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Updated Feb 14, 2024

How to Start a Clothing Store

Dave Thomas, Community Member

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Anyone who steps into a mall in the middle of a large city may feel that the apparel industry is crowded. The truth is, there is always room for another clothing store, particularly if you offer consumers something unique and new to your area. 

With e-commerce booming, setting up an online store is also a viable option to make your dreams of running a clothing business come true. However, success in the retail clothing industry requires motivation, hard work and a solid action plan.

How to start a clothing store

Follow these 11 steps to turn your retail business idea into a successful e-commerce or brick-and-mortar clothing store.

1. Find a business niche for your clothing store.

Figuring out your niche is an essential process of starting any business. You want to provide a product or service that connects with your target audience’s wants and needs. 

For example, what type of clothing will you sell in your store? Evaluate whether your market will respond to a new men’s, women’s or children’s clothing store, or a combination of these offerings. 

Then you can choose a specialty, such as vintage clothing for women, boutique items, maternity clothing, sportswear or accessories. You can even create your own clothing brand as a fashion designer.

2. Identify the target audience for your clothing store.

Identifying your target audience goes hand in hand with finding your business niche. You must identify who will purchase your clothes. 

What type of potential customer are you targeting, and what clothing would they buy? Do you want to target those looking for a high-end fashion brand, or to those looking for more affordable clothing? 

Identifying your target audience will help you make these choices and narrow your brand identity. 

TipBottom line

To pinpoint your brand’s target audience, build customer personas that include demographics like age, income level, concerns, where they spend time online and what kind of content they like.

3. Perform a competitive analysis for your clothing store.

A competitive analysis assesses your current or potential business competitors. To perform a competitive analysis, you must identify the other companies in your market that currently offer a similar product and then analyze how their products are positioned. 

The results of a competitive analysis help you learn about current market trends, product and service pricing, market saturation, industry best practices, market gaps, and business opportunities. Although a competitive analysis is necessary when you start a business, you should also routinely perform them throughout your company’s lifecycle to keep your business competitive.

4. Write a business plan for your clothing store.

Although it may not always be legally required, don’t skip writing a business plan. Every owner should create a business plan for their company. It serves as the blueprint of your business and helps you see the complete picture of your company’s mission, vision and feasibility.

Did You Know?Did you know

To encapsulate your company’s mission, write a mission statement summarizing your business’s purpose, values and objectives.

5. File a legal structure for your clothing store.

Look to the U.S. Small Business Administration (SBA)’s website to determine the most appropriate legal structure for your business You can incorporate your business online or work with a lawyer to ensure you take all the necessary steps. 

An expert can help you obtain a tax ID number and advise you on the business licenses you need. You will also want to obtain the appropriate business insurance.

6. Secure financing for your clothing store.

The costs of starting an online business are often reasonable. However, starting a clothing store — online or offline — can be pricey. In fashion, you must spend money to make money. 

You’ll likely need to choose a business loan to fund your business. Consider working in the fashion industry or at a clothing store to learn the ropes of the industry and save money to fund your company.

Don’t underestimate the financial capital you’ll need to get started. You must purchase merchandise, pay employees, buy marketing materials, and furnish the store with fixtures and lighting, to name just a few expenses.

FYIDid you know

Check out our reviews of the best business loans for small businesses to compare lenders, borrowing costs, loan terms and collateral needs.

7. Find a storefront for your clothing store.

If you’re starting a brick-and-mortar clothing store, location is one of your most vital decisions. You must commit to a storefront in a specific town and state and consider the neighborhoods and streets that will bring foot traffic and a large consumer base interested in (and able to afford) your merchandise.

Once you’ve narrowed your location options, you must find the right building. Consider storefronts in strip malls and standalone locations, or look into mall leases if they suit your type of clothing store. 

You must keep inventory numbers in mind and consider the following questions:

  • How much square footage will you need? 
  • What can you afford? 
  • What will it cost to fill your store with merchandise?

8. Set up your online clothing store.

Whether or not you’re opening a brick-and-mortar store, you will also want to create an online clothing store to sell your items. If you use e-commerce exclusively to sell your merchandise, getting this step right is even more imperative.

