch with $220,000 in equity capital and $50,000 in loans. Credit amounts and supplier terms for inventory will appear in our balance sheet as short-term liabilities. We will not document jewelry consignments from vendors in our balance sheet and will expense these items as we sell them. Details are shown in our enclosed balance sheet.
We base our projections on the assumption that the economy, consumer spending habits and population growth in Pleasantville will continue for the foreseeable future.
We must also assume that our present and future suppliers will continue to sell inventory to us at prices that allow us to maintain our present margins. It is also important that we are able to hire reliable employees at reasonable wages.
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How to create a business plan for a clothing line
Do you love fashion and making your own clothes? If so, you may have decided to launch your own clothing line.
Before being able to open your doors to customers and exchange your threads for cash, however, you'll have to write a tailor-made business plan.
Not sure what a business plan is or where to start? Don't worry. In this guide to writing a business plan for a clothing line, we've got you covered. Read on for our top tips on how to make your entrepreneurial dream into a reality!
What is the business plan for a clothing line?
The business plan for a clothing line enables an entrepreneur to examine their business in detail, evaluate the amount of funding needed to get it up and running, and assess its expected profitability.
It also serves as a roadmap for the business' first three years of operation. As your clothing line moves through its first throes of operation, you can use the business plan to track whether it's flourishing as it should, by comparing the figures estimated in your initial forecasts.
A clothing line business plan will also be specifically requested by any bank or investor you decide to approach, so drafting one up is a mandatory step when it comes to securing financing.
So what does a business plan for a clothing line look like? In a simplified way, it consists of two main parts:
- A financial forecast highlighting the expected financial performance over the next 3 years and the potential for profitability
- A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
What information is needed for a clothing line business plan?
Carrying out market research for a clothing line will be the very first step of creating your business. It will not only enable you to understand the dynamics of the market you've chosen to enter (whether it's luxury clothes or sportswear) but also help you verify whether there is an unmet demand for the clothes and accessories you wish to offer.
The market research stage pushes an entrepreneur to dive into the latest sector trends, expectations, and buying habits of future customers, as well as their competitors and the most effective channels for marketing and selling their products.
Once the market research is complete, you should be left with a clear target clientele, as well as a pricing strategy that's consistent with your concept.
You'll then be able to develop a marketing strategy to get the name of your clothing line out there, listing the budget to be set aside for these actions, whether it's setting up a website or paying for an ad in the local city guide.
Before writing your clothing line business plan, you'll also need to evaluate your staffing and equipment needs, and how your clothes will be manufactured - adding up the cost of each element.
Once you've gathered this information, you're ready to develop your financial forecast.
The financial forecast of your clothing line
Establishing the financial forecast is an integral step in the development of your clothing line's business plan.
It is composed of 4 main tables, highlighting different financial aspects of the company:
- Projected P&L statement
- Projected balance sheet
- Projected cash flow statement
- Initial financing plan
The projected profit and loss statement
With this table, you'll have an overview of the expected turnover, growth, and profitability for your clothing line over the first 3 to 5 years of activity.
The projected balance sheet
The projected balance sheet shows the value of the company's assets and liabilities at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc).
The projected cash flow statement
With the help of a projected cash flow statement, you will see how much cash is generated by your clothing line, where it comes from, and how it is used, whether it's enough to repay its loans or purchase new fabrics.
You'll also be able to see if you have enough cash to fulfil these obligations, or even if you might soon have enough cash to expand your business by opening more stores or warehouses.
The initial financing plan for your clothing line
This section of your clothing line's financial forecast gives your bank or investor a quick overview of the resources needed to launch your business and their costs - as well as ways in which they'll be financed, including via equity contribution, shareholder loans, and bank loans.
What does the editorial part of a clothing line business plan look like?
Once the financial forecast of your clothing line has been set up, you have the opportunity to put these figures and estimations into context by delving into the written part of your clothing line business plan.
The editorial section of your clothing line business plan is just as important as the financial forecast because it presents each aspect of the business in detail and proves to investors that you've thought carefully about the risks associated with it.
