How to Start an Online Clothing Store | Guide for 2022 and Beyond

Apparel retail is one of the fastest-growing segments in the Indian e-commerce market. The pandemic has pushed a lot more people towards online purchases, especially in the urban centers. Various brands have been watching this growth carefully and have an online store to sell their clothing range.

While there is still a large chunk of business that happens via physical stores, online sales have become a significant part of the overall retail sales. The trends also indicate a lot of growth and there lies a huge potential for this space.

Thinking about how to start an online clothing store in India? You need to consider several aspects before you begin. Through this guide, we will help you with all the details you need for starting an online clothing store.

12-Step Guide to Start an Online Clothing Store

Consider the market size & estimation of fashion retail

Fashion retail has been growing rapidly, while the pandemic has pushed its growth to new levels. The Indian market is estimated to reach US$7,560mn in 2022. The revenue is further expected to grow at 11.78% until 2025.

The women’s apparel segment held about 50% of the market share in 2021 and has seen an order growth of 30% in 2021 compared to 2020. Overall, 2021 was a good year for online apparel retail with a 51% increase in order volumes and 45% growth in GMV (Gross Merchant Value).

While marketplaces with multi-brand formats continue to be the favorite channels for consumers, the direct-to-customer (D2C) approach has also seen a big jump. A lot of brands now sell to customers directly via their online stores, which shows you are not alone when you want to know how to start an online clothing store.

Now that you have a better idea of the fashion retail market, let’s move towards finalizing your store’s niche.

Choose your niche and decide what to sell

Before you get into the finer details, the first step in the process is to decide what you should sell. Choosing your niche is important as it can be difficult to achieve success in establishing a generic clothing brand unless you have sufficient budget to market the platform.

You can select the niche based on what you want to sell through your online store.

Will you only sell clothing for men, women, or kids? It could also be dedicated to a particular type of clothing like sarees or formal wear.

Choose carefully as this is an important step in the process of starting an online clothing store.

Source your products: resell or manufacture

The next big question to answer is whether you want to resell products or manufacture them to build an online brand. Both business models are viable but have their own pros and cons.

In case you choose to manufacture the apparels, you can get a lot more control over the inventory and quality of products. It will also help ensure that your brand is reliable and builds long-term relationships with the customers. However, this also means more investment and running costs. You might also have to deal with several regulatory challenges.

On the other hand, reselling is an easier option and you can get started with your online store much faster. Before you pick this way to start an online clothing store, you must know that you will be dependent on your supplier for timely delivery and quality of products.

Therefore, if you have a reliable vendor who can supply the products you want to sell without compromising on the quality, reselling is a good option to consider.

Investments/resources needed: equipment, know-how, etc.

Having an estimate of the investment and resources you would require is the next step in the process. This depends on the model you choose to start an online clothing store.

You will also need to set up a fulfillment center to stock your inventory and hire workers for packaging and shipping the products to the customers.

The next big investment is required to set up and run an online store. You can get it done by hiring freelancers or agencies without worrying about the technical know-how. However, you need to hire professionals to get the website up and running without facing any technical glitches.

Then, there are marketing costs to consider to promote your platform and products to the targeted audience.

Having a good idea of the total amount needed to start an online clothing store will be a good starting point. You can then decide if you would want to raise funds to set up and run your store or can invest the required amount yourself.

Assess the competition in the market

Before you dig deeper into how to start an online clothing store, It is also important to consider the competition in the market.

Fashion e-commerce is an attractive space for business owners. It also means there can be a host of players in the market you want to cater to. Besides this, there are big marketplaces, major fashion e-commerce players, and smaller brands running their independent stores.

Look at what the competitors in your space do to analyze what you can do differently. This will give you a fair idea about how to get started with your online clothing store.

Look at the products they have, the price points, their policies, payment options, return process, and how they market their brands and customers.

Set an appropriate pricing plan

Pricing is a very important aspect related to starting an online store, irrespective of what you sell. Most customers are inherently very price-conscious, which is why finding the price point that works for them is critical to success for new brands.

One of the best ways to price your products is to look at the competitive rates of similar products available online and offline. The general pricing should be based on how the competitor’s products are priced. You can then figure out the final pricing that works for you.

Keep in mind that there is no hard-and-fast rule related to pricing the products on your online clothing store. To begin with, you only need to ensure that the customers get a better deal when they buy from you. At all times, you can do A/B testing with the pricing to which numbers drive maximum sales. Other than this, you can rely on discount offers to attract customers to your online store.

