You can choose to open a clothing store online or in the traditional physical location. The budget required will depend a lot on the business scheme you prefer. We will try to enlighten you on how much money you need to open a successful clothing store.

Electronic commerce or e-commerce is changing the way of doing business. From huge department store chains to small clothing stores, they migrated to the online business scheme.

Extensive inventories of clothing that today is “fashion” can remain seen as “old fashioned trinkets” in a couple of months.

That is how changing are the trends in such a dynamic market. If you don’t ask Forever21 or Sears USA executives, colossi that have seen their empires fall due to lack of innovation.

Consignment sales, dropshipping, or just-in-time inventories are schemes that work well with an online clothing business. It is an ideal mix to open a clothing store on a meager budget.

Stay until the end to find out anything you need to set up a successful apparel business, estimated investment, and central costs.

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Requirements to Open a Clothing Store

Opening a clothing store requires: knowing your audience, your suppliers, knowing about sales, and knowledge about the industry.

Be up to date with your audience’s trends, what is new, what is most striking, and produce your designs or establish alliances with designers and clothing manufacturers. Let’s see more details:

1. Know your Target or Audience

In this regard, you have to know about fashion and know your target market very well.

Will it be a women’s, men’s, or unisex clothing store? For children of all ages? And high-income people or all types of public? For conservatives or always in-fashion people?

The answer to these questions’ determination lets you know your audience or target. And from there, you will see the type of garments or merchandise you will display in your store.

2. Define the Business Format: Physical, Online, Both

Here comes the decision to open a clothing store in a physical location or an online clothing store.

Opening an online clothing store has many advantages over the physical scheme. You should know that millennials and post-millennials’ trends are to buy everything online, including clothing and footwear. The online plan implies a lower investment. You will have lower costs since you leave out the premises, the improvements and adjustments, the decoration, the exhibition, and the excessive inventory.

On the other hand, the online clothing store has disadvantages compared to the traditional format. You will depend on internet provider and web hosting, advertising tactics, positioning and web visibility (SEO-SEM), and office efficiency.

And it will be enough for your office to take a couple of hours longer than promised so that you have unhappy customers, no matter how in-fashion or innovative your designs are.

Perhaps the most appropriate thing is that you combine both formats, a small well located physical premises, with little inventory, a good sideboard; next to an online store with an excellent payment gateway.

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3. Develop the Business Plan for a Clothing Store

You will be closer to success if you formulate a business plan, there you will assess details such as:

  • Your customer profile or market segmentation
  • Description of the business, line of place, or activity
  • Know your competition
  • Supply chain – suppliers
  • Your means of promotion and advertising
  • Your location and size of business
  • Required staff
  • The investment demanded and main items
  • Income, cost, and expense budgets

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4. Seek Financing

It would help if you had a lot of money to open a clothing store, especially in the physical format.

If you opt for an online clothing store with dropshipping systems or consignment merchandise, you will most likely not need loans or other people’s money to open a clothing business.

If you persevere in the clothing store format, you can have some savings or look for money with family, friends, or enthusiasts (3f or friends, family, and fools) a bank and find out the microcredit schemes in your country.

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5. Forecast Inventories/Suppliers

Starting inventory is probably the most significant expense when opening a clothing store.

That you can produce your designs and make them is a great advantage, having alliances with designers and manufacturers.

Finding channels to import cheap garments or national suppliers at prices that give you the right margin is evident and convenient. In this regard, do research online, ask for quotes, catalogs, visit suppliers if possible, and never make large orders at the entrance.

Start with small batches of clothing so you can figure out which items are in higher demand and leave you with a better margin.

How much Money does it take to Open a Clothing Store?

The money needed to invest and open a clothing business depends on the type of clothing you offer, the business scheme: physical or online, the store’s size or business, and the target customer.

According to the English portal Bizfluent.com, the average investment required to open a small boutique-style clothing retailer is $ 100,000.

For the PQS Portal of Peru, we open a clothing store based on our high-end designs in a 100-square-meter store in Lima costs between 62,000 to 92,000 Soles, approximately USD 210,000 to USD 310,000.

The figure is somewhat high. The most representative items to determine this initial budget to open the clothing store are the premises and inventories.

You can consider getting rid of much of your inventory investment by opening a consignment clothing store.

The Initial Budget for a Clothing Store

We presented an example of a budget to open a clothing store in Spain in 2017. It is a small “women’s clothing boutique” in Madrid.

  • Deposit for rent of a 1,080 square feet premises: € 2,400
  • Monthly rent: € 800
  • Licenses and permits for the operation of the premises: € 2,500
  • Adaptations and improvements to the premises: € 4,500
  • Payment system per point € 1000
  • Equipment: cash register, laptop, TV, others: € 2000
  • Furniture, changing room, coat rack, sideboard: € 3,000
  • Inventory will depend on the type and quantity of garments. An average of € 10,000 to € 25,000 is estimated
  • Expenses for the first month of operations: € 5,000

We are only talking about the main items for a small women’s clothing store, and the money needed to open a clothing store of that style is a figure close to € 45,000.

Shopkeep.com provides an excellent approximation of the amount of money needed to open a clothing store in Toronto.

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With how much Money do I Put an Online Clothing Store?

The figures change when it comes to opening an online clothing store. It is that practically the new business philosophies such as Dropshipping and Just in Time make you do without even a substantial investment in inventories.

Here the main costs of your online clothing store will be:

  • Website design. You can buy a pattern from sites like Squarespace.com, Wix.com, or Weebly.com.
  • Configuration of payment means: contracting a payment gateway service, payment carts, credit-debit card acceptance options.
  • VPS services and SSL protocol (security certificates).
  • Web advertising.
  • Inventories (optional).

The investment to open an online clothing store will depend on your goals and the business’s size.

According to godaddy.com, the total investment can range from USD 300 for a small site, predesigned, and with no payment options configured, up to USD 2,500. The latter if it is a “marketplace” style site with all payment options included.

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