Have you ever wondered how to start a Fulfillment by Amazon (FBA) business? If so you've come to the right place. The average Amazon Seller makes about $10,000 profit per year, but Amazon estimates that between 5-10% of the seller central accounts make over $100k profit each year and around 2% make over $1m profit a year! We talked to one of the luckiest Amazon sellers in the game, Casey Walters. Puppy lover at heart, Casey started Shed Defender because friends would complain about his dog shedding all over everything. As a result, he's been invited to Shark Tank, featured on Buzzfeed and Mashable, and made $1.2 million last year selling Onesies for dogs. We're going to walk you through Amazon business options, how much it costs to start an Amazon business, and the actual process of how to start an Amazon business. When you're done reading this, you won’t wonder, “Is an Amazon business worth it?” You'll know it is.

What Is an Amazon Business?

When wondering how to start an Amazon business, there are a variety of business models you can choose. Which business model you choose will depend on how much money you have to invest, what kind of skills you have, and how you want to operate your business. Some of the more common ways people run businesses on Amazon are: [su_note note_color="#dbeafc"]

• Amazon Seller with Self-Fulfillment: You store the products and fulfill the orders for your shop.
• Amazon FBA business: Amazon stores and fulfills the orders for your shop (Only one guaranteed to qualify for Prime listings.
• Dropshipping with a third-party supplier: A third party carries inventory and ships it when you have an order. This may be combined with print-on-demand.
• Let Amazon sell your artwork and receive a royalty for each piece sold.
• Amazon Associate links and blogging: You write blogs and refer people to Amazon to buy products mentioned in the blog.

[/su_note] Let's look at the benefits of starting an Amazon FBA business.

Why you should start your own brand as an Amazon FBA business

For those of you who want to start your own brand, an FBA business is the way to go. Amazon FBA is only available if you have a professional seller account on Amazon Seller Central. Of the Amazon business models, an FBA business offers some unique value propositions including:

• Amazon Brand Registry works to protect your intellectual property.
• Products are stored in Amazon fulfillment centers worldwide.
• Products in fulfillment centers automatically qualify for Prime delivery.
• The shipping process is handled for you, which is helpful as most sellers can't independently get the same shipping rates because a new business doesn't have the sales volume and proven demand that Amazon does.
• Inventory management solutions are provided from the largest eCommerce website.
• Returns are handled for you.
• New sellers receive discounts on sponsored product ads, shipping to the fulfillment center, and a monthly storage fee.
• FBA fees are charged based on a per-sale basis plus a storage fee.
• Send product samples of new products to encourage Amazon reviews.

Keep reading to learn how much it costs to start an Amazon business.

How much does it cost to start an Amazon business?

If you’re looking to start your own brand, you can expect to spend $100K-200K during the first year on inventory, software, and marketing. If you go with dropshipping or print-on-demand, the costs can be reduced to the cost of the software you use, but your profit margins may be narrower.

How to start an Amazon FBA business with little money

Fortunately,  you can start an Amazon business for free if you use Amazon Associate and a free blog site like Medium, but you'll want to master how to use relevant keywords. At UpFlip we use SurferSEO to help us rank our blogs well. Dropshipping is another answer to how to be an Amazon seller without a lot of startup funds. You'll just need enough money to cover the first few days of orders and software costs. Amazon Sellers can also start an Amazon FBA business with one low-cost product that sells like wildfire. For instance, you might buy 500 lightning cables for iPhones for $830 and ship them to an Amazon fulfillment center and sell them for $4 each. That makes it easy to sell on Amazon. Let’s look at what you’ll want to know about starting an Amazon business.

How to Start an Amazon Business

Starting an Amazon business has never been easier. There are so many ways Amazon sellers can sell on Amazon so you just have to find the business model that works for you. You don't even need a business license before starting an Amazon business if you plan to have less than 40 sales per month because they have an individual plan that starts at $.99/item sold. If you want to take the more business-minded route, I suggest reading Hub articles about starting a business because this blog is focused on teaching you how to sell on Amazon in 7 easy steps: [su_note note_color="#dbeafc"]

1. Decide what you are going to sell
2. Create account
3. Add products
4. Market products
5. Handle customer service
6. Manage the shipping costs
7. Get customer reviews

[/su_note] Keep reading to learn about product research when starting an Amazon business.

Step 1: Decide what you are going to sell

Before you can start selling on Amazon you have to decide what you are going to sell. There are several matters to be considered if you want to make money on Amazon including:

• What are you passionate about?
• What is the demand for the product?
• What are the price points of comparable products?
• What is your Cost of Goods Sold (COGS)?
• Are you going to be a reseller, print-on-demand merchant, or private label with inventory?

Let's look at how each of these impacts how to start an Amazon FBA business.

What are you passionate about?

Passion impacts what you sell because many of us find it tedious to spend all day doing something we don't care about. You'll be spending a good chunk of time creating a successful Amazon store, so it needs to be focused on products you believe in. In Casey's case it was: [su_quote]I really love my Saint Bernard, but people would complain that she used to shed everywhere we went so I created a product that would prevent her from shedding all over the place.[/su_quote] It makes it easier to push through the challenges when you really believe in something. Make sure you consider what you love as you start your Amazon FBA business. Keep reading for more considerations. Check out the rest of his interview below: [su_youtube url="https://www.youtube.com/embed/XTiks_VFTMo"]

What is the demand for the product?

Demand can be used in two ways to help you choose products, either by identifying gaps in the market or by identifying trending products. Each has a different strategy and both can be used to help an Amazon Store capture more of the market. Let's look at each.

Identifying gaps in the market

When you are looking for gaps in the Amazon market, you are looking for issues that aren't already solved or at least aren't solved well. Tools like Opportunity Finder help professional Amazon sellers identify product ideas that can increase their profitability. You can search the product database for high selling product ideas based on the Amazon seller product category and find create your own business

Identifying Trending Products

Review the Amazon Best Seller page to establish what types of products are selling best in the industry you are considering. The Amazon Best Seller Rank is based on the sales in the category compared to other products, and it is updated hourly. The ranking is weighted between recent sales and long-term sales so you can get an idea of what is trending, but some products are consistently best sellers. For instance, diapers are always going to be a best seller for babies, but the brand and style might change. If you review Amazon’s trending products, you’ll notice seasonal and holiday trends. For example, during November and December, women's winter seasonal wear is usually trending.  Next, you might want to prepare for the next trends which will be spring wear and Valentine’s Day. While you are looking at them, make sure you can see what the best price available is, which we'll discuss next.

What are the price points of comparable products?

You have to be competitive to be able to sell in a market where there are millions of products. If dog leashes are going for $6-$30 and you would have to sell your leash for $100, there has to be a legitimate reason why customers would want to pay the difference. For example, the only leash I saw that justified a substantially higher price is the bike leash so a person riding a bike can have their dog run with them. It was $70, which would be reasonable for a niche that is an avid bike rider that wants to get exercise with their dog. You’ll need to know the price of comparable products to help you establish whether the estimated cost of selling the product can be recouped in sales.

What is your Cost of Goods Sold (COGS)?

