To succeed you need to develop a brand, focus on a niche
and sell at competitive prices. There are a few things to consider such as
product sourcing, marketing, startup capital and ecommerce platform.
The ecommerce store should have a good domain name and
host plan. Others are SEO, traffic generation and conversions. Thinking of
launching an online store there are a few things you need to put in place.
How
to Start an Online Store
Write
a Business Plan
The first step is to write a comprehensive business plan.
The plan should factor manufacturing or wholesale process. Include marketing, web hosting and storage.
Conduct a market analysis to recognize the competition, prices and services
they offer.
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Online
fashion Store Business Plan
- Map out mission and vision statement
- Sourcing the product
- Business structure
- Funding
- Domain name and host planning
- Pricing
- Warehousing/storage
- Marketing and budgeting
Product
Sourcing
As an online fashion store there are many ways to source
your products. You could purchase wholesale from manufacturers home or abroad.
Other alternatives are designing and sewing the fabrics
yourself or outsourcing the production. Another way is buying the stock from
fashion stores in your locality and selling to your online patrons.
- purchase wholesale
- designing and sew
- outsource the production
- buy retail from stores
Stocking
Challenges
Every strategy has its own drawbacks such as import
duties, insurance for imported cloths. Others are marginal price differentiation for cloths sourced from local fashion stores.
It is very important investigating the source and
manufacturing process of outsourced companies. Make sure the cloths are of the
highest standard and quality.
If you decide to manufacture the cloths yourself you need
a credible source of material. Other things include appropriate machinery,
tailors and designs.
Legalities
There are a few legalities based on the country you
operate. Your products maybe subjected to value added tax and you need an EIN.
Others are business liability insurance and registering a business name.
Importers face additional challenges such as custom
duties, origin of cloths and packaging. More include fluctuating exchange
rates, taxes and time management.
Funding
The amount of startup funding you have will dictate the
amount of inventory you stock. Growth is also tied to amount of inventory,
marketing and quality service.
Many small fashion outfits remain the same size after
several years because of lack of funding. Relying on turnover to re-coup stock would
sustain the business but cannot induce significant growth.
To raise funds you could try target savings or borrow
from family and friends.
Build
the Online Store
To build the e-Store you need to buy a good domain name
and host plan. There are many host companies like Godaddy, Bluehost, HostGator
and iPage.
Make sure the site has high definition images of your
products. Include description, prices, about us page, terms and conditions and
a shopping cart.
To build your store you could hire a web designer or
build it yourself. There are many premium templates to use with Wordpress.org
software.
Store
Traffic
The more targeted traffic the likelihood of success of
the enterprise. To generate traffic you could include a blog to your commerce
site.
The best traffic is organic or direct traffic that
converts. Generate traffic through Adwords, Facebook ads and other online advertisement
networks.
Make sure you work within a budget to manage expenses.
Don’t forget to include a phone number and put in place proper customer
service.
How
eCommerce Stores Make Money
ECommerce stores make money through margins. Generally
distributors pay 25% per 1000 units and wholesale the stock at 50%.
The stockiest then sells retail at RRP to end buyer. The
markup is usually twice wholesale costs to arrive at a fair price.
Based on your business structure you could consider the
purchase price, shipping, manufacturing and labor. Fashion retailers make money
from small margins on each item sold.
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