How Much Inventory Should I Start With for an Online Boutique?

The world of ecommerce is bustling. An estimated 2.14 billion people worldwide purchased goods online globally (Statista, 2017), In addition, global ecommerce sales are projected to hit the $4.891 trillion mark in 2024.

The apparels and online clothing boutiques sector is particularly booming with more customers shifting from conventional brick and mortar shopping patterns to shopping online.

Online fashion boutiques are clearly a lucrative sector and the reason why many entrepreneurs are venturing into the virtual world to claim their stake in this big market.

How Much Inventory Should I Start With for an Online Boutique?

You don’t want to over stock when you are just starting out and you have no data on how much inventory you need in a given month or season. At the same time you don’t want to under stock and short change your new customers if the market has sufficient appetite for your products.

This is where strategic inventory management comes in. Strategic inventory management is a critical aspect of running a successful online boutique.

Avoid Overstocking and Understocking

If you can strike the right balance between avoiding overstocking and understocking you will realize a positive impact on sales, customer satisfaction and overall success of your online boutique.

So, how much inventory should you start with for your online boutique?

Many online fashion retail experts suggest that to avoid taking unwarranted financial risks in over stocking for a new boutique, you can kick off with one case pack for between 2 and 5 product lines that you want to sell.

What is a case pack? A case pack is a package of clothing including a number of sizes. This applies to merchandise between suppliers and retailers. Another term related to this is “pre-pack”.

A pre-pack is a package or a collection of different sizes of a particular item. This form of packaging applies mostly in cases where suppliers want to avoid wholesaling eaches.

How much inventory should I have at launch?

Having outlined the inventory scenario for a typical online boutique, it is important to understand that the amount of inventory your boutique needs to launch with will ultimately depend on the target market, anticipated sales volume as outlined from your own market research and business planning as well as your product range.

Another important factor is your launch budget. Consider all these factors to establish the reasonable quantities for your launch inventory quantities.

The safe principle to work with is to have a diverse assortment of products that represent your brand and meet the preferences of your target customers.

How many pieces should you start with for a boutique?

The number of pieces you should start with will also depend on various factors such as your target market, the size of your boutique and the range of products that you want to sell. Also make use of information gathered through your market research to glean market demand for your products.

You can aim for a curated selection of between 50 and 100 pieces (of courses depending on your budget). This is a good balance of meeting customer needs while managing your inventory investment.

How much capital is needed to start an online clothing store?

While an online boutique is a non capital intensive business model, you will still need some capital to start your online boutique business.

How much capital you want to invest in your initial inventory must not be a thumb suck. It must be informed by your comprehensive business plan. The reasons for this is that there are many factors that should inform this aspect of your launch such as:

  • Target market
  • The range of your product line
  • Your Budget
  • Financial projections
  • Ecommerce platform fees
  • Packaging and Shipping

It is also helpful to research industry benchmarks and explore some success stories in your niche to see what some of the best practices are in launching a business model of this nature.

How to Optimize Inventory Management for an Online Boutique

Starting a new venture online is always an exciting exercise especially when you crunch numbers and explore different profitability scenarios that can become a reality for you. That said, there is a lot that goes into starting and running a success online boutique. In the next section I will give you a short guide on how to optimize inventory management for your online boutique.

Set Realistic Sales and Revenue Goals

Define your sales and revenue targets

In running a boutique business, there is what we imagine and then there is reality. Confronting reality requires setting data and research informed, realistic sales and revenue goals. The goals will help you to stay on track in putting together all the pieces of the puzzle to make this a success.

Determine your monthly or quarterly sales goals

What are the monthly and quarterly targets that you are working towards? In defining that, also deal with the question of what pricing strategies will you adopt for your boutique. For this you need to analyze industry reports to map out trends and arrive at realistic sales and revenue projections.

You also need to factor in your operating costs such as monthly ecommerce platform fees or standalone website development and maintenance fees, marketing expenses, shipment and order fulfillment services. This will give you a more realistic picture of what targets you need to be aiming at to achieve your project profit margins.

Calculating the Inventory Turnover Ratio

Part of this exercise is calculating inventory turnover ratio. To do this you need two variables: 1) The Cost of Goods Sold (COGS), 2) the average turn over value.

Formula for calculating the inventory turnover ratio

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Calculate the Cost of Goods Sold (COGS)

COGS pertains to costs incurred in producing or procuring the goods that are sold over a defined period of time. Typical costs here are the costs of raw materials and labor.

For an online boutique you can simply factor in the cost of procuring the inventory and getting to your customers.

Determine the Average Inventory Value

To get the average inventory you add the value of the beginning inventory at a given time frame and the value of the end inventory at that time frame. You can then divide the sum by 2. This will give you the average inventory value over your defined time period.

When you divide the COGS by the average inventory value what you get is the inventory turnover ratio.

What does the inventory turnover ratio mean? A higher inventory turnover figure suggests that the company is selling its products more quickly This figure must be taken in the context of other variables such as industry norms and target market.

The whole point of calculating the inventory turnover rate is to arrive at a desired rate of turnover based on your business plan.

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Also consider this post on: How Much Do Online Boutiques Make?

Assess Operational Considerations

Part of your ground work towards starting an online boutique involves assessing operational costs. For this you need to determine where you will source your inventory to establish a steady supply of high quality merchandise that will meet the preference of your customers.

This involves building relations with suppliers and evaluating their product offerings for quality, pricing and delivery leads times. In your due diligence, you can request samples and negotiate favorable terms to establish favorable and mutually beneficial partnerships.

Unless you want to take the drop shopping route where you simply display products on your online store and are not involved in the actual inventory production/ownership and order fulfillment, you need to consider your storage and fulfillment capacity.