Your cost of selling the product on Amazon is the full price your FBA business spends to provide the product to the customer. The costs that Amazon includes in its Margin Per Sale are: [su_note note_color="#dbeafc"]

• COGS: The total costs of the materials, packaging, assembly, and shipping to the Amazon warehouse converted into a per-item price.
• Amazon referral fee: Typically 15% of the sales price OR $.30, whichever is higher. Find more detailed answers about Amazon referral fees on their site.
• Shipping to the customer OR the FBA fee:
• • If you are handling shipping yourself, add your cost of shipping minus the FBA Fees vary based on the item but start at around $3. For more detailed pricing, review the link with the referral fees above.

[/su_note] If the cost of selling the product does not provide a reasonable margin, typically 20-50% then you probably don't want to sell that product. Casey told us: [su_quote]My margin's typically run 40-70% because Amazon takes out 15% off the top for the FBA services... They are higher on my own site and Chewy, but 65% of my revenue is on Amazon.[/su_quote] Let's look at the final consideration when deciding what to sell: how you plan to get the products.

How will you source the products?

Sourcing products is accomplished in three main ways: [su_note note_color="#dbeafc"] 1. Resell other manufacturers products 2. Print on demand sellers 3. Private labels with inventory[/su_note] Each of these strategies has different benefits and risks associated with selling on Amazon. Keep reading to help you decide which works for you.

Resell other manufacturers products

When reselling products, you'll find a supplier, purchase them, and resell them for a higher price. Common places to buy products to sell include:

• Wholesalers: Wholesale Central has a list of wholesalers grouped by category. They may require minimum purchases but offer lower prices based on quantity. These may offer to dropship as well.
• Distributors: Like a wholesaler, but focused on selling a specific company's products
• Going out of business sales: sometimes you can find killer deals when a company is closing. Just make sure the prices are less than what you can sell them for.
• Clearance at big box stores: Sometimes clearance sales have pricing that is ridiculously low at stores like Walmart, Target, and Best Buy. I've found a $2,500 computer for $1,100 in the past.

These options will typically require more of an upfront cost, but the payoff is in lower shipping times, which customers love. People use Amazon because of Prime, which requires FBA  to qualify. You can do it through other methods, but this is the easiest way to meet the Prime requirements. Keep reading for information about print-on-demand sellers.

Print-on-demand sellers

Print-on-demand allows creative folks to sell their art with low upfront costs by only printing the product after it is ordered. This is also called dropshipping and is great from an inventory standpoint, but is slower than when you carry inventory. From order to customer's door can be up to 14 days, but it can also be less in inventory costs. Printful is the option I use for print-on-demand, but Amazon also offers Merch that does something similar and qualifies for shipping under Prime Membership. Merch does not charge sellers the cost of manufacturing, but Printful does. Merch pays the seller a royalty.

Private labels with inventory

If you are designing your own clothes or products, this is the strategy for you. You'll have to source your materials, find a manufacturer, and have your own storage facility (or use Amazon's). This type of Amazon seller is the most labor-intensive but is also the only one that can truly take advantage of gaps in the market. Casey told us about one of the upcoming products that he could not create without using this approach. He is working on releasing a leash that can wrap around the dog and connect to itself with a magnet, making it easy for his dog to move when it is alone. And then when the dog needs to be on a leash, Casey just grabs it and it's ready to go. Normally this category requires the most funds to get started. You'll have design costs which will vary based on complexity, then manufacturing and shipping costs, plus you may need to patent unique aspects of a design to protect the intellectual property. Casey told us: [su_quote]Mom sewed the prototype then I went to a seamstress who could sew maybe one per day. When we went from 5/ month to 100 in a night and then over 1,000 orders in 3 months, we had to find a manufacturer to mass-produce. The first loan was $30,000 from my mom and the first year was a total of $140,000 in manufacturing and fabric.[/su_quote] Keep reading to learn how to create an Amazon FBA account.

Step 2: Create an account

Before you can start selling on Amazon, you need to create a seller account. You may already have one if you have an eCommerce store that is already connected to Amazon or you shop on Amazon. Follow the directions to create an account and you will come to a page that looks like the one below. This page will request the name of the country your business is located in, the type of company, the name of the company, and to certify that the information is correct. Make sure your business is already registered with the proper government agencies before you input this information. It's important to note that in the US, there are five business types to choose from: [su_note note_color="#dbeafc"]

• State-owned business: Most likely won't apply to you unless you are opening an account for a government agency.
• Publicly listed business: Most likely won't apply for you. These are for companies that sell stock on an exchange.
• Privately owned business: This is for you if you are registered as an LLC, corporation, or operate under a sole proprietorship/ partnership with a DBA.
• Charity: If you are a nonprofit that raises money by selling goods, this is what you'll choose.
• None, I am an individual: Choose this if you do not have a company that you are operating under.

[/su_note] For the rest of this article, we are going to assume you are a privately owned business. If you are another form of business, the process may be slightly different but only for the next few steps. The next screen will request your business registration number, address, phone number, and contact information. Put this information in and confirm it with a one-time SMS password. They may send you a postcard you need to respond to as well. Then it will ask for information about the contact person including country of citizenship, country of birth, birthday (in DD/MM/YYYY format), proof of identity, residential address, phone number, whether they are a beneficial owner or legal rep, and whether you have included each of the beneficial owners. Beneficial owners are those that own 25% or more of the company. The next step will tell you that you need a bank account and credit card. Make sure to read the page as I'd expect it to be different depending on the type of company. Once you accept, it asks for your bank information. Once you have included that, the system will verify it. If your bank is not on their default list select "Others," input the information, and it will require a bank statement later. Then it will ask you for a credit card and inform you that you'll be charged $39.99/month if you have active listings, so don't create active listings until you are ready to pay it. On the next screen, you'll need to add the name of the store, any Universal Product Codes (UPCs), any diversity certifications, if you are the manufacturer or brand owner, and whether or not you have any trademarks for the products you plan to sell. The final sign-up step for an Amazon seller account is to provide proof of ID (both front and back) and any other documentation requested (a bank statement was requested from me). Amazon may request a video call. If so, the options are immediate (greyed out when I attempted) or scheduled. Schedule the call if requested and attend it. You'll need to go back to the verification page to attend the call and input the code on the postcard before you can access the account. I scheduled the call and received the postcard after 7-10 days. Once I input the code from the postcard in the link provided, it allows you to start working in the account. Are you still thinking about starting an Amazon business? Keep reading to learn how to add products to your Amazon Seller account.

Step 3: Add products

Now that you have an Amazon seller central account, it is time to add products to your Amazon Business. Regardless of whether you start selling private label products, dropshipping, or participating as an Amazon reseller, you'll need to add your products before you can start selling. You'll need to include the following information: [su_note note_color="#dbeafc"]

• Product Identifiers such as GTIN, UPC, ISBN, or EAN. Alternatively, you can request an exemption.
• An SKU, for your internal inventory tracking
• Visible product page elements

[/su_note] Keep reading to understand each of these requirements.