It's broken down into 7 sections, which we have summarised below:
The executive summary
Think of this section as the equivalent of a cover letter for your clothing line business plan. The aim here is to introduce your project to investors in as engaging and concise a manner as possible, encouraging them to read on and learn more about your exciting venture.
In this part, you place a spotlight on the business's partners and their roles, as well as the distribution of the company's capital and the location (or online domain) of your clothing line.
Products and services
This section explains the products being sold by your clothing line, as well as the manufacturing process of your clothes and accessories.
It's within this section of the clothing line business plan that you'll present the results of the market research we mentioned at the beginning of this article. The objective here is to demonstrate that there is indeed a viable business opportunity for your clothing line to flourish.
In this part, you'll reveal three key plans:
- Your sales strategy - the prices you'll set
- Your marketing strategy - the actions you'll take to attract customers and build customer loyalty
- Your risk management strategy - how you'll minimise the risks related to your business
From your employees to your relationship with suppliers, you'll detail the operational organisation of your business.
The financial plan
The financial plan puts your numbers into tables that you'll be able to present to potential investors so they get a better idea as to your expected profitability and how much funding you need.
What tool should I use to write my business plan for a clothing line?
Write your business plan using word or excel.
This solution has one major advantage: it's cheap.
Be wary, however, that you'll need to have an accounting background (or at least be very good with numbers) to write your plan in this way without making mistakes in the calculations.
Hire a consultant to write your financial forecast
Hiring a chartered accountant or consultant to take care of the financial part of your clothing line business plan is a good way to avoid errors.
However, the fees are generally quite expensive: budget around £1.5k ($2.0k) for a complete business plan, plus more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).
If you decide to hire a consultant or accountant, remember to check what's included in the service - are they developing a complete business plan or just doing the financial forecast? And are you willing to pay extra for them to make changes, if necessary?
Use online business plan software
If you're not used to writing business plans, another good solution would be to use online business plan software .
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by clicking here .
That's it for now, we hope this article has helped you better understand how to write a business plan for a clothing line. If you have any questions related to setting up your business, please do not hesitate to contact us.
Also on The Business Plan Shop
- Business plan template of a clothing line
- How to start up a clothing line
- How to create an ethical and sustainable fashion brand
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Founder & CEO at The Business Plan Shop Ltd
Guillaume Le Brouster is a seasoned entrepreneur and financier.
Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.
Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.
Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.
Published on 09 Feb 2021 , last update on 09 Jun 2023 , as per our editorial standards .
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10 Steps to E-Commerce Clothing Business Plan
- 15 November 2022 21 November 2022
Whether you are a new e-commerce business start-up or a conventionally operating brick-and-mortar fashion retailer, there is no denying that our era is digitally derived. In this age of post-pandemic technology, it is impossible to thrive globally with international competitors without an online website platform.
However, having a successful clothing line and a fruitful e-commerce platform requires more than just a passion for fashion and design. Furthermore, setting up a website for your e-commerce business requires more than just a technical whiz. If you want a lasting business performance, you must have an e-commerce clothing business plan.
So, to have a successful e-commerce fashion brand follow us on this step-by-step journey outlining your e-commerce fashion business model.
Who Should Implement This Online Fashion Retail Business Model?
The online fashion retail business model in this article is a detailed plan transcribed for any newly launched e-commerce business or any established fashion brand wishing to just launch an online store to complement its physical brick-and-mortar establishment.
Although, if you are an organization with already established conventional store and online platform representation you can still read through this article to update your brand’s online performance, using this clothing e-commerce website business plan.
E-Commerce Clothing Store Business Plan; A Step-By-Step Model For Fashion Lines
A business plan is a roadmap that details the foundational aspects of a company, including its products or services, funding sources, management team, employees, organizational structure, financial viability, strategy for generating revenue, Key Performance Indicators, and more. It is a well-thought-out plan outlining the specifics of your online clothing store and the goals you hope to achieve in the future.