You can build an e-commerce website yourself or hire someone to handle the web design process. Many startups and small businesses turn to the best website builders and design services for help developing, building and maintaining e-commerce websites. It’s crucial to find a platform that’s affordable and easy to use. 

Some companies offer retail-specific web design templates, which can simplify the e-commerce store-building process. Look for a solution that supports your current product quantity and can scale with your business as you grow.

TipBottom line

Ensure you create a mobile-friendly website so it’s easy for customers to view, use and navigate on a smartphone or tablet.

9. Purchase and price your clothing store inventory.

You must purchase merchandise from designers or manufacturers to fill your clothing store. Consider the following tips: 

  • Visit trade shows to connect with vendors. A trade show is an excellent place to buy wholesale merchandise for your clothing company. You can connect with suppliers at trade shows and see their product offerings firsthand.
  • Carefully consider inventory types and amounts. When ordering merchandise, consider the amount of inventory you’ll need when opening your store, plus the inventory you’ll need to replace the items that sell regularly. Don’t forget seasonal trends and new styles and brands that become popular from pop culture influences. Include a diverse mix of clothing while understanding that you can’t necessarily satisfy everyone who walks through your door.
  • Conduct research to price products properly. Research the best way to set prices based on your merchandise. You must determine your markup amount, understand effective pricing techniques for your store type, and know how to discount merchandise effectively.

10. Establish policies for your clothing store.

Anticipate problems or questions concerning employees, store hours, customer service, loss prevention, damages, returns and other day-to-day operations for your clothing store. Consider best practices from other established stores and distribute materials explaining these procedures to all new employees (if you hire any).

11. Market your clothing store.

When you’re ready to open your doors (physically or virtually), share the news with everyone, including friends, family and social media connections. Create a marketing plan focusing on your store’s unique aspects and what your target customers will gain from shopping with you. 

Consider the following marketing tips to get started: 

  • Host an open house. Hold an open house with special discounts, giveaways and other perks. Put your best foot forward, and emphasize your excellent customer service to build the best brand image possible.
  • Create social media marketing campaigns. Take advantage of the power of social media marketing. Build your branding and marketing strategy around platforms like Facebook, Instagram, Twitter and YouTube to stay connected to your target market. When posting on social media, use the right image strategies for each platform.
  • Consider physical advertising. You may want to incorporate physical advertising into your marketing plan to improve your local marketing strategy. For example, advertise your clothing store in local newspapers, lifestyle magazines,or radio stations.
Did You Know?Did you know

Keep the momentum going by offering promo codes and holiday promotions and sponsoring fashion shows, sample sales, trunk shows, and other events.

Pros and cons of starting a clothing store

Like any business, starting a clothing store can bring enormous benefits and significant challenges. 

The pros of starting a clothing store include the following: 

  • A clothing store is easy to scale. Successful clothing stores can be easily scaled when you’re ready to open new locations.
  • A clothing store is marketable. If your clothing store has inventory that carries your logo, you can gain free marketing from customers wearing your merchandise. Word-of-mouth marketing can benefit your store if you carry affordable, unique and size-inclusive fashion.
  • A clothing store has fast product turnover. Although you may find it challenging to switch out inventory as seasons change, you always get a new chance to succeed. For example, if your spring and summer collections didn’t sell well, your fall and winter inventory could produce enough profit to compensate for earlier lost sales.
  • You can maximize clothing store sales. Every time you have a sale, you have an opportunity to increase your revenue. Once you have a handle on your average sales volume, you can schedule sales to solve cash flow problems.

The cons of starting a clothing store include the following: 

  • A clothing store must follow the trends. Clothing trends last six months maximum. You must consistently liquidate your inventory as soon as it comes in to make the most profit. Excess inventory can cut into profits and is time-consuming to liquidate.
  • A clothing store may have high employee turnover. Employees working in retail fashion stores are usually at the start of their careers and may seek better opportunities. You can quickly lose workers to other industries or competitors. Constantly training new employees can be mentally and physically draining for management.
  • A clothing store’s location can make or break the business. Choosing an excellent physical store location is crucial to the success of your clothing store. If there is too little foot traffic in an undesirable area of town, or the store doesn’t attract the right audience, you will have difficulty reaching your sales goals.

Julie Thompson and Skye Schooley contributed to this article.

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