As technology continues to transform how we live, work and play, the fashion industry is one of the sectors that have been disrupted and radically revolutionised by technology. There are various factors fuelling the growth and the burgeoning of the clothing ecommerce sector and creating opportunities for entrepreneurs:
- The convenience with which shoppers but things online
- The ability to browse through a wide range of products without leaving your home
- Competitive pricing from online retailers who are just a click away from each other
- etc
The Rise of Ecommerce in the Clothing Industry
Source: GlobalData
According to GlobalData, the global online apparel market had a market value of $465.8 billion in 2020. The industry has been on a consistent growth trajectory with a Compound Annual Growth Rate (CAGR) of 11%.
Global online apparel sales are also projected to breach the $1 trillion mark by 2025 according to Forbes.
The Lucrative Opportunity of Starting an Ecommerce Clothing Business
You can run an eCommerce clothing business without any owned inventory, that is if you go the drop shipping route. Also, the capital cost it takes to start an ecommerce clothing business is a fraction of what it would cost you to start a traditional brick and mortar clothing retail. This positions ecommerce clothing as a lower barrier to the sector.
In this guide we will give you the comprehensive step by step breakdown of what it takes to start an ecommerce clothing business.
Starting an Online Clothing Business from Home
By leveraging solid ecommerce platforms like Shopify, BigCommerce, Squarespace you can start an ecommerce clothing business from home.
These platforms provide all you need to build an online store: user friendly online store builder interfaces, professional and highly customisable themes, integrations with third parties to extend your online store functionalities, payment gateway processing off the shelf, etc.
With these platforms you can set up a visually appealing online clothing store in minutes.
Market Research and Niche Identification
There is no doubt that the ecommerce clothing sector is a booming sector and as such the sector is cut throat competition.
It becomes essential for entrepreneurs seeking to enter this space to do due diligence in conducting rigorous market research to identify their angle and niche that will set them apart from the rest.
Understanding the Target Audience and Their Preferences
A thorough market research will reveal to you what successful brands are doing right. The exercise will also enable you to identify gaps in the market vis a vis trends in the industry.
Analysing the Competition and Carving Out Your Position
Competition analysis is an important aspect of not only identifying your niche and gap but for also quantifying the profitability of your business idea.
Getting a good sense of what exists in the market enables you to map out what the gaps are, how big those gaps are and whether or not these gaps have sufficient interest to warrant your time, efforts and investment .
Start by defining your target audience. Consider factors such as demographics (age, gender, location), psychographics (interests, lifestyle), and purchasing behavior. Conduct surveys, analyze market reports, and leverage online tools to gather insights into consumer preferences and trends.
Example:
A few examples come to mind.
Eco-friendly Ecommerce Clothing Niche Ideas
If you are have a passion for a clothing ecommerce related to the sustainability and eco-friendly interests you can consider ideas such as:
- Organic Cotton Clothing Boutique: A curated online clothing outfit specialising in clothing made from organic cotton, without the use of pesticides and chemicals that are harmful to the environment – this way you will be promoting environmentally friendly and ethical fashion.
- Vegan Fashion Shop: If you have strong beliefs in animal welfare and vegan lifestyles then such a concept will help you focus on selling apparels that are free from animal products and therefore contributing to the cruelty-free and sustainable fashion.
- Upcycled Fashion Store: With this concept you can focus on selling clothes only made from up-cycled materials. This involves reimagining discarded materials and transforming these into unique and sleek fashion pieces.
Other ideas you can consider are: Fair Trade Fashion Boutique (focusing on clothing items sources from fair trade producers), Sustainable Activewear Shop (a nichey store laser-focused on eco-friendly activewear made from materials such as bamboo, polyester or Tencel, etc), Zero waste fashion store, etc.
The above are some examples of niching down in one specific area of interest: eco-friendly and sustainability category in this case. You can implement the same approach to any other area of interest that you want to zero in on.
Emerging Sport Wear Niche Ideas for an Ecommerce Clothing Business
The same principles would apply for example in the sportswear category. Some of the emerging relatively low competition online sportswear ecommerce niches include:
- Athleisure Wear (athletic wear combined with casual fashion)
- High-Performance Compression Wear (clothing optimising to enhance blood circulation and performance)
- CrossFit Apparel,
- Surf and Swimwear
- Team Sports Uniforms
- Plus-Size Activewear
- Virtual Fitness Apparel,
- etc
If you do this exercise across various areas of interests, categories and subcategories, will ultimately find a gap (a niche) that you can plug.
