It costs a lot to start a physical storefront. Between monthly rent, utilities, inventory, and employees for extra help, even a small shop can cost more than $30,000 to launch. These steep startup costs for a brick-and-mortar business don’t make financial sense for everyone.
Just because you may not be able to afford to launch a retail space doesn’t mean you need to let it crush your entrepreneurial spirit!
Instead, turn your attention online where the costs of starting and operating a retail business are a small fraction of physical stores. So cost-effective, in fact, that you can start an online retail business even with the tiniest of budgets.
1. Online Retail Store
A boutique is a smaller store that sells specialized or niche products for a specific clientele. For example, a boutique could carry formal wedding attire or glitzy gowns for pageants. There are even boutiques for fashionable pets.
Boutiques tend to do well in the online retail space because of the narrow market they serve. Instead of trying to compete with mega online retailers like Zappos or Zulily, boutiques offer their customers select products like lingerie, jewelry, wedding gowns, or baby gear.
Once you select a niche for your boutique, there are a number of ways you can find vendors and suppliers. Your initial inventory budget will help determine your best buying options to ‘fill’ your store. But, even if you’re working on a very tight budget, you can explore the possibility of dropshipping partnerships where you won’t be billed for products until a customer makes a purchase.
Setting Up Shop – Once you’ve decided where and how to source your boutique inventory, it’s time to get your store up and running. There are several low-cost e-commerce platforms to consider. One of the most popular is Shopify, an all-in-one e-commerce solution.
With your monthly Shopify membership, you receive everything you need to be a successful boutique owner including a fully customizable storefront, payment processing, inventory management, and marketing tools.
2. Amazon FBA
Amazon is the world’s largest online retailer with more than $107 Billion in net sales in 2015 alone. You too can get a slice of that multi-billion-dollar pie when you sign up to sell via Amazon FBA.
Fulfillment By Amazon, commonly called FBA, is a program that lets you sell on the largest e-retailer without having to worry about housing inventory, picking, packing, shipping or customer service concerns. You just need to focus on finding inventory, listing items for sale, and sending them into Amazon. That’s it! Once you hand off your inventory to Amazon, they take care of the rest.
Scouting Inventory for FBA – For the budget-conscious online entrepreneur, Amazon FBA is a great platform to start earning without a lot of upfront expenses. In fact, a popular way to get started selling on FBA is by scouting sale and clearance items at your local stores and selling them for a profit on Amazon.
This process, called retail arbitrage, allows you to purchase bargain-priced items that fit within your budget. Once your first wave of products sells, you can use the profits to scout and buy even more items as you continue to grow your Amazon storefront.
Want to find out more about Amazon’s FBA program? Check out Tracy’s story and how she’s earning $1,200 a month with this program!
3. Etsy Shop
You don’t have to be a handmade artist to run a profitable online retail shop on Etsy. While many shoppers head to Etsy to find one-of-a-kind creations, it’s also a popular marketplace for unique vintage finds and art supplies!
Of course, you can certainly take your crafting hobby full-time as an Etsy seller. But if you enjoy frequenting thrift stores and flea markets, you can also flip your vintage finds for profit on Etsy!
And because it’s free to open your shop, it couldn’t be more affordable to get started. You only pay small fees when listing an item and after an item sells.
Related: How to Be Successful on Etsy
Getting Started on Etsy
Whether you decide to turn a thrift store hobby into a vintage boutique or opt to sell art supplies to crafters around the world, there are some things to remember about starting a retail business with Etsy.
To start, treat your virtual storefront as if it were a brick-and-mortar business. This means keeping inventory on hand that is cohesive! If you source your art supplies wholesale, keep items in stock that go together like sticking with a specific art form or craft, i.e., sculpting, knitting, scrapbooking, quilting, etc.
And when it comes to listing your products for sale, remember to take great pictures and keyword optimize your listings! Etsy is very keyword-driven. Potential customers will search for what they’re looking for, and Etsy may or may not display your products in search results depending on how well your storefront and listings match a query. The better optimized your listings are, the more ‘foot traffic’ your storefront will receive.
When in doubt, turn to the Etsy Seller Handbook for advice and inspiration to help you successfully run your shop.
4. Social Selling
Although starting an online retail business is a lot more budget-friendly and far less labor-intensive than setting up a shop in person, it can still be an overwhelming process for beginners.
