How to Start an Online Boutique in 11 Steps

Starting an online boutique from the ground up can be intimidating, especially if you don’t know where to start. Read on to learn how to start your own online store.

Owning an online boutique can be rewarding, especially if you love to shop for clothes and share your finds with others. Online shopping has increased in popularity recently, and many sophisticated clothing shoppers prefer online clothing boutiques. Starting an online boutique requires focused attention to beauty trends, so you can order the latest fashions from clothing vendors.

An online business that features the latest fashions would be a challenge, but fashion is an exciting industry to join. A clothing boutique usually attracts a niche audience based on the type of clothing sold. This means that before you start, you need to do some research into the logistics of how to run an online business, and which audience you want to target with your online boutique.

Let's talk about how to start an online boutique, starting with what you envision when you think of an online clothing boutique.

What is an online boutique?

An online boutique isn't your average online clothing store. Instead, it is a good business idea for someone who loves fashion and keeping up with the latest clothing trends. However, it's not good enough to just be someone who loves fashion.

With so many businesses in the fashion industry opening or expanding their online offerings, you need to find a niche that reflects your unique vision. With the advancements in digital technology, it's so much easier to start an online boutique. You can start working out of your home with minimal storage space, or you can go big and stock inventory that you're confident will sell.

People like to buy online because it's so convenient. The key is working out the logistics, marketing, and stocking inventory that sells. If you've never started a business before, you might feel a bit overwhelmed. Just take a deep breath and focus on which "how to start online boutique" idea works best for your business.

The rise of online boutiques

The pandemic didn't start the ecommerce trend, but it did put ecommerce growth on a fast track. It introduced the pleasure and convenience of online shopping to many customers who'd never purchased anything online before. Since people were forced to stay home, they turned to online shopping for items they couldn't find locally. In fact, according to eMarketer,

This year (2022), worldwide ecommerce sales will exceed $5 trillion for the first time, accounting for more than a fifth of overall retail sales. Despite slowing growth, total spending will surge past $7 trillion by 2025.

The number of online boutiques is growing. Why not join that trend? "In 2021, online fashion sales accounted for 23.51% of total retail e-commerce sales in the United States." Customers love the speed at which they can receive an order, that they can compare shops, and how easy it is to return items that don't work out.

The advancements in digital technology for marketing, operations, and shipping make personalization possible even for the smallest startup. While you still have to compete with the big guys, fashion entrepreneurs can find a niche with opportunities to shine.

Recent innovations in AI and VR are making shopping more entertaining and micro-personalized. You don't have to be a large corporation to start an online boutique and drive clothing sales.

How to start an online boutique

Let's face it. Starting a new business is hard work. But if you're willing to put in the work, your business will blossom. Some of the steps you'll take will be common to all ecommerce businesses. But, you'll have to make some decisions unique to your ecommerce clothing boutique.

1. Give your online boutique a name and entity type

Your online boutique business needs a name and business structure. You can be a sole proprietor, add a partner, or create a more complex structure. Here are some of the most common business-type options.

  • Sole proprietorship - If you're a sole proprietor, you are in charge. But, you're also the person who has to do everything. Setting it up is easy because you don't have to register with the state you're operating in. In this type of business, you report your business income and losses on your personal tax return. It also means that you're responsible for any debts or legal obligations your boutique accrues.
  • Limited Liability Company (LLC) - An LLC offers more flexibility as a business entity because it separates any business liabilities from your personal liabilities. You can choose to have an LLC taxed like a corporation or as a pass-through entity.
  • Corporation - You have two options when forming a corporation - S-corp or C-corp. As a corporation, your online boutique is a registered business entity and has liability protections. It also has a different ownership and tax structure than LLCs or sole proprietorships. If you think you'll offer stock in the future, then you need to have a corporation.

These decisions should be made with the help of a tax or business attorney's advice to help with the complexities in each structure.