If you are an already established conventional fashion store just setting up an online division we would still recommend having a new business plan specific to your online apparel store. So, let’s hit it off, with the components of the 10-step-by-step e-commerce fashion store business plan:
1. Business Outline
To start strong with your online fashion retail business model, you must start with what you know. This is the foundation of your business plan. It is the summary of the whole business plan on one page, so we recommend writing it at the end, though it should be placed first. It should include:
Executive summaries are meant to pique the reader’s interest and provide a quick overview of the firm. It is the first impression of your brand that the executive summary could help you attract investors. It should include the issue being addressed, the intended clientele, products, services, and the most crucial accounting projections.
In two sentences include the product and the idea behind your fashion brand. Also, add the competitive advantage your fashion and e-commerce line hold to your competition.
The Brand and Team
Introduce your brand and the team that has made the magic happen.
Legalities and Registrations
Whether you are a conventional fashion outlet or an e-commerce clothing store you need to register your business legally. Consequently, outline the details to prove your legitimacy as an authorized enterprise.
Scope Of Business
Outline and set the scope of your business in a few lines. Answer the question: what do you do presently, tomorrow, and in the distant future?
2. Business Objective = Identity
Your business objective is your identity and so a critical part of your branding. Your objectives should reflect in your every endeavour concerning your employees, investors, and consumers. Thus, if you wish to be a successful online enterprise you must have a clear objective of what you wish your identity to be as an online fashion store. You must identify:
Your brand’s mission statement should describe the services or products you provide to your target consumers. A mission fulfilled reaches your vision.
The vision is the desired long-term outcome. Naturally, these objectives will lack motivation unless they are infused with some degree of ambition.
Every company needs to have its values as its guiding principle. These core values are the ideals that represent your company. Your fashion brand should incorporate these values when managing your enterprise, online services, leadership, employees, consumers, and business decisions.
Although you should get creative with your mission, vision, and values and they should be in line with one another, do keep them simple and to the point. Remember your mission, vision, and values should later be presented to the public on your website. So, try to set objectives that you; can uphold, are ethical, and environmentally conscious.
3. SWOT Analysis
A SWOT Analysis is the Strength, Weaknesses, Opportunities, and Weaknesses (SWOT) strategic planning matrix for your developing fashion business. Creating a SWOT analysis can give you new perspectives and a fresh approach to your fashion business strategies both as an e-commerce clothing store or a conventional retailer.
4. Return on Investment
Once you have identified your SWOT Matrix you must identify your return on investment source by analyzing factors like:
- Competition – The competition you may have in your fashion line and how you can overcome them.
- Legalities – The legalities that apply to your e-commerce fashion business platform and the requirements you need to implement.
Then once you have identified those you must outline your solutions and advantages and how your e-commerce business strategy could generate a return on investment for your enterprise.
5. Technology Assessment
One of the most effective ways to gain dominance over online fashion retailers is through the technology you utilize within your website. So, analyze your e-commerce competition and then outline the technology which you wish to utilize in your online fashion retail business model.
For instance, since e-commerce fashion retailers are in abundance and consumers are looking for convenient online shopping experiences it would be wise to incorporate technologies like Robosize that provide size and style recommendations. This way you would gain the upper hand over your competition while boosting their business’s return on investment, sales, and profits.
6. Products and Services
You would need to identify the most detailed aspects of your products and services to identify your target audience by outlining them.
- Your Product and Service, and its value compared to the competition.
- The Product and Services prices
- Estimated Profits
- Financing expenses of procuring the products and services
- Risk Analysis for the specific products
- Technique for presenting the products to consumers
- Technologies required for apparel production, sales, and distribution
Finally, once you have outlined these criteria, you could identify your target audience and why users would ultimately choose to purchase your fashion and apparel product. Which would then provide your e-commerce clothing store business plan with a value estimation of your possible earnings.
7. Digital Marketing and Advertising Strategy
E-commerce platforms must have a digital marketing and advertising strategy to succeed. Unlike a traditional store, apparel consumers won’t find your website if they don’t know you. Thus, initiating your digital marketing and advertising strategy before launching your e-commerce fashion store website is wise.
However, before launching your digital marketing strategy you must create a plan outline. Although it is part of the e-commerce clothing store business plan it is one component that demands in-depth analysis. You must identify your e-commerce marketing and advertising strategy by considering approaches like:
- Social Media Marketing
- Search Engine Optimizations (SEOs)
- Video Marketing on YouTube
- Pay-Per-Click Ads
- Facebook Ads
- Instagram Ads
- UGC / User-Generated Content Marketing
- Influencer Marketing.
