How Much Capital Do You Need to Open an Online Clothing Shop?

How much capital do you need to open an online clothing shop? This is not only a question for people who want to sell clothes online. It is a common question for anyone who starting an online business. Beyond the question of capital, people also want to learn from those who went before, covering the basics of opening an online clothing shop, so they can plan for the long term. In this article, Mona Media shares the basics you need to know before you start selling clothes online.

Issues to settle before estimating the cost of selling clothes online

Before answering the question “How much capital do you need to open an online clothing shop?” you need to settle the following:

• • What products do you want to sell? (for example women's or men's clothing, cosmetics, household goods)

• Which channels will you sell through? (for example social media, the biggest e-commerce marketplaces…).
• Who is your target customer?
• Try to estimate how many products you can sell.

These are questions to answer for yourself in order to estimate how much capital you will need, because these factors directly affect the quantity and cost of the stock you buy. Depending on your goals and the products you want to sell, the capital you need to start will differ.

How much capital does an online clothing business need?

To estimate the capital for an online clothing business as closely as possible, you need to know the costs you will pay once trading begins. They include:

Capital for buying stock

After researching the market, identifying your target customers and choosing your products, the next step is to find a quality supplier.

The capital you need for stock depends on the type of goods you buy wholesale and the quantity. It usually falls between 10 and 20 million VND. If you want to sell high-end goods (premium or well-known branded goods with high prices), the amount will be higher. Conversely, if your target customers have middle to low incomes, it may be under 10 million VND.

Capital for Facebook ads?

Some online sellers with limited starting capital choose to sell through the personal Facebook account they already have. This has an advantage: there is usually no advertising cost, and you reach customers through natural interaction. But this approach suits only people with wide networks, or who are already well known and have some influence on social media, since only then can they reach enough customers and close orders.

Most online fashion shops today sell through a Facebook fanpage. You have probably seen sales posts appear in your feed while you were engaging with related content. That is Facebook advertising. Its advantage is that it reaches potential customers quickly and effectively. On the other hand, it suits only online shops with a large advertising budget, because it can cost from a few hundred thousand to several million VND per day.

Capital for selling clothes online through Google?

Cost of building an online clothing website

A large share of your customers will come from Google. So to grow your online business, having an online clothing website is essential. How much capital does that take?

When you plan to use a business website design service for your business, you need to find and hire a company that specializes in web design. Prices vary with what you want and how complex the site is. Generally, owning and running a website costs 10 to 15 million VND per year. Compared with selling on social media, a website on Google gives customers more confidence because it is more credible and shows professionalism.

Google advertising costs

Once you have an online store, the next step is to advertise it. Two approaches are widely used: Google Ads and SEO.

• Google Ads: You pay Google to appear at the top of search results.
• SEO services to rank first on Google: This helps your website reach the top when users search for a given phrase or related keyword. It works by applying Google's ranking algorithms so you appear in top results organically, without paying Google anything.

Google Ads suits large online shops with big budgets, since Google advertising is quite expensive today. Smaller fashion shops or those with limited budgets can choose SEO, which costs less and holds a top position more durably. In return, the business needs time and an investment in a professional team to do it. The budget for getting keywords to the top is roughly 5 to 20 million VND.

4 ways to sell clothes online and profit with no capital

Method 1: Order-based selling online

With this method, you follow new clothing designs on domestic and overseas clothing websites, take the photos, post them on your own website or social media pages, and sell at a higher price. Only when a customer confirms an order do you order the item from the website, receive it, and deliver it to the customer. You can ask the customer to pay part or all of the order value in advance. Your profit is the difference between the supplier's price and the price you set.

• Pros: Low risk. Little or no starting capital.
• Cons: Orders may be delayed, and you cannot control stock levels (you do not know whether the item a customer ordered is still available).

Method 2: Sign up as an affiliate for an online clothing shop

You can also sign up as an affiliate for wholesale clothing shops. You take photos from the shop and post them online to sell. When a customer orders, you go to the shop, pick up the goods, deliver them to the customer, and keep the profit.

With this method, though, you need to order regularly to get the best prices and a high profit. Your earnings also depend heavily on your ability to find customers and your sales skills. The more you sell, the more profit you make.

Method 3: Sell clothes through livestreams for commission

This usually suits people who speak fluently, are easy to listen to, and can persuade customers. If you feel you can do it, you can sign up as a livestream affiliate for online fashion shops. You earn a commission as a percentage of orders, so the more you sell, the higher your commission.

See also: Tips for effective online livestream selling

Method 4: Affiliate who posts to sell clothes online

To earn from selling clothes online this way, you sign up as a sales affiliate with fashion shops. You take the shop's photos and posts and publish them on social media. The shop handles payment collection and delivery. Your earnings follow the agreement you made with the shop owner beforehand, so the more orders you close for the shop, the more commission you earn.

These are the basics you need to understand before deciding to open an online clothing store. The capital you need depends on the business model you choose, such as social media, a website or e-commerce platforms. There are also options that need no capital or very little, such as signing up as an affiliate or selling on an order basis from another source.

Overall, the cost of selling online through a personal Facebook page usually falls around 5 to 10 million VND, mostly for stock. Larger online sellers may need 20 to 50 million VND to be able to start an online clothing shop. Good luck, and may your sales go well!