Starting an online clothing business is an attractive opportunity for upcoming merchants to make money, since it is much easier than running a brick-and-mortar store. It also means the startup costs are much lower, because you won’t need to pay rent, utilities, or hire as much staff. But how much does it cost to start an online boutique exactly?
In this article, we will break down every associated cost of starting your own boutique online. In the last part, we will also be tallying up all of the startup costs to give you an approximate idea of how much opening a decent online boutique would cost. Let’s begin by understanding what the associated costs of starting a boutique online really are.
Associated Costs of Starting a Boutique Online
Even reputable resources like Forbes, when discussing the startup costs for an online boutique in their articles, claim that you can launch a brand new store for as little as $2,000. Unfortunately, that is a myth, because it’s impossible to build a long-term successful online brand for only a couple of thousand dollars.
There are eight essential associated costs of starting a boutique online that will give you an approximate idea of how much you should expect to spend. They are:
- 1. Creating a legal entity
- 2. Buying a domain name
- 3. Paying monthly e-commerce platform fee
- 4. Developing the website
- 5. Taking product pictures
- 6. Acquiring merchandise
- 7. Getting packaging supplies
- 8. Marketing costs
We will also briefly touch on what an emergency fund is and why you should consider having it. However, we won’t be tallying it up with the rest, because it’s an individual number that we can’t possibly assess. For now, let’s start with the first associated cost of opening a boutique — creating a legal entity.
#1 Creating a legal entity
Creating a legal entity essentially means registering your business so the state can determine how you will be taxed. The ways to acquire registrations will differ for every country, which means we will be focusing on US guidelines.
You will need to choose your business structure. There are four options:
- Sole proprietorship. The most simple structure in which the business and the owner are the same entity. The incomes and expenses of the business are included in the tax return of the owner. Although this form is inexpensive to maintain, the owner is personally responsible for the debts, liabilities, and other risks.
- Partnership. This form of business structure comprises two or more owners. Similar to a sole proprietorship, partnership owners are held personally liable for any predicaments. Partners are also required to pay self-employment tax.
- Limited liability company (LLC). This form provides personal liability protection to business owners while reducing tax and business requirements. Limited liability essentially protects the owners’ assets from being sold to pay liabilities of the entity.
- Corporation. This form of business structure gives the company a separate legal entity from its owners, making it more expensive to establish and operate. Corporations are required to pay both federal and state taxes, while the shareholders are required to disclose their dividend payments. Corporations come with limited personal liability, offering the owners protection against business-related risks.
For an online boutique startup, the best and most common option would be registering as an LLC. The price for an LLC differs from state to state, but the average cost is approximately $250. Additionally, you must create a banking account and acquire a business permit. However, those steps won’t cost you anything.
#2 Buying a domain name
The domain name is your store’s online address that customers will use to access your website. Luckily, this is the least expensive step of starting your own boutique online since domain names cost only up to $20 per year.
Some of the popular domain registering services are:
By now, you should already have a name for your online boutique, so choose a domain name that matches the name of your brand. In case the name you want is already taken, try to come up with something similar that would describe your store.
#3 Choosing an e-commerce platform
An e-commerce platform is a software you will be using to build your website and sell your products. Of course, you can opt out for a WordPress website with a WooCommerce plugin to add a shopping cart to it. However, we strongly recommend you go for an e-commerce platform specifically, since they are designed to make the customer’s buying journey more logical and efficient.
There are plenty of e-commerce platforms to choose from, but the most popular ones are considered to be Magento and Shopify. They have their own pros and cons, so we highly recommend checking out our beginner tutorials on both Shopify and Magento. With that being said, newcoming entrepreneurs tend to choose Shopify, a SaaS platform, as it has the reputation of being more user-friendly for e-commerce beginners, allowing to launch a store quickly and smoothly.