Product Identifier

When preparing to sell on Amazon, you'll need to be aware of the requirements of a product identifier. They accept the following types of product identifiers: [su_note note_color="#dbeafc"]

• Global Trader Identifiers: issued by GS1 for $30 per product with a one-time fee.
  • You need one of these for each size, color, style, and type of package they come in. This is expensive if you are running a clothing company. GS1 suggests these for companies needing 10 or fewer barcodes.
  • According to GS1, these cannot be used for medical devices, pharmaceutical products, variable measure products, or mixed cases, or to create coupons.
• Universal Product Codes (UPCs): issued by GS1 along with a company prefix, but have both initial fees and annual fees. These come with the bar codes you are used to seeing on products sold in stores.
  • Savings of up to 99.65% compared to buying individual GTINs
  • Available in batches of 10, 100, 1K, 10k, 100k
  • Eligible for Medical devices at $2,100/year
  • Can buy extra to plan for growth or buy new company prefixes as you need more
• International Standard Book Numbers (ISBNs): These are for books. Go to selfpublishingadvice.org for more information if publishing a book.
• European Article Numbers (EANs): Also available from GS1 and only required in Europe for physical items.
• Japanese Article Numbers (JANs): Also available from GS1 and only required in Japan using 45 or 49 for the first two numbers of the 13 number barcode.

[/su_note] Now that you know about those, unless you have fewer than 10 items, go with the company prefix. If you have global sales, make sure to multiply the number you need by the number of countries or regions you need codes for. They are referred to as Global Location Numbers on the GS1 site.

Stock Keeping Unit (SKU)

You can create your own system if you want, but honestly, it might be best to just use the UPCs as your SKU numbers to keep track of your inventory. They already come with barcodes and everything you need to make inventory management easier. Why recreate it? Keep reading for information on creating a product page so you can become an Amazon seller.

Product Page

The Amazon product page is the key to capitalizing on Amazon’s business opportunities. It is where the user will find the majority of the information about the private label product. Here is an example from Shed Defender. It includes the title, pictures and videos, seller name, reviews, any promotions, price, sizes, and colors, followed by the product description. Let's look at each of these to see the impact they have as you sell on Amazon.

Title

The title should give the prospective customer an idea of exactly what the product is. The title on Amazon should include the brand name, the color, and the product name. You may also want to include differentiating factors between your product and other products. For example, you might include, “Seen on Shark Tank.” Shed Defender uses the following title: [su_note note_color="#dbeafc"] Shed Defender Original Dog Onesie - Seen On Shark Tank, Contains Shedding of Dog Hair for Home, Car, Travel, Anxiety Calming Shirt, Surgery Recovery Body Jumpsuit, E Collar Alternative [/su_note] I don't really love what they've done because I consider it keyword stuffing, but they include the company name, the product name, and some of the great selling points. They don't include the color because it is available in a variety of colors, which makes sense because they can include the color in other areas. I would probably have left it as"Shed Defender Original Dog Onesie - Seen On Shark Tank" because it is sweet and to the point. Keep reading to learn about the photos and videos that an Amazon seller should include.

Amazon product photography requirements

Photos of the product have specific requirements that Amazon sellers must be aware of if they wish to be able to sell their products. Some types of products have additional requirements, but the main requirements are: The first photo must: [su_note note_color="#dbeafc"]

• Have a pure white background (255,255,255 is the color code if you do your own editing)
• Show the whole product
• Fill 85% of the picture
• be named with the Product Identifier for books and some other products
• Have a long side that is between 1,000 and 10,000 pixels on the long side
• Be the following file types: JPEG (.jpg or .jpeg), TIFF (.tif), PNG(.png), or GIF (.gif) file formats

[/su_note] The other photos should follow the same technical requirements but do not have to be on a white background or use the product identifier as the title. They can include videos, infographics, and models except for babies. Make sure to review the information for specific product category photo requirements.

Seller Name

This is the business name or the title of the seller account you add when creating the Amazon seller account. It will be a hyperlink that will take you to a page similar to the one below. You don't really need to do anything with this step. I just want you to be aware of it.

Price

Be sure to come up with a price for each product listing during your research phase. You'll want to add it to the price box. With different sizes and colors, you can price each one differently based on the cost of doing business or you can price them all the same.  Shed Defender prices the sizes differently because dogs range from a couple of pounds to as big as an adult so they probably wouldn't sell many if they charged as much for a Chihuahua as they do for a Saint Bernard. But if you sell t-shirts, is it really worth offending someone by charging $3 more for a 2XL than you do for an XL? Probably not, so just find the highest cost of that t-shirt and make them all the same price unless there is a really good reason to charge different prices. I prefer that method cause it's not discriminatory to larger people.

Any promotions you are offering

Every successful business has sales from time to time. If a business is running any offers they will show under the price of the product listing. Once you start selling products, you'll probably want to do so as well. You can offer promotions on your product listing by following the directions on the deals page in Amazon Sellers Central.  Unfortunately, Amazon password blocks the link without a sellers account, but for those who have already created a sellers account, use the following link to learn how Amazon suggests increasing sales: https://sellercentral.amazon.com/help/hub/reference

Reviews

Under the Amazon seller, there are reviews. It’s a great place to look when learning how to start an Amazon business:

• They impact search results because search results take into account the likelihood to buy
• The likelihood to buy is based on reviews or prior experience
• The more good product reviews the better

We'll discuss how to get reviews in a future section but read the customer product reviews section carefully to understand the requirements and make sure your seller account follows the Amazon seller best practices to make sure you get higher product reviews.

Sizes and Colors

Sizes and colors are important because each size and color is actually a different page. It won't actually be noticeable that the page is changing, but it does slightly change the link in the address bar. The main photo can also be different based on the color desired. The following pages have slight variations that occur based on the sizes and colors that sellers should be aware of. Play with how this works on your product listings when you are setting up your store so you can comfortably work with your listings.  In the back end of the store, you'll be able to input the number of each size and color so that it won't offer products that are unavailable. Make sure to input this information into your product listings so that they stay up to date.

Product Details and Description

The product details and description are key aspects of selling products. Third-party sellers may be limited in what you can include in the product listing, but if you sell your own products on Amazon, you can get fairly creative as long as you are honest about what's in your product. You'll want to make sure to include: [su_note note_color="#dbeafc"]

• Commonly searched keywords
• Materials included in the product
• Brand name
• Unique selling points
• Sizing chart if available

[/su_note] Casey recommends using JungleScout for finding good search terms, and if you are uncomfortable with writing product descriptions, try an AI writer like rytr.me. On rare occasions, I'll use it when I have writer's block, but I prefer to write by hand to keep my mind sharp. You can review Amazon's Quick Start Guide for more information or review seller central for specific product listing requirements.