Once you have a clearly defined target audience, it becomes easy to map out the needs and preferences of your prospective customers (market segment).
Creating a Business Plan
The next crucial step in your quest to start an online clothing business is to create a business plan. The business plan is not only essential for securing funding, a solid business plan helps to put all ideas and plans into a practical perspective.
Even if your venture is self-funded, creating a comprehensive business plan enables you to be realistic about your business intentions.
The business plan should clearly articulate your business concept (model), goals, operational strategy, marketing strategy, financial plans and projections.
Defining Your Brand Identity and Mission
Defining your brand identity means being intentional about the brand name, logo, colour scheme, aesthetics and the voice that your brand will adopt in the business landscape. The mission, vision and values of your brand must be clear as they inform how your brand will be received by the target market.
Setting Clear Business Goals and Objectives
Remember that old acronym, SMART? Yes it still applies to setting business goals and objectives. You need to set specific, measurable, attainable, relevant, and time-bound (SMART) goals for your ecommerce clothing business.
Developing a Detailed Financial Plan and Budget
You then need to move to creating a comprehensive financial plan that includes projected costs, revenue and profits.
Pay attention to the costs of your start up. Deal with questions such as: will you set up your own stand–alone ecommerce website or you will leverage solid ecommerce platforms like Shopify and BigCommerce to build an online store? There are varied cost implications for each option.
Unless you are going the drop shipping route, Sourcing the clothing inventory for your online store will be your biggest cost here. Also deal with: what marketing and advertising strategies will you employ, how much will these cost?
Do the same for packaging and shipping as well as other operational expenses.
A solid business plan will enable you to outline how financial resources will be allocated efficiently across the different concerns of your business to ensure financial sustainability.
Try your best to be realistic in your projections and factor in some risks and uncertainties that characterize a new venture in the clothing sector.
Securing Funding for an eCommerce Clothing Business
Getting funding is the next important part of the workflow in starting an ecommerce clothing business. If you have developed a comprehensive and realistic business plan, you are in good shape to approach appropriate funders and investors.
Funding Databases and Websites for an eCommerce Clothing Business
Below are some of the funding databases you can explore:
- fashioninnovation.co.uk/funding-database: This must be amongst your first options in exploring funding opportunities for an ecommerce venture. The company provides a funding database curated for the fashion and retail businesses. On the website you can find funding opportunities, grants as well as investors in the fashion industry.
- sba.gov – The Small Business Administration (SBA) entity avails loans and grants suited for the e-commerce clothing businesses. The platform also publishes funding for new and small businesses.
- crunchbase.com – The platform publishes lists of funders and investors, start-up guides and industry trends/reports.
- pitchbook.com – This website publishes a big database of private market data, venture capital funding opportunities, private equity as well as merger and acquisition deals.
- angel.co – AngelList does a great job of connecting start-ups with investors. The platform also facilitates access to an expansive network of angel investors and venture capitalists.
- cbinsights.com – Mine this website for data on funding opportunities and how-to guides, market intelligence and lists of investors as well as emerging industries worldwide.
Additional funding databases and websites for clothing businesses:
Do your own research as well and identify such kind of platforms and funders in your area. Also explore crowdfunding options such as kickstarter.com and indiegogo.com.
These platforms enable entrepreneurs to raise funds from the public for their business ideas. These platforms have been useful to many fashion and clothing brands who obtained funding from these to start their ecommerce ventures.
Sourcing Suppliers and Inventory
In order to build a solid and thriving ecommerce clothing business, you need to secure steady and reliable supplies of high quality and diverse inventory that satisfies the needs and preferences of your market.
Exploring Sourcing Options: Manufacturers, Wholesalers, and Drop shipping
There are three main approaches to sourcing inventory for your ecommerce clothing store:
- Work Directly with clothing manufactures: In this case, you work directly with clothing manufacturing brands and source clothes designed specifically to meet the needs and preferences of your market. This option gives you much more control over the production process and as such you can easily source custom designs this way.
- Work with clothing wholesalers: This is a great option for working with clothing designs and variations already available in the market. Working closely with wholesalers will give access to a wide inventory to select and curate pieces that match your niche and the unique and diverse preferences of your audience.
- Drop shipping: This is the best option if you do not want to be involved in the inventory production as well as the shipments and logistics workflows. With drop shipping you simply display and sell curated products for your suppliers and focus on marketing. When a sale is made on your ecommerce platform, the supplier handles the shipping and the order fulfilment. All this works in a seamless and well-integrated manner.