If you’re feeling unsure about navigating website ownership or aren’t keen on the idea of inventory management, you might want to consider social selling.
Direct sales meet online boutique; social selling is a way for entrepreneurs to start an online business with a lot of added support. It also happens to be an excellent way to get into retail for the budget-savvy seller.
Take cabi for example. When you sign up as a Stylist with cabi, you pay a startup cost to launch your very own fashion business. This seasonal fee gives you samples from the fall or spring collection, marketing materials, your own customizable online boutique, and access to an online ‘office.’ Plus, because you’re part of a major brand, you get plenty of training, support, and mentoring to help you succeed, no matter what your goals are as a merchandiser.
Another company to check out is SimplyFun. They sell award-winning educational games and toys for children. With SimplyFun, you pay a small startup fee to get started, and can sell via your website, email marketing, Facebook, and more. It’s an excellent opportunity for parents and educators!
What makes social retail businesses, like cabi and SimplyFun, different is the emphasis placed on providing personalized services and high quality products. There are a growing number of direct sales companies that embrace this approach to online selling giving budget-conscious entrepreneurs a chance to focus on what they love while building their business.
Start an Online Retail Business Without Breaking the Bank
It’s no secret that retail is big business! But as more and more shoppers head online to buy everything from clothes to furniture and even everyday household items, the e-commerce industry has exploded to more than a trillion dollars annually.
This is good news for would-be entrepreneurs who want to cash in on a retail business without the major expenses of a brick-and-mortar store. With the many popular marketplaces as well as social selling platforms, you too can set up shop as an online retailer without going over budget!
Great information. I currently work for Dressbarn, a women’s specialty store. On 12/26/19, all Dressbarn stores will be permanently closing their stores for business. Another company bought the online store.
I’ve been in retail for over 30 years. I enjoy helping women put their outfits together and building relationships. I do not want to go back to a brick and mortar retail job to only get paid off again. I know that online retail is the shopping trend for consumers. I would love more information on how to start a fashion retail store and or a styling business online. Any recommendations or information would be appreciated.
Hi Ronda,
I’m sorry to hear that you’re losing your position with Dressbarn.
There are, of course, the ideas mentioned in this article, but here are some others you may be interested in:
https://www.theworkathomewoman.com/home-based-business-fashion/
https://www.theworkathomewoman.com/fashion-jobs/
https://www.theworkathomewoman.com/free-fashion-boutique/
Being a Needler may also be of interest: https://info.needle.com/advocate-registration
Good luck and keep me posted!
It literally costed me $500 to start my own dropshipping business. Selling online is so much better than opening a brick-and-mortar retail store where I’d need to invest ATLEAST tens of thousands BEFORE opening up my door to customers.
Great article. I hadn’t heard of Shopify, I’m going to check that out! I became a Chloe + Isabel merchandiser in 2015 while I was finishing up my graduate degree and transitioning into a career. It is one the best decisions I’ve ever made! Like you mentioned, it was affordable to start up and gives the perfect balance of running your own business and being your own boss with all the support you need to be a one woman show. I’ve met so many amazing women (merchandisers and customers alike), become more fashion conscious and learned valuable skills in sales and marketing.
Hi Valerie, That’s awesome! I think direct sales opportunities are ideal for college students, moms wanting to reenter the workforce and aspiring entrepreneurs. It’s an easy way to learn how to build and market a business, and while you’re in business for yourself — you’re not alone in the business, you have a full team to guide and support you. And compared to traditional startup costs — it’s a drop in the bucket. Thanks for stopping by!
Hi Ashlee,
Great to see you here on Holly’s blog! Thanks for the tips and resources. I was this close to starting a retail business through FBA. I had the apps and set up the account and everything… but I could never get the time to buy inventory.
It’s a lot of work but when you put in the time and effort, this can be a lucrative business.
Gladly passing this along. Have a great day and rest of the week ladies.
Hi Cori, Glad you enjoyed Ashlee’s post! I keep telling my husband when we retire we’re going to be pickers and resell stuff. I definitely think it takes a good amount of work and running around, which at this point in my life I’m not ready to do. Thanks for stopping by and spreading the word — appreciate it!
So many great ideas! We sell on Etsy, and it’s been a lot of fun, especially during the holidays!
That’s great, Jennifer! What type of products do you sell?