Step 4: Market your product and Amazon Business

No guide on how to start an Amazon business is complete without discussing the marketing of the business. There are a variety of ways to start marketing your Amazon FBA business both on and off Amazon. Choose what strategies to use based on whether you are selling your own brand or another company's product. We asked Casey about his normal marketing costs and he told us: [su_quote]I spend about $6,000 each month on sponsored ads through Amazon... In addition, I run Google Paid Search, and social media for awareness and remarketing.[/su_quote] In addition, he gave advice about launching new products: [su_quote]I use Vine for new product releases to start getting reviews...Plus I'll use Email, SMS, paid, and free social media strategies.[/su_quote] During the conversation, he talked about luck playing a major role in his success. He's been featured on Shark Tank and had the following to say about those: [su_quote]We'd been thinking about applying to Shark Tank, but Shark Tank actually invited us to apply. We did lots of prep and worked with a professional media consultant. We made a deal on the show, but then mutually backed out because we wanted more of a hands-on partner than they wanted to do. We got private equity about a year later though.[/su_quote] BuzzFeed and Mashable also reached out and he attributes it to: [su_quote]I've got products that people think are a joke so they reach out.[/su_quote] So basically his marketing strategy is: [su_note note_color="#dbeafc"]

1. Create funny products with meaningful uses
2. Drive awareness through social media, Vine, and companies that reach out wanting to feature his product
3. Run Google paid advertising and Amazon sponsored ads to sell products to people who are searching for pet products
4. Collect emails and phone numbers when people buy their products
5. Run remarketing campaigns when people abandon carts
6. Watch trends in the industry to create new products
7. Use customer email and social surveys to get input when creating new products.
8. Expand your product line and sell bundles to increase Lifetime Customer Value
9. Run remarketing campaign when launching a new product
10. Keep building on top of these

[/su_note] Between everything, his marketing budget is between $16k-$18k per month. He pays an agency to handle Amazon ads and another to handle the paid social media and Google ads. For most people that sounds like a ton of money, but it's only 12% of revenue on the high end. If you don't like handing the money over to others to manage, you can do it yourself. I'd recommend learning how to do it yourself by familiarizing yourself with many of the marketing tools available from the platforms you'll be marketing on. Here are some of the references for marketing from major platforms: [su_note note_color="#dbeafc"]

• Amazon Advertising Learning Console: Lessons and certifications on Amazon marketing tools.
• Skillshop with Google: Learn how to use Google Ad, Analytics, Google My Business, and more.
• Youtube: Learn how to make the most of YouTube Ads which are covered under Google Video Ads certifications.
• Meta Blueprint: Learn how to market on Facebook.

[/su_note] In addition, many marketing tools that you pay for such as JungleScout and Helium10 offer training to learn how to make the most out of your Amazon business. Assuming you are selling great products and using the best practices, you should start getting sales Keep reading to learn how to manage the shipping costs when you start an Amazon business.

Step 5: Provide Customer Service

If you're using FBA all the sales and customer service is handled by Amazon. If you are using self-fulfillment, you'll need to handle shipping, refunds, customer complaints, and inquiries. You can hire someone to help you with this, but you'll want to try to be the fastest and the best customer service in your product category. The easiest way to beat other sellers is to have the fastest shipping times, easiest customer experience, and best products. That means using Amazon FBA. Casey told us: [su_quote]Reviews make or break a seller’s rank. Make sure to get your product on Amazon Fulfillment.[/su_quote] While the margin may be lower than selling on your own online business, new sellers will find it much easier than managing their own sales. An online business that doesn't use FBA would have to store their products in their house, retail stores, or warehouse. You'll spend more time and money dealing with the operations than with growing the business.

Step 6: Manage the shipping costs and inventory

One of the biggest challenges an Amazon small business will face is the shipping costs. Depending on your products, shipping costs can be expensive. Keep reading to learn how to become an amazon seller and get reviews for your new business.

Step 7: Get Product Reviews

When wondering how to start an eCommerce business on Amazon, one of the biggest challenges any small business owner faces is how to get customer orders and get quality reviews.  Fortunately, Amazon offers some ways for sellers to get reviews for their own products. The most common are: [su_note note_color="#dbeafc"]

• Vine: For a $200 fee, brand owners can enroll a product in the Vine program and provide product samples to people who are highly likely to give quality reviews. I suggest you start with their Vine FAQs to understand more.
• Send a request for the customer to review the product from Amazon within the first 30 days or use an automated tool to activate this feature in JungleScout.
• Request buyers of your product in other places to go on Amazon and review it.
• Include a reminder to review the product on Amazon in the packaging, but don't incentivize reviews.

[/su_note]

Closing

We've provided everything new sellers need to create and manage an Amazon store. Remember the Amazon key for business is to have great pictures, great copy, and get great reviews. If you apply those lessons, you'll be among the people who know that an Amazon business is worth it. What are the benefits of an Amazon business that will impact which type you start?

Have you ever wondered how to start a boutique business? Lee Smith started Urbanity in 2009 after traveling to New York City and realizing that Bellevue, Washington didn't have a clothing store where you could go to select full outfits of designer clothing and accessories in one place.  Today it's making over  $1,000,000 a year. We're going to walk you through the process of starting your own boutique and share advice from Lee throughout. If you're ready to join a group of successful small business owners making more than $1,000,000 annually, keep reading!

What is an online boutique?

If you are thinking about starting an eCommerce business and staying up to date on current fashion trends, you should consider starting an online boutique. The boutique sells everything you need to make an outfit complete. This is a niche market of the clothing industry. To properly start a boutique, the boutique owner should have styles that work together to create an outfit. This includes brand name:

• Shirts
• Shoes
• Pants
• Accessories
• Shopping bags
• Purses

Make sure to sell accessories because they are typically high-profit items and easy upselling opportunities.

Defining the Idea

Before we start looking into the logistics of starting a new business, let's consider some of the aspects that may impact whether you want to start a clothing boutique. When you are starting any business, you should consider the following things:

• What type of business models are used in successful boutiques and which is best for me?
• Who are the major players in clothing boutiques?
• What is the industry outlook?

Which Business Model is Best for a Clothing Boutique?

It's important to know what business model will work best for your own boutique. There are many different models to choose from. The most common business models are:

• The traditional retail boutique
• An online boutique
• Both a retail boutique and an online boutique

The traditional retail boutique

For new business owners, it may be difficult to start a clothing store with a physical location due to the additional costs involved with a physical location. Lee told us: [su_quote]The buildout of the store was $150k, which was split between me and the mall owner.[/su_quote] If you have the funds to rent a space in a high-traffic shopping area, starting a boutique with a physical shop can be beneficial because the location introduces you to prospective customers. Lee also told us: [su_quote]The high-end clothing line industry won't allow you to sell their products online. If you plan on conducting business with these suppliers, you can only sell these products in your stores. You can show them in your social media though to entice people to come into the store.[/su_quote] Check out our interview with Lee from Urbanity below. [su_youtube url="https://www.youtube.com/watch?v=_wUc28d8KkE"]

An online boutique

An online boutique uses an eCommerce platform such as our partner Shopify to sell clothing. It’s far easier to start a successful online boutique because your online store can be seen anywhere in the world for a much lower cost than starting a successful clothing boutique with a retail location. When you start an online boutique, you may be able to benefit from reduced starting costs by using dropshipping options that are easily available via Shopify, like Printful or Oberlo. An online business also reduces or eliminates the costs of a physical location. While a small business will see cost-saving benefits when you start an online boutique, the small business owner will also see some increased costs compared to retail spaces. You should expect higher business expenses around:

• Increasing brand awareness
• Shipping
• Having higher cost-per-item with drop shipping because you are not ordering in bulk

Both a retail boutique and an online boutique

While new boutique owners may not be able to start a retail boutique early in their journey of starting a fashion business, the ones that can afford to will benefit more from having both your own store and an eCommerce website. As Lee pointed out, there are some items that he can only sell at the store location. In addition, clothing stores will increase their revenue from their existing customer base, while an eCommerce website will increase brand awareness by having a physical location.