Drop Shipping
Evaluating the Quality and Reliability of Suppliers
In sourcing inventory you need to pay particular attention to the quality of your products.
Keep an eye on the quality of the fabric, any damages, tear and wear, etc. Make sure you only work with suppliers with a track record of quality products and have positive reviews.
What also helps is to make sure that you request physical product samples so that you get a first-hand touch, feel and look of the products you intend to stock.
Other factors to consider include lead times, minimum order quantities, shipping options and return options.
Once you settle for a supplier, it is crucial to establish clear and efficient communication lines to facilitate a smooth and hassle-free business relationship. It is also helpful to build relations with your suppliers. This will create prospects to get better pricing, get exclusive offers and receive priority treatment.
Choosing the Right Ecommerce Platform
A secure, responsive, visually appealing online store is the backbone of an ecommerce clothing business. Setting up your own stand-alone online shopping website is another option, however leveraging the robust features and functionalities of mature and tried and tested ecommerce platforms such as Shopify and BigCommerce is a better route.
Setting up your own website may seem cheaper but you will ultimately have to pay for the features and integrations you need to sustain an stable ecommerce business.
If you also consider the ongoing maintenance required, it turns out better to set up our online store on a reputable ecommerce platform that offers all the features and the maintenance you need for an affordable monthly premium.
Top 3 eCommerce Platforms for a Clothing Business
Shopify is a clear leader in ecommerce based on market share and features. The platform tops the charts for its user-friendly and intuitive interface and the expansive app ecosystem that enables you to extend the features/functionalities of your online store. Shopify is great for beginners as well as ecommerce pros. With its vast range of highly customisable templates, solid inventory management tools you can build a high end online clothing store in minutes.
BigCommerce is another emerging contender in ecommerce platforms. The platform is ideal for growing businesses that are looking to scale their ecommerce ventures with in-built SEO and advanced marketing tools and features.
3. Squarespace
Squarespace offers stunning and highly customisable templates as well as user friendly drag-and-drop editor. The platform enables entrepreneurs without coding and design expertise to build high end and visually appealing websites.
Selecting a Domain Name and Hosting Provider
You need to connect your online clothing store (created in the ecommerce platforms like Shopify) to your domain. You then need to come up with an (available) domain name, that captures your brand identity and vision. Come up with a brandable name instead of a descriptive domain name.
“Nike” is a good example of a brandable name instead of “ecofriendlyclothing.com” for example. Keep your domain name short and memorable. Anything longer, with dashes,etc introduces risks of misspellings and general apathy to type out your domain (website address) to access your website.
We recommend Bluehost for domain registration.
For as little as $9.95 you can get a full domain hosting service. The plan also includes 1 free domain registration meaning that for 49.95 per month you get 1 free domain registered plus on going domain hosting.
Designing an Attractive and User-Friendly Website Layout
With the basics in place and your online store connected to your domain name, you need to start crafting a high end and visually appealing online store. Platforms like Shopify make this process a breeze. Choose a theme that matches your brand and color scheme.
Make you use high quality images for your product displays. Unless your supplier has quality images for the merchandise, you may need to invest a bit into professional photography for this. Ensure branding presence across your online store.
User Friendly and Browsable Product Categories (catalogue)
One huge advantage of an online store (as opposed to a physical brick and mortar store) is that it enables customers to browse through a wide range of products. However, this will not be the case if you do not set up clear product navigation menus and search features..
Your products catalogue must be organised in a simple navigable and searchable structure. Shoppers must be able to explore your product range by clothing type, size, colours, style, gender, price, etc. Shoppers must also be able to drill down to the very granular details and images of each product. Implement relevant call to actions (CTAs) like, “buy now”, etc.
Also make sure you write compelling and comprehensive product descriptions. In doing this avoid over selling and promising shoppers what is beyond the realistic features of your products.
Setting Up Payment and Shipping
You then need to find a reliable shipping partner with a wide network and a track record of efficiency. Go for tried and tested brands that have the often elusive balance of pricing, vast coverage network and efficiency. Take some time to research good and reliable shipping partners in your area.
Names such as USPS, UPS, DHL, FedEx come to mind. What is key here is to be clear about your average package weight, dimensions and destinations so you can calculate and project shipping costs. Do this across the shipping options you have until you settle for a good balance of pricing and quality service, and other key factors.
You can also offer tiered shipping options for your customers such as standard shipping, expedited shipping, or international shipping. Implement clear shipping policies and workflows that entrench trust and credibility for your brand.
