Help with my new start up online retail business

[Amyj]

Hi everyone
Amy back again! I wanted to update you on my new business venture which like all businesses has now gone through some changes. First my idea of new opening my fashion boutique grinded to a halt when the bank wouldn’t give me a business loan …then I thought, simply take my new venture online! Since I last posted I have been researching the idea of placing my boutique online. I have some very small savings and I’m hoping my local Credit union will help me as the loan I will require will be small. I have sourced some good wholesale sites which I will be checking out.
I have attended a social media for Business Course and found it very interesting and found out some great ways of using Google, Twitter, Facebook and Google+ to promote my online business.Also I have started investigating local web designers too.
Before I continue I had a look to see if there was a similar thread posted that may answer some of my questions, I couldn’t find one..
I have a few questions you ladies might be able to help me with:
Q1 Do I need to use a web designer with previous retail experience? ( I found a local one and they use only bespoke designs – no templates used, and his rates seem more reasonable than others I have looked at)

Q2 What level of capital should I leave aside for Marketing my online business (Online and Offline)?

Q3 How do I price ladies clothing - from buying from wholesalers(% Mark Up) to arriving at the RRP?

Q4 Is it necessary to start a fashion blog first and then link it to my website?

Q5 The above web designer includes a ‘free domain name’ in his price package – should I opt for this or simply use register365. com?

Q6 I have sourced some American wholesalers that offer ‘I-Parcel ‘ service (where they include our government taxes and import in the overall price). Has anyone ever used this facility and would you recommend it?

Q7 Anyone have any tips on dropshipping..?Are they reliable..? I was thinking of having the products sent to my home as I have plenty of room to set up a small distribution room and store the clothes myself…

Q8 If there are any Irish online links or supports that you guys think will help me - I would really appreciate any help you can give me !
Sorry for the long list of questions – hope the sun is shining where ever you are!

Thank you all in advance
The soon to be Irish retail ecommerce business woman!
AMY

[HelenaD]

Hi Amy

Welcome back!

I think it might be a blessing in disguise that you get to dip in your toe before going in the full hog with major capital commitments. I find the retail market for women's clothes to be particulalry tough as trends change quickly and there are so many similar alternatives available for less money and the money situation being as it is many people are counting their pennies now. I can't recall, were you going for a niche market? Make sure you have something different to offer, something that can't be bought on every other street corner if you know what I mean, and use this edge to develop your brand around.

Regarding your questions:
Q1: you don't 'have' to as such, but there certainly are benefits in using somebody who has specialised experience. This is not to say that somebody who has a much wider portfolio would not do an equally outstanding job - I think it is hard to generalise as it depends on the individual. Certainly you can get some recommendations from online retailers here.

Q2: what can you afford? Again, this is not a question that can be answered in generic terms. defining your target market is the first important step. Once you know who you are targetting, the answer will become more obvious in terms of what will work best in terms of mode - I would recommend a mixture of traditional and online advertising, and once you have determined which marketing tools you are going for you can assign costs. I would use social media as much as possible and think of other 'free' ways of promoting the business.

Q3: pricing - you can use a cost+ pricing method or a value based method. In your case cost+ method seems more appropriate unless you are a specialised/design/niche retailer.
Divide your costs under two headings:
- fixed costs that are always there, regardless of how much or how little you sell, for example rent, salaries and business rates
- variable costs that rise as your sales increase, such as additional raw materials, extra labour and transport
When you set a price, it must be higher than the variable cost of producing your product or service. Each sale will then make a contribution towards covering your fixed costs - and making profits.
You can decide that each product you carry must give a 10% profit margin or you may decide on a mix of profit margins as part of your pricing strategy.
There is a difference between calculating mark-ups and margins, and I think this link explains it well:
http://www.buildingtrade.org.uk/article ... argin.html
BTW, seeing that you are in Galway, it might be worth your while to take a trip to Castlebar to the August Open Coffee Club as the subject is costing and pricing: http://mayo-open-coffee-club.org/

Q4 Not necessary as such, but it would be beneficial - blogs are proven to drive website traffic, so if you can blog, do it.