Deal with questions such as:

What is your storage capacity? i.e. How many items can you store in your facilities?
Do you have sufficient inventory storage facilities or you may want to consider outsourcing some storage?

What’s the maximum inventory can you store without compromising organization and accessibility?

What is your order fulfillment capacity? i.e. how many orders can you handle simultaneously?

Answering the questions above will help you to avoid problems such as stockouts and enable you to optimize operational efficiency.

Seasonal and Trend Fluctuations

In your online boutique inventory management strategy you need to plan for seasonal and trend variations. The apparels and fashion market is highly volatile and seasonal. People generally buy different types of clothing in different seasons, for example.

You need to align your inventory accordingly. In optimizing your inventory management identify seasonal fluctuations in sales and trends. For this you leverage ongoing data from sales and revenue analytics and industry reports to map out seasonal patterns related to your niche.

For example, the summer season usually drives up demand for swimwear and vacation attire while the holiday season normally drives up demand for clothing suited for gifting and partying.

In optimizing you inventory management framework, there are few critical principles to consider:

  • Balance trend-focused and timeless inventory so that you have a business that thrives all year round and rides the seasonal fluctuations to your advantage.
  • Balance inventory for fashion forward items and that for staples. There are some products that will enjoy transient demand while some will enjoy enduring demand.
  • Address seasonal preferences and demands proactively.

Starting An Online Boutique with the Lean Inventory Approach

When you are starting a business like an online clothing boutique you need to minimize risk as much as possible. The best way to do this from an inventory point of view is to implement a lean inventory approach.

This approach constitutes starting with a smaller inventory and expanding it gradually in line with demand from the market.

You can consider kicking off with curated items to test if your product range is market fit and gauge market appetite for your product range. This allows you to avoid investing into product lines that the market is not interested in, placing you in a position to validate product market fit before scaling up.

As part of your lean inventory approach you can consider taking off with a drop shipping model where you only focus on operating an online store in as far product sales and the entire online checkout process is concerned, while leaving inventory liabilities and shipment logistics to the supplier.

This is an elegant way of mapping what products are best fit for your market and also learning the ropes of running a successful online boutique without taking huge and unwarranted financial risks related to procuring inventory.

Implement Inventory Management Systems

To run a successful online boutique with optimized inventory management you need to everage powerful inventory management software that is integrated with your online store or ecommerce website.

Inventory intelligence software will help to streamline your operations and help maintain control over inventory levels, send alerts for where replenishments are due, etc.

These software enable you to track inventory levels, sales as well as reorder points. High end inventory tracking tools come with automation capabilities such as the automated stock level alerts and purchase order generation.

Robust ecommerce platforms such as Shopify and BigCommerce make inventory management a breeze.

You can still get your stand alone ecommerce website integrated with inventory management platforms and tools of your choice. However, leveraging solid ecommerce platforms turns out to be the best approach in the long run.

It saves you the headache of identifying the appropriate inventory solutions that can be integrated with technologies of your stand alone store, the cost and intricacies of getting a capable developer to implement the integration.

Also, when you factor in what goes into the maintenance of a growing online boutique, it is cheaper and more elegant to take the technical aspects of running an online boutique out of your hands and just focus on growing your business.

Ecommerce platforms like Shopify, offer you high end features and functions off the shelf and at a fraction of a cost.

Benefits of Shopify Inventory Management Tools

Shopify Review

Shopify provides a centralized inventory management module that spans important functions like tracking stock levels, managing product variations as well as updating inventory quantities.

Shopify also offers real time inventory tracking enabling you to keep tabs on the stock levels across your entire product range. This enables you to always ensure a sufficient supply and availability of products.

With Shopify you also have robust inventory reporting and analytics where you can get data on stock turnover rates, sales trends and top performing products based on sales.

The inventory management system offered by Shopify is seamlessly integrated with the entire ecommerce platform and your online store which enables you to synchronize inventory levels across all online sales channels.

Shopify‘s robust inventory management tools are suitable for small businesses just starting out as well as big businesses with large inventories. Shopify’s inventory management capabilities are great for starting, growing and scaling an online clothing boutique.


With a domain name registration and hosting of $9.95 per month from Bluehost and for a $25 monthly shopify plan you can build a high and professional online boutique within minutes.


Overview of what we covered

How Much Inventory Should I Start With for an Online Boutique?
Avoid Overstocking and Understocking
So, how much inventory should you start with for your online boutique?
How much inventory should I have at launch?
How many pieces should you start with for a boutique?
How much capital is needed to start an online clothing store?
How to Optimize Inventory Management for an Online Boutique
Calculating the Inventory Turnover Ratio
Assess Operational Considerations
Seasonal and Trend Fluctuations
Starting An Online Boutique with the Lean Inventory Approach
Implement Inventory Management Systems
Benefits of Shopify Inventory Management Tools

Final Thoughts

Setting up a successful online boutique is not an event but a process. As such, you need to continuously monitor your inventory data against traffic and sales volumes to ensure you have your finger on the pulse of your inventory.

Not only that, you will also be in a position to know which products are performing well, and therefore need more investment, and which ones are performing poorly so that you can implement mechanisms to boost sales for these or replace them.
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Your inventory management and optimisation should never be a thumb suck. It should be informed by your business plan, market research,sales and financial projections.

Also, embrace the technological edge of solid ecommerce platforms like Shopify and take your inventory management to the next curve.

Wishing you all the best in this disruptive and competitive world of e-commerce.

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Gugulethu Nyoni

Gugulethu Nyoni is a seasoned ICT entrepreneur, a full-stack developer with a portfolio of proprietary SaaS solutions under his name. His expertise span conceptualizing and developing digital solutions, including bespoke eCommerce applications. Gugu is also a proficient eCommerce and Whitehat SEO consultant.