- Email Marketing
- Content Marketing
Though the list above may seem overwhelming and scary for an online shop, the best aspect about e-commerce businesses, in general, is that all the approaches for a Marketing and Advertising Strategy are far cheaper and environmentally friendly than traditional strategies.
8. Operational Plan
The operational plan in your online fashion retail business model will detail the steps it will take and the goals you’ll have to strive for to reach your business objectives. It’s the backbone of how an e-commerce business will function daily. The typical time frame of an operational plan is 12 months.
The Operational plans will establish information like; daily routines, order of tasks, working hours, employee meet-up locations, physical office location, product procurement, inventory management, outsourcing companies and tasks assigned, employee tasks, managerial responsibilities, and anything that may be in-line with the operations of your e-commerce clothing store.
By planning and strategizing your operational plot you can identify your strong and weak points and touch up on them depending on the results. The components you must consider for an online fashion platform are;
The support and services you provide to your online customers are paramount to converting browsing customers to buying clientele. This is because online, unlike a conventional brick-and-mortar store you would not be available physically to attend to your customers or provide a good first impression.
So, this task must be fulfilled through the services, technologies, and widgets provided. Some customer service facilities you can offer on your e-commerce fashion and apparel platform, include.
- Contact Us Pages
- Virtual Fitting Room Technologies
- Size and Style Recommendation Tools, and
Consider your e-commerce fashion line’s return policies. These could make or break your organization and the success it expects. So, consider the matter carefully. For example, if you are worried about hygiene issues or have garments that can’t be returned, we would suggest virtual fitting rooms for E-commerce . This way your consumers can shop with assurance without ever having to return an item due to sizing and styling issues .
Risks and Issues
Any conventional store or clothing e-commerce website business plan must include possible risks and issues in the business. Some risks you could include that are in line with e-commerce fashion platforms are:
- Product Damages and Faults upon arrival from supplier,
- Problems with garment supplies,
- Lack of fashion apparel in the inventory,
- Website lags due to website traffic,
- Complaints regarding website user interface,
- Problems with postage,
- Loss of products in delivery,
- Website Management Issues
You must list the risks and issues while also stating the solutions and possible people in charge.
Other Operational Factors
Additional operational factors that you must consider when strategizing your operational plan are:
- Procurement of Equipment and Supplies
- Website Design, Run, and Management
- Inventory Warehouse Location
- Inventory Management
- Delivery Carrier Service Provider
9. Financial Plan & Forecast Estimations
A financial plan and projection forecast will outline how finances will be handled based on estimated costs, forecasts, predictions, and strategic calculations. While the financial plan outlines necessary strategies for generating future incomes and covering expenses. The Financial forecast projects the future incomes, revenues, and expenses.
Both the financial plan and the forecast estimation are essential for an e-commerce fashion line that wishes to prosper. Hence, the more detailed the outline in the document the less chance for the online fashion store to face unexpected expenses that could bring disadvantages and loss. You should usually outline your financial plan for the first one or two years of the online business.
10. Funding and Sponsorships
It is rare for an online fashion retail business to require funding and sponsorship. Particularly if you are a new start-up and still do not plan to have a conventional outlet. However, if you do require funding and sponsorship you would have to include the details of your external financing in your e-commerce clothing business model too. In this section, you would have to establish:
- The Monetary Funding and Sponsorship amount required
- The financing detail of why the money is required
- What will the fund be used for?
- Current and future expenditures
Funding requests must be tailored to the funding source so do not take this section lightly if you wish to attract your sponsor’s approval.
A Successful Online Fashion Store
To have a prospering e-commerce clothing and apparel store you need to start your brand by writing an e-commerce website business plan. A business model will be the foundation that would build your organization. However, do remember that to have a successful online fashion business you should also apply:
- Innovative Technologies to entice Gen-Z consumers.
- User-friendly website interfaces to allow smooth and quick purchases on any device.
- Virtual dressing rooms to lower returns, boost sales, and reduce pollution using AR and AI sizing and styling suggestions.