Q5 I doubt this is free - I am sure the cost of it is included in the overall package price. I would just ensure that you have access to the the domain in case you want to change the providers at some later date. I know somebody who become unhappy with the maintenance of their website and wanted to change, but got caught out as they could not access their domain name which also impacted the e-mail management, as they did not have the necessary passwords and the company managing the website would not hand them over.

Q6 Sorry, no experience of I-parcel.

Q7 Dropshipping can work out really well, but I would only recommend it once you have volume to justify it as it introduces another level of cost to your pricing structure. Again level of service/reach/charges etc varies from provider to provider. www.sixworks.co.uk are pretty good if you intend to sell internationally.

Best of luck
Helena Deane

[Amyj]

Hi Helena
It’s good to be back! Thank you for your prompt reply to my list of questions..(Promise I won’t make a habit of it!) Yes, my original business idea is to supply boutique style, fashionable, good quality yet affordable clothing to petite and petite plus size ladies age group 35+.
After conducting extensive research in this area, I feel there is a large gap in the market for clothing to cater for this demographic. I contacted some Market Research Agencies in relation to conducting an analysis of this market but their fees were out of my budget, and the data they would be basing their findings on where from the USA….not even the UK! I know it is a difficult one to call as it is such a niche market but I’m surprised this information can’t be based on UK data….that I could work with. I was thinking of perhaps using Twitter and just asking the question ‘Would petite and curvy petite ladies think a fashion website of this type is needed? Something like that…do you think it would work..?

My idea is currently up and running for a number of years in America and is quite successful to say the least.

I found so many stories on the internet from women of this category from America, Australia and Europe asking the question ‘Where can I find clothes to fit and flatter my small frame? The petite plus size lady however is the most neglected of the two with nothing available for them.
I have studied the competition and their offerings are limited and old fashioned compared to fashion for ladies of average height and the same age group.
I’m thinking of going back to college and studying fashion design part time as one of my future objectives for my fashion business is to design my own label catering for these two groups respectively.
I wanted to fill you in on my niche business idea (it may or may not be too niche) and let you know where I am at the moment.

I would love to hear your thoughts.

Talk soon
Amy

[busywahm]

Hi Amy

Best of luck with all your plans.. I can hear the excitement in your posts

Just wondering if you had considered going down the affiliate route maybe initially to get started. Would help you to keep costs down and you wouldn't have to worry about things like shipping, stock control, customer service etc.. you could build a portal with affiliate links to various online retailers and get a taste for what actually sells and what doesn't without the other expenses?

Also just with regard to your comment about dropshipping. The whole idea with that is that you don't have to have it sent to your home it goes straight to the customer. They pay you but it gets sent straight from the manufacturer/wholesaler, My only concern would be in finding reliable dropshippers this side of the atlantic, they used to be few and far between but I'm sure that has changed ! and also I suppose it depends where your target market is?

rgds

Darina

[Amyj]

Hi Darina
Thank you for your best wishes and yes,I am excited ! Your idea of my going down an affiliate route sounds very interesting... but I am not very IT savvy if you know what I mean Can I learn to do this myself or do I need the help of the professionals?

Rgds
Amy

[busywahm]

Hi Amy

regarding the affiliate route, if you aren't comfortable building websites you would probably need someone to help you with that side, to ensure it's professional looking etc..Do you understand what I mean by building an affiliate website? basically you build the shopfront but when people click to buy the product they go through to the merchant and then you get a commission. So you don't deal with the customer at all you are simply redirecting them and earning if they buy.

Here are two good examples of affiliate sites to give you an idea of what I'm talking about.

allkids.co.uk and osoyou.com

Of course the hard part is the promoting of your site to get enough traffic to generate enough sales to earn enough money in commissions !