Choosing a Name

Choosing a name for your business is as easy or hard as you make it. A good place to start is your state's online business database to check for name availability. You should also check federal, state, and local trademark listings to make sure your boutique's name or logo doesn't infringe on another company's intellectual property.

It's also helpful to double-check domain names, although you can often find domain names available with a lesser used top-level domain (.com, .net, etc.). Having a good domain name is important because that's the URL your website visitors will use to find your online clothing boutique. If the domain name you want isn't available, you should consider changing the name of your boutique to one that is so your customers won't be confused.

If your business entity is in a format that doesn't need to be registered with the state, you should consider filing a DBA (doing business as) form, so you don't publicly tie your name as a default to your online boutique's name.

2. Creating a complete business plan

Once you've established your name, entity type, and domain name, the next critical step is to create and complete a business plan. A business, even one that is only online, takes an initial investment and a well-thought-out plan to build, grow, and succeed. While the business plan may seem tedious and take a long time, it's worth it to take that time to complete it.

A business plan is a pathway to follow in order to set up your business. It's similar to an itinerary of a group tour to somewhere you've never been before. If you have a well-thought-out plan, and you follow it, then your online boutique has a better chance of success.

Having a business plan isn't just for you. If you seek funding from loans or investors, they'll want to see your business plan before they give you money.

A detailed business plan will literally give you a "to-do list" the minute you are ready to get started.

What do you need in a business plan for an online boutique?

  1. A company overview and executive summary:
    • What is your online boutique business?
    • Why are you opening an online clothing boutique?
    • What will your online fashion boutique sell?
  2. An analysis of the market for your boutique:
    • What is the current market for boutique items sold online?
    • Who is your target audience, demographic, and why should they buy from you?
    • What makes your online boutique different from other boutiques?
    • How will you position yourself as a unique fashion business?
  3. A solid financial plan and reasonable revenue and profit projections:
    • How are you planning to earn your money specifically?
    • What do you anticipate your costs will be to get started?
    • Where will you get funding?
    • What is a realistic estimate of your revenue in the first 6 months to a year? What about in 5 years?

How much money does it take to start an online boutique?

Starting an online boutique can't be done for free. Therefore, you need to create financial projections for startup costs and initial operating costs.

How much does it cost to start your own online clothing store?

Compared to traditional brick-and-mortar retail boutiques, an online clothing boutique has lower startup costs. In fact, you could get started with under one thousand dollars. The crucial question is, do you want to?

In order for your boutique to succeed, it helps to have some backup spending money just in case. Most new businesses find that expenses crop up they might not have anticipated.

Costs to consider when starting an online boutique:

  • Website: You can't get a domain and build a website for free. At the very least, you will have to pay for your domain name, web hosting, an ecommerce software platform, merchant services, and more to get your website ready for visitors.
  • Inventory: You need to have something to sell, and that means ordering inventory. Depending on your products and vendors, you may have to make a minimum purchase or have items in stock before you open your business.
  • Shipping: Shipping is a huge piece of your new online boutique. Vendors can ship products to you or dropship to the customer. To achieve a high customer satisfaction rating, you need top-notch shipping. Finding the right partner(s) for shipping is essential to your boutique's success.
  • Marketing: How are shoppers going to find your new boutique? You have to invest in marketing and advertising to reach out to your preferred audience. There are numerous ways to market and promote your online boutique that have minimal costs to get started.
  • Government: You may need to register your company with the state or local government or require a license to operate.

3. Choose Products and Suppliers

Most boutiques sell apparel and accessories, but that leaves a huge range of products you can sell. Before you open your doors, it's best to do thorough research and find a niche with products that your customers will love. Before making your choice, look to see if there's an open need for these products or a competitor that you can outsell.

Once you've decided on a niche and products, then you're ready to compare suppliers to see which ones are the best for your market. Remember to find a backup for when your favorite supplier is out of stock.

Researching suppliers for each product you have is crucial, so you can maintain competitive profit margins and delivery times. Some online boutique owners find that they can save time and money dealing directly with the manufacturers instead of wholesalers when pricing their products.