- Sustainable Technologies to reduce carbon footprints and promote eco-friendly practices both among online apparel stores and fashion consumers alike.
Remember that we are in the era of technology and a successful online fashion website requires innovation and cutting-edge technologies along with the source of a well-planned e-commerce clothing store business plan.
Virtual Fitting Rooms for E-commerce Businesses: A Fashion Retailer’s Guide
Let’s discuss about your fashion E-commerce.
E-Commerce Clothing Store Business Plan Model
An online fashion retail business model or a business strategy plan for a conventional store is only the initial step to setting up a physical or an e-commerce clothing store. Launching any business physically or online requires a lot more planning, strategizing, design, functionality, and implementation.
It is just important to remember that even though a business plan is written to forecast a full year in the enterprise it should never be set in stone.
A business plan should always be the first point of reference when operating your e-commerce store. Still, it should also constantly be updated to include any unforeseen changes or strategic deviations. Henceforth use our 10-step online clothing and fashion store business plan model for a profitable and prosperous e-commerce fashion enterprise.
How Vesper 247 Boosted Their Sales Using Robosize Virtual Fitting Rooms
Hombakazi Step Towards Business Success With Robosize
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Development of a business plan for launching an online clothing retail shop
Project report, 2013, ali hammad (author).
Free online reading
Table of Contents
1.0 Business description 1.1 Background and history of the online retail clothing industry 1.2 Description of the product 1.3 Goals and objectives of the business 1.4 Supplier Information and agreements 1.5 Ownership structure 1.5.1 Investment of funds 1.6: Legal consideration
2.0 Business opportunities 2.1 Potential customers and geographical area 2.2 Business competitors 2.2.1 Differentiation from competitors
3.0 Marketing strategy 3.1 Costing and pricing 3.2 Marketing plan 3.3 Sales Projection
4.0 Business operations 4.1 Operational functions 4.2 Personnel 4.3 Services offered
5.0 Finances 5.1 Expenses 5.2 Revenue 5.3 Final Projections
6.0 List of references
Business plan for online clothing retail store
1.0 Business description
Online clothing retail store has been selected for developing a business plan. Some of the critical and important issues have been discussed in this section such as; background and history of the business, goals, description of the product, supplier information, agreements, ownership structure and legal considerations.
1.1 Background and history of the online retail clothing industry
The online clothing industry has doubled over the last five years, as the increasing number of users has access to broadband and smart phone and forsaken the high street (Telegraph, 2011). According to a report by Mintel, 4.3 billion £ worth of the clothes are bought online in the year 2011, up from 26 percent in the year 2010 (Telegraph, 2011). Online shoppers spent 10.1 billion pounds in November, 2013 (IMRG, 2013). On the other hand, mobile commerce is also becoming an important medium for sellers to sell their products (Capgemini, 2013). Online business has various advantages compared to traditional business, which can be seen in the figure below:
Figure 1.1 Advantages of online business
Abbildung in dieser Leseprobe nicht enthalten
Source: SAS, 2013.
Hence, stepping in to online clothing retail business can help entrepreneur to sustain, grow and make profits with the extremely positive market growth.
1.2 Description of the product
The business is new online clothing store, which provides comfortable and easy clothing buying solutions to men and women, through its own website and an online e-bay store. The business focuses on retail clothes and shoes for men and women, which will be available in different sizes, colours and will be designed and manufactured keeping in view the latest fashion trends of the fashion industry. In short, following products will be offered:
- Jeans (men and women) - Shirts (Men and women) - T-Shirts (Men and women) - Shoes (Men and women)
1.3 Goals and objectives of the business
Goals are important to the business and they define destination and shape future of the business (Marshall, 2005). According to (Zimmerman, 2011) following are the goals of internet business, which must be taken into consideration while starting an online business:
- Providing customer service through information - Generating leads or qualifying prospects - Generating revenue through advertising sales - In addition to the above goals and objectives, entrepreneur will also focus on achieving goals such as follows: - 100 percent positive customer feedback on e-bay - Create positive word of mouth through social networking and websites.
