Building the Boutique

Oh boy! It’s been a little while since I’ve blogged, huh?  It’s been another one of those slow periods where nothing major is happening.  In my last blog I recapped the LA Trade Show.  All the merchandise orders have been placed, and yes I did end up canceling about four pieces because I went over budget.  No major changes, but I’m much closer to my original plan now.

Right now I’m just kickin’ back and waiting for those shipments to come in!  That’s when the fun part will start.  Between now and then I’ll start designing the site.  Ive had design block for a while now, but yesterday I thought of something that should be cute; I just hope I can execute it.

Anyways, I was going to blog about something entirely different, but then I saw this comment that Tawny left.  It’s probably the #1 question on the mind of many a prospective boutique owner but it’s also one that doesn’t really have an answer:

  I just wanted to know How much does it cost to start your own online business? How much would I need prox. minus the merchandise? – Tawny

Thanks for asking Tawny!  There really is no approximate  answer, unfortunately.  Here’s what your expenses will be for the most part….

• Advertisement
• eCommerce software, hosting & design
• Shipping materials
• Photography
• Business materials (labels, business cards, letterhead, etc)
• Travel Fees

A lot of times how much you’ll spend on these things will depend on how much inventory you’re taking on.  For example, Advertisement.   Say you’re spending $10,000 on merchandise for one season, and marking that up by 2.2%.  You won’t want to spend more than $11,000 on advertisement because then you’re breaking even (actually you’ll be losing money if you factor in other expenses).  And that’s also assuming you will sell all your merchandise at full price (which is unrealistic).  Of course, when you’re starting a business you’re not expecting to make a profit and you need to get the word out more than anything.  I’m not sure if there’s a rule of them when it comes to an advertising budget but I would say stick to 50%-75% of what you spend on your merchandise (example: $7500 across 3 months).

With your eCommerce needs you’ll need a good shopping cart system plus a merchant account.  The costs for this vary.  I will probably use Yahoo Shops which costs around $100/mo and that includes credit card processing and hosting.  You could also choose to use a free script like Zen Cart and host it on your own, which will run you around $50/month for a good VPS on a host such as Knownhost.com.   For a merchant account, theres 2Checkout.com and Google Checkout, the latter of which charges significantly less for each purchase made.

And also as a part of ecommerce, you’ll need a web developer who can design and probably customize your site.  This can cost as high as $1000 or more, it really depends on what you need done and who you’re asking.  And if there is anything you’re going to spend a lot of money on it should be this because web developers are EXTREMELY FICKLE!

Another major cost is product photography, which once again depends on how much inventory you’ll have.  I’ve been quoted between $400 and $800 for one session for a maximum of 40 high resolution photos (think front and back of twenty items), possibly less for the following sessions.   You’ll need to do a session at least once a month with shipments coming in every two weeks.  And on top of that a mannequin will cost you $200-$300, OR hiring models, hair and make up will run the bill up even more than that.

Everything else is a minor fee if you ask me, except perhaps travel fees.  That depends on where you live; you might not have to travel at all or you might have to fly across the country several times a year to check out the showrooms and trade shows.  So airfare, hotel rates and meal costs should be taken into consideration, but the good thing is it’s a vacation that you can write off on your taxes as a business expense!

I know I didn’t give a definitive answer here, but I really cant.  Every situation will be different and it depends on what you want to do and how much merchandise you want to start out with! I can tell you that I plan on spending around $6000 (not including travel) ON TOP of the merchandise I’ve purchased (but doing my own design saves me a ton of money).  But that very well may change so always allow for more.

I hope that helps put things in perspective?

Well I got back from market week and the Brighte trade show in Los Angeles a couple of hours ago, and as promised, a recap!

We got there on Saturday around 1:30 and checked into the hotel before going to the first appointment. I had two that day; one at Theresa Matthew Studio the New Mart and another an hour later right across the street at the California Market Center with Voom. These appointments seemed to go by so much faster than my first showroom appointment, and for some reason I was a lot more decisive. Hopefully that will prove to have been a good thing.