Set up the right refund and return policies

Another important part related to setting up an online clothing store is to have clear policies concerning refunds and returns.

One of the biggest issues of fashion retail is that people are used to trying out new clothing in retail stores before purchasing. Online stores have restrictions that do not allow this. The questions that now arise are –

How will you manage returns and refunds? What is the time duration for returns? How will the refund policy work?

Getting answers to these questions is crucial in defining the policies to build the credibility of your brand and ensure that the customers know exactly what they should expect.

Set up your online clothing store

How you are setting up your online platform is an important decision to make. There are multiple options available to get your website set up. You can approach a web developer to create a custom website or you could just go with plug and play platforms that allow you to create websites with little to no coding. Platforms like WooCommerce and Shopify are popular among e-commerce business owners.

For a new business, starting with a ready-to-use platform may be the best option. It gives you the ability to get started quickly with all the basic functions you need. You can also add to the functionality using plugins and apps that can be easily added to the website. You should choose to develop your website only if you have certain custom functions that you cannot find on Shopify or WordPress.

Choosing a payment gateway

Facilitating smooth and secure payments is integral to the success of your online clothing store. You want to ensure a hassle-free payment experience for your customers so that they will come for more.

While there are several payment gateways available in India, selecting the best one requires you to do a simple payment gateway comparison.

While making the choice, make sure that the chosen payment gateway:

Allows multiple modes of payments, such as credit/debit cards, net banking, UPI, and other popular wallets
Is easy to integrate
Offers timely settlements
Asks for the least MDR
Supports international payments if you want to sell to customers abroad
Supports subscription feature

Wondering which one to choose? Look no further than Paytm Payment Gateway which is the preferred choice for millions of businesses in India.

Recommended Read: What Makes Paytm Payment Gateway the Best in India?

Plan for the logistics and reverse logistics

Logistics is another aspect to consider while starting an online clothing store. This is how the products you sell will reach the customers who buy from your store. These days, you need not build your own fleet to manage the last-mile delivery as there are so many delivery partners available to join hands with.

All you need to check is that the partner you choose can ensure safe and timely delivery of your products and covers all the locations you want to target with your brand.

Next in line is reverse logistics which caters to the return requests placed by the customers. While setting up your logistics, make sure that you can take care of the returns at reasonable rates.

Doing the paperwork to set up your brand and company

Legalities and paperwork is a crucial step while starting an online clothing store. If you are new to starting a business, ask for help from a professional in setting up your company and various legal and regulatory aspects.

Whether it is GST registration, PAN, papers of incorporation, all are important for a hassle-free establishment of your online clothing business.

Plan for marketing & branding

In the online clothing business, marketing your brand and products the right way can lead to enormous sales from day one. For a new business, defining the right marketing strategy may not be easy but make sure that you have a strong brand story to develop the much-needed connection with your customers.

Also, invest wisely in marketing your business to the right audience. You can include email marketing and social media marketing to reach out to your audience. Take help from experienced digital marketing agencies or professionals to ensure that you get the results you expect.

Tips to grow and sustain your online clothing store

With the steps given above, you can get started on your online clothing store. To maintain the operations and follow the right growth trajectory, here are a few tips to keep in mind:

Invest in long-term relationships with your customers

This is something that sets the best apart from the rest. After you start an online clothing store, you must invest in building long-term relationships with your customers. The focus should be on the customer lifetime value that a customer has rather than the short-term benefits. This will also ensure that you get the most out of your customers and vice versa.

Maintain smooth payment and checkout experience

One of the biggest stumbling blocks for most e-commerce businesses is getting the sale through. Many users add items to the cart and then decide not to purchase if they don’t trust the site or if there are issues in the checkout process. Therefore, you must invest time and money in simplifying the checkout and payment process.

Having a trusted payment gateway is a good way to ensure that the users know that your site is credible and that their orders are safe.

Also Read: How the Right Payment Gateway Can Enhance Customer Experience?

The bottom line

Starting an online clothing store becomes easy when you have the right plan in place. There is a market out there with millions of potential customers looking for new brands that can provide them with the products they need. Follow these steps to get close to starting an online clothing store.

FAQs

How much does it cost to start an online clothing store?

The cost involved in building an online clothing store varies depending on what you want to sell, the chosen business model, product niche, and much else.

Do online clothing stores make money?

Good quality clothing is always in demand. You can generate significant revenue and profits by starting an online clothing store.

Do I need a license to sell clothes online?

To start an online clothing business, you will need to get the required legal licenses and permits. For more details, connect with a tax professional.