1.4 Supplier Information and agreements
China is the largest supplier and exporter of clothes and apparels in the world (Worldbank, 2010). Since customised clothes with the demanded quality can be imported from China at the convenient price, entrepreneur will focus on importing all the products from China due to low cost and reliable suppliers with tremendous reputation are available over the internet. Moreover, in the start-up of the business emphasis will be given to signing agreement with supplier on low price per unit of the product, to increase the profit margin. Similarly, defected pieces and return policy will also be the part of agreement with the supplier.
1.5 Ownership structure
The ownership structure followed by entrepreneur will be sole trader. According to BBC (2013); following are the advantages of sole trader:
- Generally small amount of capital is needed which reduces the initial start-up cost. - It is easier to make decisions - The wage will be low because there are few employees
Contrary to this there are some disadvantages as well such as; unlimited liability and bankruptcy (BBC, 2013). But keeping the business plan, objectives and goals in view, Sole trader organisational structure is best to be opted.
1.5.1 Investment of funds
All the investments will be done by entrepreneur himself, by investing from savings and using credit cards and over-draft facilities by different banks. According to (Timmons, 1990), entrepreneur must arrange all the finances by himself and should not try to find any investors. Moreover, this is a small project with low investment and high growth potential. Keeping in view the amount and future growth opportunities, entrepreneur will invest by himself.
1.6: Legal consideration
Considering legal obligations, entrepreneur first needs to get a domain name to register the website. Similarly according HM Revenue and customs, UK (2013), following is the criteria for registering sole trader business in UK:
- Self Assessment (Information about sole trader) - National Insurance details. - PAYE information if there are any employees in the company.
2.0 Business opportunities
This part of the business plan focuses on the critical issues related to business opportunities, such as; potential customers, geographical area and business competitors.
2.1 Potential customers and geographical area
As the online clothing shop has to offer products according to the new fashion trends, so potential customers will be both males and females between the age of 16 and 35. According to (Peterson & Tiffany, 2004), focusing one specific customer group with specific demographics is better for an online business. Similarly, All 16 – 40 years old male and females will be targeted across United Kingdom, who use internet.
Here are some latest statistics of internet users given by national statistics (2013):
Figure 2.1 Internet Users and non users by age group (years) in UK, Q1 2013
Source: Office for national statistics, 20013.
It can be seen from the figure 2.1, 100 percent of males and females use internet between the age group 16 and 44. In the light of the data examination, selection of potential customers between the age group of 16 and 40 is ideal, as they all use internet and follow latest fashion trends. Since 100 percent of the males and females use internet between the age group of 16 to 40 years in the United Kingdom, so they all will be target across the country. As internet users between 16-40 years of age are the target group in the UK.
2.2 Business competitors
Online clothes retailers are expected to face a tougher competition in the coming year (Manhattan Associates, 2013). According to a report published by (ibisworld, 2013), there are 648 clothing stores, which are reliable and making profits. The competition is to compete and survive in the market at business start-up with these 648 stores.
2.2.1 Differentiation from competitors
Differentiation is very important in online business industry, as competition is very high due to its high growth and profitability (Tuunainen & Rossi, 2002). Bummat model bsed on (based on Järvelä & Tinnilä, 2000) to implement the overall online business plan in order to be effective, efficient and be different from competitors.
Figure 4.1 Bummat Model for customer channels
Source: (Tuunainen & Rossi, 2002)
In analysis, (Tuunainen & Rossi, 2002) have examined that successful websites such as; feelpretty.com has used and focused on all these components, which are highlighted in the model to be successful and different from competitors and sustain in the market.
3.0 Marketing strategy
This section of the business plan discusses strategies such as; costing and pricing, sales projection and marketing plan.
3.1 Costing and pricing
According to (Bloomberg, 2013) cost of getting jeans manufactured from China and Bangladesh is 90 pence and a shirt of different design is around 0.70-1.5 pounds. Based on the cheap manufacturing costs, the price of the products will be around 10 pounds for jeans and same for the shirt, to make profits and cover all expenses and costs in the start-up. As the competitors and majority of the clothing retail shops and e-bay and from their own websites are selling from 17-20 pounds per item.