By the way, if you read my interview with Lauren I mentioned the four lines I’m carrying. I actually made big changes to the line up by axing one and picking up two others; but the names will stay a secret for now! I definitely will be carrying Voom though. The idea is to get people on to the website through their name and then hopefully introduce them to some of the lesser known but awesome brands I’ll have. The sales reps with Voom were great as always; actually all of the sales reps have been super friendly and surprisingly down to earth; I was a bit scared because of some of the things I’ve heard!

Anyways, back to Voom.  Fans of the line, you’re really in to something this Spring and Summer! I totally see an Eva Longoria and the now infamous elephant dress redux. Super cute pieces, and I don’t like the idea of keeping merchandise from my inventory but I might have to on one or two pieces!  But on the business side, what I love about this line is that they’re always open. You an buy immediate deliveries and up to about six months in advance; they’re very flexible and they cater to the buyers, which is great.  They’re also flexible about  minimums.

Budget? What Budget??

I ended up with a total of 16 pieces from all three lines, and when I got home I realized I went way, WAY over budget. Yikes! It looks like I’m going to have to do some editing and cancel some pieces, perhaps one of my lines, but it’s really not the end of the world. There are pieces that I feel really strong about and some that I’m a bit on the fence with, so editing isn’t necessarily a bad thing.

Perhaps I wasn’t very decisive?

One more thing!  I actually found another line called Nancy Rose that I absolutely FELL in love with! Seriously, they had this high waisted mini skirt that I can’t stop thinking about. I hope to carry it sometime later this year.

Photo source: californiamarketcenter.com

I’m starting to realize that when you run a boutique you have to wear so many hats and be so many different things. Actually, I think fashion industry jobs are like this in general, because you have to be creative, tech savvy and business savvy, but rarely are people all three. One of the biggest parts of being a successful buyer is forecasting trends so you know what to buy. And sometimes this has to be done six months before the season, depending on the market dates and the closing dates of a particular designer.

Think Backwards
Trends come in and out of style in a cycle; we all know that because leggings, for instance, are in now and they were in during the 80’s. But it doesn’t always take 20 years for a trend to come back in style. For instance, I could’ve told you early last year that knee socks, asymmetry and leather pants would be making a comeback now. And I knew this for two reasons…

• Leather pants and one shoulder shirts were popular when I was in 9th or 10th grade (about 7 years ago). Pretty much all of the other trends prior to that made a resurgence, so it only made sense that these two would be next.
• Just about every other trend that I remember since I became aware of this thing called “fashion” (I was about 8 or 9 at the time) came back around except for knee socks. And considering the popularity of leggings and stockings, it was sort of a no brainer.

Just Watch the Runway
When I went to my first market to purchase about half of my inventory it was before New York fashion week, so I didn’t have that to go on. But this time around I know to look for some of the soon to be trends like dip dyed hems, sheer shirts and tribal details. Style.com has great fashion week coverage, and you can find discussions of trends spotted during them at forums like TheFashionSpot.com.

What Mood Are We In?
This isn’t something that I’ve experienced, just something I’ve learned and noticed. The mood of the country can have a big effect on trend, especially color and embellishment. Designers who put a lot of bright colors in their Spring/Summer 2002 collections felt this hard (September 11th) but after then we saw military details came in during the following fashion week. I don’t think I have to tell you why.

Subscribe To Predictives
For those who have major $$$ to spend, you can always subscribe to fashion forcasting services like the Doneger Group. Throug these services you can see all the silhouttes, themes, patterns and colors that are predicted to be in style, up to two years in advance. I used to look at these at my school and they definitely are on point most of the time. Actually, I think these services are better for fashion designers than buyers, but it could be worth a shot!

So there you have it. Being able to see the future is just one of many hats we wear in the fashion industry. And yet we still get no respect!

Check out this interview I did with Lauren over at her fab blog, La Petite Fashionista. I’m flattered that she cared enough to want to talk to lil’ old me. Good luck with you fashion internship, Lauren!

I’ve talked  a bit about this before, but this question sent by Madeline made me realize I need to go more in depth about it all!  There’s a lot of paperwork that needs to be done before starting any kind of business.  It’s not fun and it’s not glamorous but it has to be done!