Implementing Ecommerce Marketing Strategies
Now that you have built a solid ecommerce clothing store, fully integrated for online payments and shipping, you then need to market your business. Build an omni channel marketing strategy based on your budget and target market.
Consider running social media campaigns. Shopify for example, is big on social commerce. With Shopify social media integrations you can start selling your products on Instagram and Facebook, etc. Content Marketing, blogging, email marketing and influence collaborations are some of the great ideas that you should consider.
Building a marketing strategy should go beyond creating basic social media pages to deploying powerful social media monitoring and listening tools to gauge consumer sentiment and boost engagement and take your social media marketing to the next curve.
The Shopify online store builder also enables you to define the meta tags and titles of online store and product pages. This ensures that your clothing ecommerce store is Search Engine Optimised off the bat, and therefore positions your store to receive organic traffic from Google and other search engines.
The world of ecommerce is susceptible to diverse forms of online scams. It is therefore important to be intentional about building trust and loyalty around your brand by:
- Offering high quality customer service
- Implementing clear return and exchange policies
- Collecting and utilising customer feedback
- Encouraging testimonials and customer reviews
Also pay particular attention to regulatory requirements that govern this nature of business in your area. Register a suitable juristic entity for your business and make sure you obtain all the necessary licenses and permits. Also take the necessary steps to comply with customs requirements for your international shipping needs.
Also make sure your business complies with consumer protection and data privacy regulations.
Now it’s time to Launch, Grow and Scale
You can create a pre-launch campaign and set up a coming soon page to sensitive your target market. Make use of exclusive offers for early birds, social media teasers, contests and giveaways. You should also consider going into influencer collaborations to drum up awareness and interest for your new brand.
As your business starts running, leverage analytics to make informed decisions about what‘s working and what’s not working. Make use of tools like Google Analytics to analyse traffic and traction.
Also make use of inventory tracking tools that your ecommerce platform provides. The idea is to stay ahead of the curve and make sure you have sufficient supplies of your popular products and you are also in position to implement mechanisms to bump up sales for slow moving products.
Recap of Key Steps to Start an Ecommerce Clothing Business
1. Market Research and Niche Identification: Mapping out your target audience, your niche and niching down.
2. Creating a Business Plan: Defining clear business goals and objectives, defining your brand identity, outlining comprehensive and realistic financial projections (costs, revenue and profit).
3. Sourcing Suppliers and Inventory: Exploring three main options: working with manufacturers or wholesalers, or going the drop shipping route to cut out shipping and order fulfilment out of your business model.
4. Building Your Ecommerce Website: Choosing the right ecommerce platform over creating a stand-alone ecommerce website, registering a domain name and connecting it to your online store and then creating a professional and user-friendly website layout.
5. Product Catalog and Photography: Creating a well-organized, browsable and searchable product catalog and navigation. Use of high quality product display images.
6. Setting Up Payment and Shipping: Streamlining your integrated secure payment gateways options and the outlining the shipping methods, workflows and rates.
7. Implementing Ecommerce Marketing Strategies: Taking social media marketing to the next curve by utilising powerful social media listening and monitoring tools. Leveraging social commerce and user generated content to boost sales on social platforms.
8. Building Customer Trust and Loyalty: Implementing clear customer service practices including transparent return workflows, feedback and review mechanisms.
9. Launching and Promoting Your Ecommerce Clothing Business: Creating a pre-launch and launch campaigns for your store .
10. Managing Operations and Scaling: Keeping tabs on sales and inventory data. Mapping out what’s working and what’s not working to pivot, improve and adapt so as to grow and scale.
11. Legal and Regulatory Considerations: Registering a suitable juristic entity for your business, obtaining necessary permits and licenses, considering insurance cover, consumer protection and data privacy regulations as well as intellectual property rights.
Final Thoughts
Running a successful ecommerce clothing business is a process and not an event. There will be thrills and challenges. The key is to keep moving as success will not come overnight. Be willing to learn, unlearn and embrace opportunities and challenges to pivot and adapt where needs be.
Surround yourself with like-minded people, mentors and networks, patronise blogs like eCommerceProLab for relevant insights and perspective.
Beyond the business bottom-line, fashion is a great way to express individuality and make a statement. You will have fun and get fulfillment if you do this the right away.
Now is the time to put the knowledge you gained in this guide into action. The possibilities are endless, the sky is not even the limit.
Wishing you all the best in your endeavour!