Who are the major players in the clothing boutique business?

The largest online boutiques include some major players. You've got major Chinese retailers like JD.com and VIP.com with revenues of over $10B per year. Then you've got some of the US retailers, like Macy's and Kohl's that, make over $5B/year, but here are some of the largest revenues that are only boutiques:

• Asos $2.5B/year in revenue
• Revolve $479.5M/year in revenue
• NastyGal $167.7M/year in revenue
• Lulus $385M/year in revenue
• Francesca's $34M/ year in revenue

All revenues are based on eCommerceDB for 2020 online fashion sales unless noted otherwise. Small Players (the opportunity)

• Urbanity $102K/month in revenue
• Portland Gear $120K/month in revenue
  • Check out our interview with Marcus
• Throwbacks NW $25K/month in revenue
• Trendy & Tipsy
• LF Stores

What is the industry outlook?

Everything points to retail sales going more and more to online sales. In fact, Tech Crunch expects 2022 to be the first year that eCommerce sales in the US hit $1T. According to a Presearch about the "percentage of clothing sales online," online store sales are increasing by 3-4% every year. However, they are currently less than 30% of the $369 Billion dollars that Statista attributes to the US apparel and footwear sales. That means you can expect a successful online boutique to benefit both from the increasing trend of retail sales going online and the increasing sales from people spending more money since most places have abandoned Covid restrictions. Because of the growth in the industry and the move to online sales, people should expect higher revenue, more competition, lots of new entrants, and increased marketing spending.

Starting a successful boutique

There is a ton of work that has to be done before opening a boutique. Whether you are wondering how to start a boutique from home, online, or opening your own retail location, you'll need to consider the following:

• Writing a Boutique Business Plan
• Purchasing Inventory For Your Boutique
• How Much Does It Cost To Start A Clothing Boutique?
• How to start your own clothing boutique with little or no capital
• Funding Your Clothing Boutique
• How Profitable is a boutique?
• Naming Your Clothing Boutique
• Getting a domain name
• Meeting the legal requirements for a boutique business.

We created a checklist for you to follow if you proceed with starting an online boutique. Download our starting an online boutique checklist here.

Write a Boutique Business Plan

You need a business plan for your boutique. A business plan helps you define your vision while starting a boutique. Small businesses should use the plan to refine their business idea, guide decisions, secure financing, and develop partnerships with other businesses.  Boutique owners should have a flexible business plan so their process can evolve as their online boutique grows and fashion trends change. Here are some resources to help with this step.

Templates

We’ve gathered templates to help you develop your business plan. Here are some of the best:

• One-page business plan
• U.S. Small Business Administration (SBA) Business Guide
• State-specific templates
• Business Plan Template for a Startup Business

Resources

It gets better! Here’s some free and low-cost education on business plans:

• UpFlip’s blog on How to Write a Business Plan
• SCORE’s free business plans and startup assistance resources
• The Complete Business Plan Course (Includes 50 Templates)

I'd also suggest checking out our interview with Mike Andes on how to write a business plan below. [su_youtube url="https://www.youtube.com/watch?v=Seac5PbUZXk"]

Where to buy clothes for a boutique

When you're a small business owner, it can be a challenge, but you have to figure out how to get inventory for your online boutique. Do NOT buy clothes from local department stores — you may want to consider wholesalers online. Wholesalers are retailers who sell clothing in bulk at wholesale. Price and quantity requirements to buy from a wholesaler are much less than buying from manufacturers. These types of companies are perfect for boutiques looking for affordable inventory without sacrificing quality or style options. Let's get even more specific about where to buy boutique clothing. Here are some ideas:

• Check out resellers like Goodwill and other nonprofits. Sometimes you can find steals for a low cost.
• If you frequent other boutiques, you can sometimes find improperly priced items. A friend of mine has sold over 1,500 items on Poshmark this way.
• Magic Fashion Events are a great way to keep up with trends in the fashion industry.
• Dropshipping companies which I discussed earlier.
• Check out Brands Gateway's blog about 70 wholesalers for a great list of wholesalers to contact.

These are just some of the solutions for where to buy clothes to start a boutique.

How Much Does It Cost To Start A Boutique?

The cost of starting a boutique can vary dramatically based on your location, target market, and whether you are starting an online boutique or retail shop. Online boutiques can be started for as little as $1,000 assuming you use dropshipping, an eCommerce platform, and free social media platforms to target customers. When you are opening a retail store, you can expect it to cost at least $50,000 to start a boutique. Talk to other boutique owners in your area to get an idea of how much money they invested in their space. If your boutique ideas involve creating your own product lines, you can expect to spend $10K-$100K per product between design, manufacturing, inventory, ordering SKUs, and more.

How to start a boutique with no money

As I mentioned previously, if you want to know how to start your own boutique without money, you'll need to start an online boutique. I would use the following solutions:

• Shopify - 14-day free trial, which is plenty of time to set up an online shop and sell some products.
• Dropshipping - Check Shopify's app store for options that sell the brand-name clothing you want to sell.
• Amazon - Connect Shopify to Amazon Marketplace to increase exposure to potential customers
• Instagram - Create an Instagram shop and connect your Shopify to it.
• Use social media marketing to start selling to potential customers.
• Reinvest earnings to get some inventory for photoshoots and paid advertising to start marketing and attract even more customers.

That's how to start an online boutique with no money. Alternatively, we'll discuss other ways to start with no money in the funding section. Keep reading for funding options.

Funding Your Clothing Boutique

Common funding paths include:

• Personal funds/personal assets
• A loan from family or friends
• Funds from a business partner
• Government programs

The SBA offers free courses on financing options and funding programs. For info on using personal funds to start a business, check out this article from The Hartford. Alternative sources of funding include:

• Crowdfunding 
• Credit cards
• Home equity loan
• Business loan - check out our partners
• Rollover for business startups (ROBS)

I can't really tell you much about this as it's just a Facebook ad I have seen, but if your boutique has a recurring revenue stream (for instance, a new outfit each month) there are companies that will basically buy your future sales revenue at net current value. This might be something to look into if you are an insurance agent who receives payments each time someone renews their policy.

How much profit can a boutique make?

Lee says: [su_quote]You can expect 47-70%, but 50% is typically average[/su_quote] He also says that a smaller brand name will tend to allow you more profit margin if they really want to get into your boutique. If a brand can get new customers, you can make way more profit from their products.

Naming Your Clothing Boutique

You'll need to decide on a business name for your boutique. The elements of a good business name include the following:

• Does it describe what you do?
• Is it easy to remember?
• Does it prevent weird acronyms?
• Is it available as a domain name? Check that the domain name and social media accounts are available with namechk.

Try the business name generator from SquadHelp.

Get a domain name

You can buy domain names from a ton of places. You can normally buy them directly from the platform you set up your online store on, but if you want to spend money on it elsewhere, you can find domain names for as low as $0.88 at NameCheap. Other providers include:

• Google Domains
• GoDaddy
• HostGator

You can't learn how to start a clothing boutique without learning about the legal requirements. We're about to discuss that next. Keep reading.