Magento, on the other hand, is a better option for stores that have many complex features, as it allows for more in-depth changes and third-party implementations. It may take longer to launch an e-commerce boutique on Magento, since the setup requires a certain level of development expertise. Also, Magento lacks hosting, which means you’ll need a technically qualified person to set it up.
So, how much does it cost to start an online boutique on these platforms?
- Basic Shopify costs $32 per month. They also offer other plans with more features for a higher fee, but for an online boutique startup Basic Shopify will suffice.
- Magento Open Source is completely free.The average price for a hosting service is around $10-$20 a month, more extensive plans with additional features are available at a higher price.
#4 Developing the website
Realistically, modern online stores, especially in the fashion industry, cannot be made with a website builder or even worse — default settings. You must understand that your website is your storefront. Customers are simply not going to shop for clothes in a store that looks substandard or outdated.
Many startup owners think they can focus on creating a good website later when they earn some revenue. This is only partially true. The primary task is to start developing a website on an e-commerce platform which meets your current business needs and leaves room for future scaling. A team of e-commerce experts can help you a lot at this stage — they can advise the most relevant platform, handle the technical aspect of building an online boutique startup website, and maintain it in the long run. It is much easier than migrating a finished website to another platform in the near future.
Think of it as an excellent return on investment. Professional developers can help you make informed choices about the platform and the website. They also ensure that your website follows usability and optimization best practices, as well as creating appealing and converting design. This will make your boutique more competitive right away and increase your chances of breaking through in the industry.
Get in Touch With Us and Receive a Quote Today!
Undoubtedly, this is the most expensive aspect of starting your own boutique online. On average, it takes up to 100 hours to develop a basic clothing webstore. Boutique e-commerce development companies usually charge around $50 – $100 per hour. If you’re curious about custom development pricing, we have an in-depth breakdown of custom website development cost.
#5 Taking product pictures
Creative and appealing product photography is a crucial part of launching a successful online boutique startup. Product images, particularly in the fashion industry, is a major decisive factor for customers, since they can’t touch or feel the item before purchasing. Considering that 83% of US smartphone users found product images and photos to be “very” and “extremely” influential.
83% of US smartphone users found product images and photos to be “very” and “extremely” influential.
To give you a better understanding of what you should be aiming for, let’s take a look at an e-commerce boutique that does a great job with their product photos — Frankie Miami. This is a boutique that sells beach-to-street pieces for women. Notice how vibrant the images are, showcasing the details of the product in a creative composition. Notably, Frankie Miami’s website is built on Shopify.
So, how much would it cost to take product pics for an online boutique startup?
Product photography can require anywhere between three to eight hours of work. That may seem like a lot, but in reality most of the time will be taken up by setting up the studio space, lighting, prepping the product, briefing the models if they’re present, and reviewing images as they’re captured. If you want a more creative product shoot, you may even spend days at the studio.
The average hourly rate of a professional photographer is around $170, which means we will put the minimum hours needed in the tally, so you can make your own calculations. You can always choose to take product pictures yourself. With that being said, if you decide to do it yourself, you will require all of the necessary equipment, such as a camera, tripod, studio lights, etc.
#6 Acquiring merchandise
Your products are the backbone of your brand, so choose what you will be selling wisely. In the beginning, you can set your stock budget as little as you want. Just in case the store doesn’t work out and you don’t end up with tons of unsold clothes. Every store will set their own budget, so we will be using the budget of $1,000 to make sure you can add your own in the final tally.
If you’re starting a boutique online using the dropshipping method, you will need to find suppliers. Clothing vendors like Brands Gateway or Wondery are amongst some of the popular dropshipping vendors for online boutiques. However, it’s best to do an in-depth research of multiple clothing vendors to explore the market and choose the most profitable offerings.
The products must be 100% original, otherwise you put your store’s reputation in jeopardy. You also need to find out what kind of fulfillment system they offer and if it’s a good fit for your business. Trying to arrange a meeting with a supplier and traveling to the warehouse to get a tangible sense of the product is a good idea before making a final decision.