3.2 Marketing plan
According to (IMA, 2013), internet marketing consists of activities, which must be taken in to account to create successful internet marketing plan:
Figure 3.1 Activities of internet marketing
Source: IMA (2012).
Similarly, there are some advantages of using all these activities for the marketing plan as they are very cost effective and majority of them are free. According to (The prince’s trust, 2013) Following are the advantages of using internet based marketing activities:
Table 3.2 Advantages of internet marketing activities
Source: Prince’s trust (2012).
Hence, due to several advantages and existence of business in the online platform, all the internet activities will be used to market and advertise the online clothing brand, as shown in the figure 3.2 above.
3.3 Sales Projection
Online clothing industry is growing by leaps and bounds, with the growth rate of almost 26 % each year (Telegraph, 2011). Based on the industry growth rate, the projected growth rate of the business is 5 percent in the first year. During the first year, with passage of earning revenue and profits, more money will be invested in to the business and growth rate will subsequently increase to 10 percent in the second year and to 15 percent in the third year, due to extensive and continuous online marketing and increasing product line. It is shown in the figure below.
Figure 3.2 Sales projections in terms of year and percentage
4.0 Business operations
This part of the business plan includes; operational functions, services offered and personnel.
4.1 Operational functions
Internet retailers must turn online visitors into buyers, to achieve that retailers must provide an online experience which influence and make consumer to buy the product (Linton, 2013). Following are some of operational functions based on article by (Linton, 2013), which will be followed by the company at-start to gain sales and attract customer and run operations of the retail shop successfully.
Table 4.1 Operational function of the retail shop
Adapted from, (Linton, 2013).
As the business is started up and handled by the entrepreneur himself, so there will be no personnel in start-up of the business. All the business operations will be handled by entrepreneur himself. On the other hand, Website infrastructure management, website design, mobile application and all the technology related issues will be outsourced to an information technology company, which will be available to resolve any issues in the system when needed. So the costs related to the personnel associated with the business are variable and will vary according to the help needed to call professionals to resolve any technical issues related to the website.
4.3 Services offered
The British customer is demanding more and more from the customer service they receive (Ecommerceweek, 2013). As the consumers are getting more demanding in terms of receiving customer service, hence to fulfil the requirements of the potential and existing customers, business will offer the following services to the customer so that they can be loyal and come back to buy the products and spread positive word of mouth regarding the brand. Following will be the services provided by the clothing brand:
- Dealing with customer complaints. - Replying to queries within 24 hours of receiving them. - Free delivery on orders above 50 pounds. - 100 percent refund if the product is defected at buying. - 28 days return policy. - Loyalty memberships for regular customers.
This part of the business plan focuses on the revenue, expenses and final projections:, 5.1 expenses.
Identifying the start-up costs for a venture helps to know the amount of money needed before opening the doors of the business (Fasttrac, 2005). By examining and analysing the expenses related to the business, following are the expenses which are needed in the start –up to start the business.
Table 5.1 Expenses for starting online clothing shop
As it can be seen in the table above, total expenses required to start-up are 10,000 pounds. While 5700 pounds are assets which includes cash in hand and inventory at start, while on the other hand 4300 pounds are expenses, which include different costs, which will incur at start.
According to (SAS,2013), out of 88 visitors to the website, 4 of them buy the product in a day from an average retailer’s website. Hence, due to diversified online marketing, it is being assumed that, in the beginning, 4 products will sell in a day at start- up. On the basis of this, the revenue and profits have been calculated as follows:
Table 5.2 cost per unit of the product
As it can be seen in the table above the average cost per unit is 3 pounds after including all expenses. Moreover, the monthly fixed cost is 350 pounds which includes the rent of the store, where stock is kept to dispatch for the final delivery. Hence the breaks – even which will cover all cost and bring the owner to no – profit and no loss situation is calculated as follows:
Figure 5.1 Break even analysis
Hence 88 units are required to come to the break even position. Similarly as four units a day are getting sold, total revenue is calculated as follows:
Table 5.3: Profit calculation in one month
As 32 units are profit for a month in terms of cash, entrepreneur will earn 320 pounds a month in start which will start increasing with passage of time, due to extensive growth rate of the industry.