4. Selecting an ecommerce platform

The next step in starting an online boutique is to select the right ecommerce platform. This is another research project to determine your options. Costs, capabilities, and user friendliness are all important factors.

5. Getting started on a social media platform or an existing marketplace

If you're not ready to establish a website yet, but want to test the waters for your boutique concept, you can start your boutique on either an existing marketplace like Etsy or Amazon or on a social media platform like Facebook. Using these platforms to start out has minimal costs with access to a wider number of potential customers. For example, with handmade items, Etsy is a good place to start.

6. Set up your new online clothing boutique

As you set up your store and store policies, you should consider the following:

  • Store design - Find a design that fits your style, is mobile-responsive, and is easy to navigate.
  • Branding - Your brand is a key factor in how the customer will see you and your personality.
  • Product listings - The goal of product listings is to appeal to customers and give them what they need in order to buy. This includes images, descriptions, product details, categories, and SEO.
  • Shopping cart - Make it easy for customers to add to a shopping cart, then go back and shop or complete the purchase.
  • Checking out - Your checkout process should be streamlined and offer options for shipping and payment processing.

7. Get an EIN and register your clothing boutique

If your state requires that you register your business, then do so before you open. You should also apply with the IRS for an EIN or business tax number. Using an EIN helps keep your business accounting separate from your personal taxes.

8. Obtain required business permits or licenses

Consult with your local business bureau or city hall as to any permits or licenses you need for starting your online boutique. These requirements vary from state to state, and sometimes local governments.

9. Get a business bank account and credit card

To be organized and keep your business financials separate from your personal accounting, you should set up a business bank account and credit card. Choose an account that is the most cost-effective, but includes all the features that will benefit your business. A business credit card will help you sort through purchases when accounting and at tax time.

10. Get funding for your boutique

Knowing where your funding comes from is important before you start this process. However, some sources won't give you funds until you've completed the business setup process. Funding sources can include:

  • Line of credit: Credit to draw on for business expenses with charges only on the money you use.
  • Startup loan: SBA loans, small business grants, and some business credit cards are all possibilities here.
  • Purchase order financing: Financing from the vendor to stretch out payment until you receive payment from your customer.

11. Marketing your online boutique

Marketing methods vary depending on your target audience. You should create a marketing system that will send customers your way. Marketing automation is a good way to maximize your reach.

What it takes to have a successful online boutique

Building a successful online boutique takes more than just walking through the steps. You need to be able to get steady sales and stay profitable even within a variable economy. A lot of your success depends on you, your research, marketing, and time management.

Drive and passion

Do you have what it takes to get in the trenches to keep your boutique running smoothly?

Networking

Old-fashioned networking is still a valuable way to promote your business. There are lots of networking opportunities online, for example, LinkedIn, and local or regional shows which you can attend in person.

Digital marketing

Finding the right customers is something that digital marketing can do well. Research the types of digital marketing that will benefit your business the most.

Time management

Getting things accomplished is the name of the game. Can you do it all alone or is it time to hire help?

Confidence

If you know that your online boutique fits a niche need in the market, then your confidence in success will keep you going as your business grows.

What to avoid when starting a boutique website

While there are lots of dos when starting an online boutique, there are also some important don'ts.

  • Don't create a carbon copy of another boutique. Having a unique boutique is the best plan for success.
  • Don't use stock photos. Create your own images to promote your products so you don't look like the next boutique.
  • Don't price too low. Pricing too low doesn't net you enough profit for a sustainable income.
  • Avoid thinking it will be easy. An online boutique takes a lot of work to succeed. There is no magic ingredient to achieve success.

Create a beautiful website with Mailchimp

If you have done your research and are ready to get your online clothing boutique started with a website, set it up with a Mailchimp website and ecommerce store. You can get started and launch it for free, using Mailchimp's guides and 24/7 email support.

Share This Article