Meeting the legal requirements for a boutique business

You’ve created a name and business plan. It’s time to establish the legal structure. For best results, hire legal representation that has experience starting a business, like an attorney, accountant, or tax specialist. They’ll help you get your business started quickly so you can focus on opening your own boutique. Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your boutique needs. Keep reading for information on different legal structures.

Sole proprietorship

A sole proprietorship is the easiest way to start a clothing boutique, but the structure doesn’t protect the owner’s assets from legal issues. That means if something goes wrong, you could lose both your boutique and your home. This structure should only be used if you can’t afford an LLC because the boutique includes work and materials that can cause injuries to employees or customers. To start a sole proprietorship, fill out a special tax form called a Schedule C. Sole proprietors can also join the American Independent Business Alliance.

Limited Liability Corporation (LLC)

An LLC is the most common business structure used in the United States because the company protects the owner’s assets. It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement. Each state has different requirements. Here’s a link to find your state’s requirements. People may register in specific states due to the cost of doing business. Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.

Partnerships and corporations

Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations.

Apply for an EIN

Every business operating in the United States needs an employer identification number. It’s like a social security number for your business. Apply for it on the IRS website. It’s used on tax forms when filing taxes and to tie employees’ pay to the proper employer.

Sales Tax Permit

Most states have a sales tax, and you need to adhere to their requirements. This blog isn't the place to discuss the permits for all 50 states, but Avalara has a guide on Sales Taxes. Check it out. While you are learning about sales taxes, consider using AvaTax with Shopify Plus to make your tax compliance super easy.

Tax filing and withholding

Federal and state tax filing requirements apply to new employers. You must keep records of employment taxes for at least four years, including special forms and accounting for state taxes. Don’t worry! We’ve got you covered! Check out the IRS guide for employers.

Federal employment and labor law posters

All employers must display Workplace Posters, which you can download from the website. Other requirements include:

• Employment Eligibility Verification (Form I-9)
• State’s New Hire Program
• Worker’s Compensation Insurance
• Disability Insurance—varies by states
• Occupational Safety and Health Administration (OSHA)

Unemployment Insurance

The U.S. Chamber of Commerce has a ton of information on unemployment and also offers links to each state agency that handles state unemployment. You’ll have to pay $420 per employee on a federal level plus any state UI. Now that you are familiar with the aspects of starting a boutique, let's look at some of the things you'll need to do before your online store is ready to launch.

Launch a Website

Every online store needs a website to sell its products online and have full control of the layout, content, and customer data. A boutique online store differs from other websites because it handles the sale of products, which means you’ll have some special requirements when starting a boutique business. The primary differences between an online store and other sites will be some of the pages, including:

• Product pages
• The backend of the platform
• Cybersecurity requirements to protect your customers’ credit card information

Product pages

Product pages are dedicated to selling a specific product online. Customers expect certain information from a product page. Anyone who wants to sell products to their customer base should follow these best practices:

• Multiple pictures of the product. I suggest following Amazon photography specs as they are the leader in e-Commerce sales.
• Capitalize the 1st letter of each word in the title but don’t use all caps. Make sure the brand and product name is in the title too.
• Include the price, quantity, and an add-to-cart button.
• Product descriptions should communicate the purpose of the product, important features, dimensions, care instructions, and warranty.
• Product identifier that is used to differentiate products. To learn about them or buy some for your products, go to the GS1 website. You’ll need a separate barcode for each variation of size, color, style, or quantity.
• Quick checkout buttons, like the Checkout with Paypal button, are fabulous for conversions.
• Manufacturer information if it is not your own brand.

Modeling your pages after Amazon’s pages makes a lot of sense because potential customers are familiar with their layouts. Check out Amazon’s Quick Style Guide for more information.

The back end of a boutique online store

An online store has a lot of features that other websites might not. Given most boutique businesses sell on multiple platforms, there are elaborate backends that help manage your business. The most common services to run a boutique online store on are:

• Woocommerce
• Shopify
• Wix
• SquareSpace

I’ve used most of these at different times. I personally prefer Shopify because I find its interface easier than the others, but most have either a completely free version or a free trial. Make sure to integrate the backend with popular sales channels like Amazon, Instagram, and Facebook. The downside of Shopify is it uses a proprietary code called Liquid that you’ll need to familiarize yourself with if you want to do extensive search engine optimization or custom coding. This limits the number of developers who can help you. If you are going to build your store yourself, I would recommend looking at each of them to see which you find least difficult to use. Check out our blog How to Create a Website (in 9 Simple Steps) for a more in-depth look at how to build a website.

Cybersecurity requirements

According to Magneto, e-Commerce is the most vulnerable industry to cyber attacks. That’s no surprise given how easy it is to start an e-commerce business.  To best protect your brand and customers, it’s a good idea to review and implement internet best practices as outlined in SOC2 requirements or ISO 27001. While meeting cyber security issues is complex, they will help protect your sales and customers to reduce the chances of a cyber-attack. If you’re still not confident that you can protect the brand name with technology, talk to your insurance agent about cybersecurity insurance.

Payment Processors

Payment processors are responsible for collecting payments from your customers. The majority of website payment processing is through PayPal. Other payment processors include:

• Stripe
• Amazon Pay
• Brain Tree
• Square

All of them include similar features and pricing. If your store has the option to integrate with them, offering the payment options your target customers want can increase sales dramatically. Shopify allows multiple integrations fairly easily.

Strategies for Opening Day of a Clothing Boutique

To launch your clothing boutique successfully will require different strategies based on your ideal customer. Lee told us: [su_quote]Because I was the first store of my kind in our area, I was able to partner with a lot of the influencers in the area without having to approach them. They came in because they thought the idea was cool, and we were able to partner with them and get the word out that way.[/su_quote] Another strategy he used was creating flyers and paying someone to hand them out. Other strategies that have success:

• Set up social media pages for your business. Post whole pictures of whole outfits on your social media with links to each product page. Add a discount if they buy the whole outfit.
• Partner with popular brands and do popup stores at fun locations.
• If you are comfortable with Facebook Live, TikTok, or other social media that uses video, launch your brand there.
• Hire teenagers to help you keep an eye on the market and help spread the word with your business.

Grow through marketing

Marketing is the trick to growing a business. You have to get your business and products in front of people to sell them. Marketing should be considered in all parts of the business. Some of the most important aspects of marketing include:

• Market Research
• Marketing Plan
• Marketing on Social Media
• Growing Your Email List
• Tapping Into and Growing Your Network

Keep reading for more information on marketing.

Market Research

Market research is simply identifying the amount of demand for the products or services the business offers. In our blog How to Start a Business: The Ultimate Guide (2021), Mike Andes goes into great detail about market research, including identifying potential customers, target markets, and demographics. The following is a summary of the points in that blog, but I'd strongly suggest reading it as well.

How do I find out who my potential customers are?