I am also a 22 year old recent grad with a dream of opening my own boutique! I JUST got my business license on 12/31/07!

I have been roaming the net for some inspiration and information and stumbled across your site.. it’s awesome to follow your progress and all sounds sooo exciting! Congrats!

Mainly, I have a question about obtaining a resale license? Everywhere I look online regarding a resale license seems like a hoax/gives mixed messages and I as wondering if you could advise me on how to go about this and what other licenses are necessary? (I plan on having an online store, which is in the works right now, and a physical boutique as well)…

I plan on selling jewelry, clothing, accessories and other nick knacks (some of which will be hand made! I just started casting and making my own jewelry!)

I really, really hope to hear back from you! It’s so awesome reading your blog and seeing another young girl out there with the same dream and actually pursuing it!

Hope to hear from you soon.

Sincerely,
Madeline

Hi Madeline, the licenses are so tricky and confusing. Luckily my dad runs a business and knows a lot of this, so he helped me along the way.  Here’s what I had to get….

1. DBA/Fictitious Business Name
2. Wholesale/resale license
3. EID (employer ID #)
4. Zoning papers
5. Business license

And in that exact order, because you have to have certain papers before you can file the others.  I wasn’t aware that any of these things could be done online, but I wouldn’t fill ANYTHING out that doesn’t have a .gov extension, just to be on the safe side.  The only one I know of that you can do online is the EID.

The Franchise Tax Board is where I got my resale license.  I would highly suggest looking them up in your town and either going down there or calling them up and asking what you’ll need in order to get your license and where to go to get the other things on the list.  And things might be slightly different since you’re in a different state so it’s always good to ask! It’s tricky and it’s a lot of running around because I had to go to three different places and do a bit of waiting to get all of my papers.

Also, a DBA isn’t necessary, but it’s good to have.  What it does is it allows you to operate under a name other than your own, you can open a bank account in that name and it also protects your name in your own area (it’s not like a copyright or trademark though).  Your DBA will be good for five years and once you register it, you’ll need to run an ad for it in a newspaper for four weeks.  I suggest looking for smaller local newspapers and not going for the New York Times or something of the sort, because it will cost you more money that way.  They might give you a list of accepted newspapers when you register your DBA; if not be sure to ask, or make sure a paper is acceptable before giving them your money!

I hope that helps, but let me know if you have any other questions.  It’s so cool that you’re starting a boutique too! What lines do you plan on carrying?  And did you go to school for fashion?  Definitely keep us posted about the progress of your boutique and what it’s like to actually plan a physical store!

Kim

Got a question?  As always, send it in to kimberwynATgmailDOTcom.

Happy new year everyone!  It’s officially January 2008, and for that I couldn’t be more excited.  First let me apologize for not doing too much blogging recently, but I’m sure you didn’t want to read about me eating, sleeping and staring in to space.   There hasn’t been much to do but that will change very soon.  Since it’s the beginning of the year that means I’m about 3 1/2 months away from the official launch of my boutique!  So yes, hopefully this year will bring good things but as of right now it’s bringing a whole lot of excitement.

So what are the next steps for me?  I’ll be going to the Brighte market in LA in two weeks.  It’s the same market I posted about before, but this time we’re staying over and I’ll hopefully have plenty of pictures for you (if they let me!).  I have appointments with two more lines I plan to buy and I might pick up an accessories line, it just depends on how things go with my budget.

Hopefully I’ll get to go to MAGIC in February too but it’s starting to look less than likely (no biggie; I can go in August).  And then my first delivery comes 3/30.  So in March I’ll be designing my website and on getting shipping and packaging details together.  And of course lining up a photographer, and doing my first shoot as soon as the clothes come in.  So I’ll definitely have more to discuss here in the coming weeks!

Oh and one more thing…

My new years resolution: Wear less pants.

I told my parents this and they looked at me weird.  Really, I just want to stop living in blue jeans!  I always pair my jeans up with a really cute top or something layered, but I need to work in more skirts, dresses and stockings into my wardrobe.

I guess we all could work on our style a little bit this year!  Whether it be spending less money or spending more money on quality/quantity items, or whatever.  Do any of you have new years fashion resolutions? Let me know in the comments section!