Online clothing store business plan
The size of the clothing market in the Russian Federation in 2021 amounted to 2.36 trillion. rub. A strong increase is not observed. According to Rosstat, the indicator has not increased by more than 1.5-3% for the third year already. The market is in a state of stagnation. However, some stores are successful and profitable. Zara has an annual turnover of $ 2.4 billion. If you are smart about starting and growing your business, you can also be successful.
Analyzing the market
The industry slowed down in 2021-2021. Experts explain the situation by the depreciation of the ruble and the economic crisis. The purchasing power of the population has decreased. Most of the money goes to food and utility bills. There is no actual growth in incomes of the population, prices are increasing by 3-11% per year. As a result, people buy fewer clothes. Some consumers prefer cheap analogs.
However, you can make money from a clothing store. The first step is to buy a franchise. Working under a well-known brand will make it easier to find consumers. The creation of its own production is associated with serious investment. The risk of burnout increases.
The main buyers of clothing are women. They also buy goods for children more often. The age of buyers is 15-70 years old. The shops of the middle price segment are more popular. They are visited by buyers with an income of 25,000 to 70,000 rubles. When choosing a store, they consider brand awareness and product quality.
Online stores are popular. The option requires less financial costs for opening. It reduces the risk of loss in case of failure. By choosing this option, the entrepreneur will also save on hiring personnel. However, it is problematic to promote a retail outlet from scratch.
Success can be achieved by creating a classic store. To attract customers, choose the right place for opening a retail outlet. Form an assortment taking into account the wishes of consumers. Promote your business and attract buyers.
Best Selling Clothes
At the start, identify the target audience and form an assortment. Depending on the choice, the specifics of starting a business change. Stores are in demand:
- Women's clothing. The field of activity is characterized by a high level of competition. The demand remains even during the crisis. Clients have great financial capabilities and needs. However, keep in mind that the market is overheated.
- Men's clothing. Moderate competition, easier to win over consumers. Keep in mind, however, that men are less likely to buy clothes. They spend more money on children. In addition to clothing, the sale of accessories is permissible.
- Children's clothing. Children grow up quickly, so parents are forced to frequently update their wardrobe. A high margin is set on the product. However, there is serious competition in the field. The state establishes requirements for products for children. Violation of the norms is fraught with fines. However, the assortment of the outlet is wider. Children's stores sell food, hygiene products, toys and more.
Money must "work" and be profitable. If a person has savings, then they must be put into circulation. The best option is to organize your own business. Investing, opening a deposit or setting up the production of any product is accompanied by the risk of losing funds. A suitable option for a budding entrepreneur is the trade sector. But here the main question arises - which store is better to open so that it will start making a profit from the first months and pay off in a short time.
What do you need to open any store?
The general requirements for a store are vague because the criteria are determined based on the industry. For example, if you plan to sell vegetables and fruits, you can get by with a small pavilion, tent or kiosk. In the case of a clothing store, this option is unacceptable, because a hall with fitting rooms and laid out goods is required.
Other features of any store also differ from each other, but there are general requirements for the business.
It is impossible to start your own business without financial investments. And the more start-up capital, the wider the boundaries for the implementation of the plan.
Options where to get money:
- own savings - for a small business, personal finance is enough to open a small shop, bistro, catering establishment. This requires an amount in the redistribution of 200-300 thousand rubles;
- bank - it is extremely easy to take a loan for business development. If banks offer individuals to arrange loans up to 1 million rubles without a guarantor, then for entrepreneurs the amounts are much higher. The main thing is to collect all the necessary documents, including a business plan for a future project, and also have a certain amount of initial capital. You can provide documents on part of the work performed (renting a room). In this case, funds are required for repair activities and the purchase of equipment. If the bank sees potential in the presented project, then a positive decision is guaranteed;
- partnership is a common situation when one entrepreneur with a business idea starts cooperation with another businessman who has the funds to implement the project. In fact, people become full partners and co-owners of the business.
Help: there is an opinion that banking structures are more willing to issue loans to founders of LLCs than to individual entrepreneurs. In practice, this is not entirely true, because the financial structure assesses not only the status of an entrepreneur, but also his potentialities, credit history.
With a well-designed business plan, even a small initial capital can be used in such a way that the store will pay off in the first 3 months, and in six months it will make a decent profit.
Financial model of an online clothing store
How to make money selling clothes over the Internet?
Brief Investment Memorandum
Clothing is a popular commodity that is bought both online and in retail stores. Women's, children's, men's, party and casual wear - a huge number of different niches exist in this segment. You can choose the direction of development of a multi-brand store or a clothing store for a specific country of origin, clothes for a specific category of people or clothes for specific occasions. But the store format that is relevant now is an online store.
If before the pandemic many people did not trust online stores when buying clothes or shoes, now more and more buyers have turned their attention to the possibility of buying many things on the Internet, including clothes. The corona crisis and the restrictions imposed in connection with it significantly influenced many areas of business and the format of consumer behavior in general. And if companies operating in an offline environment closed or experienced difficulties during this time, online sales, on the contrary, grew and continue to grow.
According to the research agency Datainsight, which specializes in research in the field of the e-commerce market, the pandemic significantly affected the growth of online commerce in Russia, the forecast is an average growth of 6% per year until 2024. As a result of the quarantine, about 10 million new buyers came to this area. According to the agency, the growth of the eCommerce market by the end of 2021 will be 44%.
At the same time, according to a study by the same agency and Lamoda marketplace, in 2021 clothing and footwear accounted for 20% of the total volume of the online trading market in Russia. The main sales volume is casual wear in an affordable price segment. According to analysts, this segment received an additional boost in 2021. Of course, the competition in the niche is quite high, since there are large marketplaces such as Wildberries, mono-brand online stores, for example, Zara, as well as niche stores that sell, for example, clothes from Italy. In such a competitive environment, it is important to choose a product line that will be in demand. It should be borne in mind that the trend for individuality and personalization concerns fashion in the first place. More and more people do not want to buy the same things from the same manufacturers, so it is quite possible to find your niche in this category, despite the fact that it seems that everything is already being sold by competitors.
This business plan looks at the process of creating an online clothing store, with a different range of products, that would be suitable for several target audiences. The figures for analysis are considered averages for Russia. This approach will allow you to adapt a business plan to specific needs and help as much as possible in calculating the effectiveness of a specific business. This business plan was drawn up for a Russian city with a population of 500 thousand, the main sales are supposed to be carried out within the region (65%) and to neighboring regions (35%), the estimated number of sales per month on average is 370. Of course, at the beginning of the Internet store sales will be significantly lower. The main investments for opening such a business include: creating a website, purchasing the first batch of goods, organizing a warehouse.
Initial investment amount
Average monthly profit
Online clothing store as a business