#7 Getting packaging supplies
Packaging may seem like a small thing to worry about, but neglecting small details like this can come back to bite you. You can start with simple packaging, Amazon offers all kinds of packaging bundles. Depending on the size of the packaging and the amount of it in the bundle, the price can range between $25 to $500.
Of course, if the cost to start an online boutique is not an issue, you can turn to companies that provide custom-made packaging with individual designs for the store. There are a plethora of such services online, such as Packhelp or Packlane.
While it may not be necessary for a startup, in the long run it’s best to also purchase a shipping label printer. Most of them cost around $250 and can be found on Amazon. This will save you some time in the postal office and make the process of shipping orders more efficient.
#8 Setting a marketing budget
We can’t stress enough how important marketing is for an online boutique startup. You will require getting a lot of impressions online in order to get that initial traffic to your store. Hence, taking a mindful and organized approach to your marketing operations is very important.
There are all kinds of marketing and branding strategies that you will have to learn as you grow. For now, a much more realistic and calculable cost to start an online boutique is social media ads. We see them everywhere and all the time now, which makes them a great tool to draw the attention to your brand new store.
Social media platforms offer a few variations of ads and their cost, so we will be focusing on CPM (Cost-Per-Mille) pricing. CPM is the cost an advertiser pays for one thousand views or impressions of an advertisement. Here’s the cost-per-mille of the most popular social media ads:
- Instagram — $6.70
- Facebook — $12.07
- Youtube — $10-$30
- TikTok — $10
We recommend advertising on all of these platforms to reach as many users as possible. You should also keep in mind the costs of running your social media and email campaigns, as advertisement is the most expensive part of marketing. So, beside social media ads, invest into emailing marketing services, such as Mailchimp.
Generally, the advice is to set a marketing budget that would equate to 5-10% of your monthly revenue. So, let’s say you’re expecting a revenue at first to be around $10,000. That means $1,000 of your monthly budget should go towards marketing.
Consider Setting an Emergency Fund
Emergency fund is a separate saving that a business can use when they are in trouble. Even small businesses and startups should have one. A good rule of thumb is to have three to six months of operating expenses saved in your business emergency fund. But you certainly can set aside as much or as little as you want.
We will not add an emergency fund into our final tally of how much to start an online boutique, since it’s a number that every business sets for themselves individually. Still, it’s best not to be stingy about your emergency fund, as it can save your business in a moment of need.
So, How Much Does It Cost to Start an Online Boutique?
It’s time to finally tally up the average associated costs of starting your own boutique online. Remember that these are approximate prices and you have a choice to tweak your expenses as you see fit. Here’s how much an online boutique startup costs:
Estimated Cost to Implement
StageCreating a legal entity
Estimated Cost to Implement∼ $250
StageBuying a domain name
Estimated Cost to Implement∼ $20
StageChoosing your e-commerce platform
Estimated Cost to Implement∼ $30
StageDeveloping a custom website
Estimated Cost to Implement∼ $10,000
StageTaking product pictures
Estimated Cost to Implement∼ $500
Estimated Cost to Implement∼ $1,000
StageGetting packaging supplies
Estimated Cost to Implement∼ $300
StageSetting a marketing budget
Estimated Cost to Implement∼ $1,000
StageTotal online boutique startup cost
Estimated Cost to Implement∼ $13,100
It is a myth that you can start a decent online store on a budget of less than $20,000. Considering how oversaturated the fashion niche is, you need to make the right decisions to create a truly competitive e-commerce boutique. Oftentimes, what’s better for your business is usually on the more expensive side. So, if you want your store to succeed and not close down after a year, we advise to look at startup costs realistically.
In this article, we broke down eight of the most significant associated expenses to finally answer the question of how much does it cost to start an online boutique. In case you have any questions or want to begin building your online boutique — get in touch with us for a free consultation. Our team of professionals will ensure that your store operates smoothly and effectively, designing a project plan that is most suitable for your business!