5.3 Final Projections
It has been calculated earlier that the sale will increase by 5 percent in the first year, 10 percent in the second year and 15 percent in the third year. Based on that, following are the final projections in terms of sale and year.
Figure 5.2 Sales projections in terms of year and sales in pounds
It can be seen from the figure 5.2 sales are continuously increasing every single year. In the first year sales are 1440 pounds, in the second year 15840 and in the third year 18216 pounds subsequently.
BBC (2013), ’Sole traders and partnership’ [online] Available at: http://www.bbc.co.uk/schools/gcsebitesize/business/aims/partnershipsrev1.shtml [Accessed: 28 November, 2013].
Bloomberg (2013), ’90 cents- the cost of manufacturing a jeans in bangladesh’ . [Online] Available at: http://hereandnow.wbur.org/2013/07/10/bangladesh-factory-safety [Accessed: 4 December, 2013].
Capgemini (2013), ‘ £87 billion to be spent online in 2013 , [Online] Available at: http://www.uk.capgemini.com/news/87-billion-to-be-spent-online-in-2013_pr2411 [Accessed: 28 November, 2013].
Ecommerceweek (2013),’ online retailers offer the highest standards of customer service’ [Online] Available at: http://www.ecommerceweek.co.uk/item.php?news_id=115 [Accessed: 7 December, 2013].
Ibisworld (2013), ’Online womens clothing sales in the UK: Market research report. [Online] Available at: http://www.ibisworld.co.uk/market-research/online-womens-clothing-sales.html [Accessed: 2 December, 2013].
IMA (Internat marketing academy (2013), ‘ developing an internet marketing strategy ’ [Online] Available at: http://www.ftvs.cuni.cz/hendl/metodologie/developing-an-internet-marketing-strategy.pdf [Accessed: 11 December, 2013].
IMRC (2013), ‘ Highest ever monthly online spend in November’ [Online] Available at: http://www.retailgazette.co.uk/articles/03341-highest-ever-monthly-online-spend-last-month-says-imrg-capgemini [Accessed: 01 December, 2013].
Linton (2013), ‘Best practices for online retail operations’ [Online] Available at: http://smallbusiness.chron.com/practices-online-retail-operations-36326.html [Accessed: 25 November, 2013].
Marshall.I.M (2005), ’Defining your business through goals and objectives : First steps for new entrepreneurs’. [online] Available at: http://www.extension.purdue.edu/extmedia/ec/ec-727.pdf [Accessed: 4 December, 2013].
National statistics (2013), ‘Internet access quarterly update: Q1 2013’ [Online] Availabe at: http://www.ons.gov.uk/ons/dcp171778_310435.pdf [Accessed: 29 November, 2013].
Price’s trust (2013 ), ‘Marketing methods’ [Online] Available at: http://www.princes-trust.org.uk/pdf/eec-workbook-page%2079-80-81.pdf [Accessed: 3 December, 2013].
SAS (2013), ‘How UK will shop: 2013’ [Online] Available at: http://www.sas.com/offices/europe/uk/downloads/retail/retail-predictions2013.pdf [Accessed: 25 November, 2013].
Telegraph (2011), ‘ online clothing sales double’ [online] Available at: http://fashion.telegraph.co.uk/news-features/TMG8451109/Online-clothing-sales-double.html [Accessed: 01, December, 2013].
Tuunainen.K, Rossi.M. (2002), ‘E-Business in apparel retailing industry: critical issues’ [Online] Available at: http://is2.lse.ac.uk/asp/aspecis/20020147.pdf [Accessed: 4 December, 2013].
World Bank (2010), ‘The global apparel value chain: ride and crisis’ [Online] Available at: http://www.researchgate.net/publication/46444042_The_global_apparel_value_chain_trade_and_the_crisis__challenges_and_opportunities_for_developing_countries/file/32bfe50d85b7f78c48.pdf [Accessed: 25 November, 2013].
Zimmerman.J (2011), ‘ Web marketing for dummies’ [Online] Available at: http://www.dummies.com/how-to/content/setting-goals-for-your-online-business-presence.navId-811455.html [Accessed: 2 December, 2013].
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