You can identify your ideal customers through Facebook surveys, but Lee makes an argument that in the fashion industry, you need to be your own customer. He told us: [su_quote]To keep up with the trends and sell the product, you have to love it. If you don't you're going to be miserable. Plus let's face it, who is going to trust someone with fashion if they are dressed badly?[/su_quote] In the fashion industry, I'd look at the characteristics and interests of you and your friends, then take note of them. We'll talk more about this in the next section. Here's another great interview we've done with Rio Estolas from Throwback NW: [su_youtube url="https://www.youtube.com/watch?v=I4SplY80dm0"]

Demographics and Psychographics

Demographics are statistical characteristics of a population or a subset of the population. Some considerations you’ll want to make are:

• Location
• Age
• Gender
• Other Interests
• Marital Status
• Number of children
• Job title
• Income

Psychographics are behavioral characteristics like things you like to do, what you value most and other opinions. These can be helpful as they can help a boutique recognize the best places to reach their demographic.  An example of a fairly obvious psychographic for boutiques would be that people who shop for clothes multiple times a week at the mall would suggest you should have a store in the mall, while someone who shops for clothes at Walmart once a year is not someone you are targeting.

Use Demographics and interests to build your target market

You know the type of people your boutique should be attempting to attract, but how do you define them? Facebook has mastered defining your target audience. Wordstream published an infographic with all of Facebook’s targeting options that I would suggest using to specify the exact characteristics of your target audience. If you use paid advertising, you'll use this profile to market your boutique.

Use your marketing plan and update it regularly

When writing the business plan, you should have written a marketing plan. Make sure to use it. As you learn which strategies are working and which aren't, you'll need to adjust the plan. Make sure to include what strategies you want to test, what you consider a success, and what you consider a failure. You should also define what percent of the budget should go to each initially and a point where you should cut off the funds to that channel of marketing.

Marketing with Social Media

Most clothing boutiques are going to use social media for most of their marketing. Each social media platform has a different business purpose and target market. Let's talk about a few of the main platforms and what makes them unique:

• Facebook (rebranding as Meta) - the largest platform with over 2 billion global monthly users. You can use it for lead generation and email collection.
• Instagram - another Meta-owned platform with approximately 500 million global monthly users. With the highest engagement rate and the best ability to reach 18-29-year-olds, Instagram is best for showing off outfits and linking to product pages.
• Twitter Advertising - I'll be honest with you: I find Twitter to be a way to communicate in industries that move the quickest. While fashion changes, it doesn't change as fast as politics, current events, crypto, and other financial news. If your target market falls into these categories, it might be worth it. If not, don't bother.
• Pinterest Advertising - 175 million monthly users that are mostly women. Pinterest is best for products without being a promotion because the promoted pins blend in with the rest of the styles.
• LinkedIn Advertising - 227 million monthly users that are primarily in the B2B market. I'd only use this if you are offering fashion for business professionals that are too busy to do their own shopping.

It's important to first define your goal/objective so that you don't waste time and money on the wrong platform: Lee recommends using Instagram, and he told us: [su_quote]Make sure to take great pictures. Capture the clothing in a great light, and it really helps drive interest. Make sure to link to the product pages in the posts.[/su_quote] If you are going to do paid ads, I would highly recommend reading this Oberlo blog about lessons learned from spending $20k on Facebook ads.

Grow Your Email List

Email lists are a great way to remind your customers about your business.  Most businesses collect emails by offering something for free. For a boutique clothing company, I would recommend offering either a discount or the first item in a subscription for free. Once you've collected their data, you can use it to let them know about sales, remind them about abandoned carts, or let them know when a new product line is released.

Tap into your network

Lee told us: [su_quote]Find local brands and partner with them to grow your network. By partnering with them, you'll be able to expand your network. You'll promote them, they'll promote you, everyone grows. Then you can reach out to bigger partners once you've grown. This strategy got me to where Jay Z wore one of my shirts at a Nets game. That was huge for me![/su_quote] Don't be afraid to ask them for advice. Many of them probably have their own website

Running your boutique

Running the boutique is what you will spend most of your time doing. This includes aspects like hiring employees, helping customers, keeping inventory in stock, accounting, and payroll.

Hiring employees

Hiring employees is primarily focused on hiring people who represent the brand well. Lee told us: [su_quote]When I am hiring employees, I consider whether they seem to fit the style of the clothes we are selling, whether they are pleasant, and whether I trust them. As a small business, trust is big. I don't have the resources of major corporations to catch people stealing, so I need to trust my employees.[/su_quote] When hiring employees for a boutique, you’ll be required to:

• Post Open Jobs
• Conduct Interviews
• Establish Compensation
• Manage Tax Filings and withholdings
• Comply with Federal and local labor laws

Keep reading for more info on each step.

Job Posting 

Hiring people requires posting “now hiring” signs and posting on prominent job boards. Some places you can start posting job requirements are:

• Facebook
• Indeed
• Zip Recruiter
• LinkedIn
• Craigslist

Interviews

Having a prepared list of questions for interviews can make hiring the right people easier. Indeed offers a variety of resources to help you make better hiring decisions. Read their guide on how to hire your first employee. Some questions you should ask during the interview process include:

1. Who is your current favorite designer?
2. How does your previous experience make you a better fit than other applicants?
3. How do you respond to a customer when you don’t know the answer to your question?
4. Have an article (or articles) of clothing ready and ask them to go through the store and find accessories to go with it.
5. What are your compensation expectations?
6. Do you have any ongoing commitments that impact your availability? If so, what dates and times will it impact?

Compensation

Employees are typically a company’s biggest expense. There are three common pay structures in business. Each fits different scenarios. Let’s take a closer look.

Salary

Flat weekly/monthly rate based on a person working a specific number of hours. This is typically reserved for owners, managers, and some admin roles. You might want to assign this to yourself for budgeting purposes.

Hourly

This pay structure just tracks the hours an employee works and pays them a set hourly rate. This pay structure is solely based on time, not performance.

Commission

Typically used in sales to give employees a percentage of revenue. It is a strictly performance-based compensation model.

Hybrid Models

Hybrid models combine two pay structures: for instance hourly and commission to compensate for time and performance. The hourly rate will typically be lower than an hourly rate without commission, but the commission should make it where good performing employees make more than they would without commission. These structures also help reduce the variability of pay from week to week. Paying employees an hourly wage works for most positions for clothing lines, but depending on your business structure, a commission or hybrid payment model might make sense. The article, “How to Create a Pay Structure That Promotes Team and Company Growth” offers some insights into thinking about pay structure.

Outsourcing

If you don't need a full-time employee, you can consider outsourcing or hiring a freelancer on sites like Upwork.com. You may pay more per unit hour, but it saves you time in hiring, training, and other time-consuming activities. Accounting and payroll are often prime targets for outsourcing because they can be done remotely on a weekly or biweekly basis.

Tax filing and withholding

Federal and state tax filing requirements apply to new employers. You must keep records of employment taxes for at least four years, including special forms and accounting for state taxes. Don’t worry! We’ve got you covered! Check out the IRS guide for employers. Lee told us: [su_quote]I hate doing accounting, so I pay someone else to do it. I love reviewing the numbers, but handling the number crunching is not something I enjoy. Have someone who enjoys doing it so you can focus on the areas you love.[/su_quote]

Federal employment and labor law posters

All employers must display Workplace Posters, which you can download from the website. Other requirements include:

• Employment Eligibility Verification (Form I-9)
• State’s New Hire Program - This is required so that people who owe child support remain in compliance
• Worker’s Compensation Insurance - Insurance for when employees get hurt on the job. Check out this guide to state laws
• Disability insurance - California, Hawaii, New Jersey, New York, and Rhode Island, and Puerto Rico have requirements. Learn more about disability insurance
• Occupational Safety and Health Administration (OSHA) - Federal and state laws govern what are safe working conditions. Fines can be up to $136,532/violation or up to $13,653/day. Make sure you understand your area’s laws at OSHA.gov.