Darina

[Amyj]

Thank you for explaining this one Darina ! - i will have a look at these two sites.
Enjoy the Weekend
Amy

[HelenaD]

Hi Helena
It’s good to be back! Thank you for your prompt reply to my list of questions..(Promise I won’t make a habit of it!) Yes, my original business idea is to supply boutique style, fashionable, good quality yet affordable clothing to petite and petite plus size ladies age group 35+.
After conducting extensive research in this area, I feel there is a large gap in the market for clothing to cater for this demographic. I contacted some Market Research Agencies in relation to conducting an analysis of this market but their fees were out of my budget, and the data they would be basing their findings on where from the USA….not even the UK! I know it is a difficult one to call as it is such a niche market but I’m surprised this information can’t be based on UK data….that I could work with. I was thinking of perhaps using Twitter and just asking the question ‘Would petite and curvy petite ladies think a fashion website of this type is needed? Something like that…do you think it would work..?

My idea is currently up and running for a number of years in America and is quite successful to say the least.

I found so many stories on the internet from women of this category from America, Australia and Europe asking the question ‘Where can I find clothes to fit and flatter my small frame? The petite plus size lady however is the most neglected of the two with nothing available for them.
I have studied the competition and their offerings are limited and old fashioned compared to fashion for ladies of average height and the same age group.
I’m thinking of going back to college and studying fashion design part time as one of my future objectives for my fashion business is to design my own label catering for these two groups respectively.
I wanted to fill you in on my niche business idea (it may or may not be too niche) and let you know where I am at the moment.

I would love to hear your thoughts.

Talk soon
Amy

Hi Amy

I think it is actually good that you are starting off as an internet based retailer, rather than as a shop retailer, because your demographic is likely to be scattered nationwide and more concentrated in larger cities of Dublin and Cork, and you might have found it hard to get enough footfall on your premises in order to achive the desired or indeed necessary level of sales. The key question is how many women are contained within your demographic of petite and petite+curvy in terms of the overall market. I think most certainly you will have to look for clientelle further afield, such as Northern Ireland and UK to be able to grow in the longer term.

A twitter survey is a good idea, because you do need to conduct some primary research. Make sure you include some identifiers like age and geographical location, and I would also include questions pertaining to syle of clothes and pricing expectations.

I include this macro-report on the Irish clothing and textiles industry - some interesting info in there: http://goo.gl/5EhWD

Also, please be aware that you would be eligible for funding under the feasibility study heading for any market research you need to conduct, up to 60% of the total cost, with your local enterprise board. If you are living outside the city, there is also a possibility of a LEADER grant. Contact me if this is of interest to you.

Best regards
Helena

[Amyj]

Hi Helena
Thank you for the feedback and the helpful links - they are a great reference for me . Firstly, I have set up a meeting with the Galway Enterprise Board next week regarding funding for the feasibility study - fingers crossed! I agree that I will need to market my business and further my customer base in Ireland to include the UK,Northern Ireland and Scotland initially.Second, I would like to apply for the LEADER Grant as I live in County Galway, and as my business will be located from there...do you know where I can apply in Galway?
Thank you
Enjoy the sun and the Weekend
Best Regards
Amy

[HelenaD]

Hi again Amy,

To get the funding for a feasibility study from CEB, you need to create a Business Proposal, fill out their application form and provide quotations. They will, if approved, provide 60% of the funding for your study, excluding the VAT amount. You need to show international potential and also that your business idea is not going to cause displacement.

Regarding where to apply to LEADER, it depends where in the Galway county you are, there is more than one company managing the LEADER funds in each county. This is rural funding so you cannot live in an urban area. Also note that some of the CEB and LEADER funding are mutually exclusive, so for example you cannot apply for 40% funding with one organisation and then make up the rest with another. I would recommend applying with LEADER first if you are in the catchment area as their grants are non-repayable and go up to 75% for certain items, so would be more advantageous than CEB. If you pm me your address I can tell you where/with whom you need to apply.

I am very experienced with both funding applications and feasibility studies, so if you would like my assistance just give me a shout!

Best regards
Helena