How To Retain Customers For Your Clothing Boutique

Retaining customers is primarily about customer service and making it easy for them to interact with you via methods they are comfortable with. Lee suggests spending a lot of time in the stores. [su_quote]I don't have to be in the stores, but if I'm not, I won't have my ear to the streets. I get to hear everything customers ask for and talk about, which helps me make better inventory decisions. Getting the brands customers love keeps them coming back.[/su_quote] If you are running an online boutique, you should be thinking about aspects of the user experience like:

• Can they shop without logging in?
• How many steps does it take to check out?
• Can customers easily get to other products that will look good with the item they've added to the cart?
• Do you save items they've added to the cart?
• If they leave the cart (and you have their contact info), do you send them a friendly reminder in case they got distracted?

Managing inventory

Lee told us: [su_quote]Managing inventory is a large part of my job. I'm keeping track of new trends, finding hot new brands, ordering new products, and having sales on products that sat on the shelf too long (but that doesn't happen too often).[/su_quote] He uses Lightspeed, which costs $150/month, but he doesn't love it.  Lightspeed is an all-in-one payment sales platform, payment processor, and inventory system. He suggests looking for better ones. He told us: [su_quote]With payment processing, look for local sellers who deal with most of the payment processors. They'll work with you to find the one that works best for you. They care more about satisfying your needs because their customers are mostly local.[/su_quote]

Top Influencers

• Lime Lush
• CladandCloth
• The Pretty Dress
• Ganni
• Francescas
• Check out StarNGage for a ton of other influencers that might fit your boutique.

We've given you all the knowledge and tools you need to start your own boutique. Make sure you focus on a style you are passionate about. We'd love to hear about your journey to starting an online boutique. If you'd like to tell your story or have tools you’d really love to share, leave us a comment below. We love hearing about strategies that work for you.

It’s the season of giving, and all the Yuletide joy got us thinking about the ultimate stocking stuffer in the business world: the Christmas bonus.

Veteran and rookie business owners alike might be wondering if they should cap the year off with a bonus, and employees certainly want to know if they’ll be on the receiving end. So we spent the month of November conducting original surveys about expectations and intentions for year-end bonuses.

[su_note note_color="#dbeafc"] How giving are employers during the Christmas season, and what can employees expect to receive? Read our findings from start to finish, or click any link below to jump to the specific topic that interests you most:

• Key findings
• Christmas bonuses bring tidings of comfort and joy
• Come December, cash is king
• How much do businesses give?
• Christmas bonuses last season
• Why some companies skip Christmas bonuses
• Christmas bonuses in 2023
• Conclusion [/su_note]

Key findings

1. Over 80% of respondents say year-end bonuses improve employee morale.
2. The majority of respondents think a Christmas bonus equal to a week’s pay is adequate.
3. 71% of Christmas bonuses come in the form of cash or one-time paycheck bumps.
4. Over one-fifth of companies give bonuses of more than $1,000.
5. 42% of companies give less than $100 in Christmas bonuses per employee.
6. Insufficient revenue is the main driver for not providing Christmas bonuses.
7. 51% of companies plan to give a Christmas bonus in 2023.

Christmas bonuses bring tidings of comfort and joy

The Christmas season is unmistakably commercial—and the strong link between commerce and the holiday can turn even the jolliest among us into Grinches.

Case in point: Two-thirds of survey respondents think businesses value the holiday season more than kids do. Christmas magic has entrepreneurially minded people under no illusions.

But does that disenchantment mean holidays in the workplace bring no joy? It doesn’t seem so. A healthy 84% of survey participants say employee morale increases after receiving a year-end bonus.

Expectations when it comes to those bonuses vary. According to our survey:

• 50% of people consider a week’s pay a good bonus.
• 21% are okay with a day’s pay or less.
• 29% consider a month’s pay or more to be adequate.

Our takeaway? Giving a bonus of some amount at Christmastime is a no-brainer. Happy employees perform better, and a bonus is a great way to juice morale—and performance—as you head into the new year.

UpFlip pays out Christmas bonuses, so we asked our CEO, Sergei Belous, for his take. He said:

[su_quote]Employees are the cornerstone of the success of any organization, and the least we can do for them is give Christmas bonuses as a token of our appreciation.[/su_quote]

Come December, cash is king

Businesses that give Christmas bonuses like to keep it simple.

Just over 71% of survey respondents who provided year-end bonuses in 2022 gave their employees cash or added money to their paychecks.

Another 21% opted to give gift cards or days off, and one respondent’s company gave money, gift cards, and days off. That’s a Christmas miracle!

The remaining 8% gave something else. If you received something other than money, gift cards, or days off, we’d love to hear from you in the comments.

How much do businesses give?

When it comes to dollar amounts, companies’ year-end bonuses vary widely: 42% give each employee less than $100 while 22% give more than $1,000.

The remaining 36% fall somewhere in the middle, with 19% giving between $251 and $1,000 and 17% giving between $100 and $250.

Christmas bonuses last season

46% of surveyed business owners gave Christmas bonuses in 2022, but about one-fifth of them don’t plan to give them again in 2023.

On the other hand, 53% of businesses didn’t give year-end bonuses in 2022, but one-fifth of them plan to change course by providing them in 2023.

On the employee side of things, 24% of those surveyed reported receiving Christmas bonuses in 2022, but almost one-fifth of them don’t expect to see one again this year.

76% of respondents didn’t get a Christmas bonus last year. On the bright side, just over one-tenth of them expect that to change this year.

Why some companies skip Christmas bonuses

According to our survey, 48% percent of companies don’t generally give Christmas bonuses.

Companies that don’t give during the holidays aren’t necessarily Scrooges, though. Of those that don’t give Christmas bonuses, 62% percent say they simply don’t make enough money.

11% cite poor employee performance for not giving year-end bonuses, and another 11% say they don’t know what to give.

The remaining 15% cited other reasons for not giving, including not celebrating the holiday or living somewhere that already mandates the equivalent of a holiday bonus.

Christmas bonuses in 2023

There are a couple of reasons to be jolly this year!

More than half of responding businesses—51%, to be exact—plan to give their employees Christmas bonuses in 2023. That includes 89% that plan to offer them for at least the second year in a row.

Unfortunately, 81% of the responding business owners who didn’t give a Christmas bonus last year won’t give one this year, either.

Conclusion

Our surveys show that more companies intend to give Christmas bonuses in 2023 than did in 2022. Unsurprisingly, the holiday bonuses they give are perceived to improve morale.

Thankfully, companies that don’t plan to give Christmas bonuses are actually in the minority.

There’s also agreement on what makes a good Christmas bonus: at least a week’s pay. That should help guide the 11% of business owners who are lost on what to give as a year-end gift.

And since the majority of employers base their holiday bonuses (if they provide them) on the year’s earnings, they should focus on growing their business.

Do you expect to give or receive a Christmas bonus? Let us know in the comments.