How to Start a Clothing Business with Buying Wholesale (2022)

Posted 13 June 2022 in GUIDES by wholawholesale

Wondering how to start a clothing business and buy wholesale brands in Australia?

As retail sales are on the rise, you’ll want to start your clothing business as soon as possible. Establishing your business today means you’ll be in the best position to take advantage of future growth.

A “buy low, sell high” approach in this type of economy can help you grow your business quickly, turn faster profits, and create a large customer base.

But you’ll need to know how to move fast in this environment, set up the right business structure, and buy the right wholesale clothing if you want to succeed. Don’t worry, it’s not as daunting as it seems.

To help you, we’ve created a 7-step guide on how to start your clothing business, covering everything you need to know from setting up your business structure to buying wholesale. Let’s go.

Whola is a fashion wholesale marketplace that makes it easy for boutique owners to buy hot-selling inventory in just a few clicks. Shop the newest styles from our 100+ unique Australian brands. SIGN UP NOW.

HOW TO START A CLOTHING BUSINESS WITH BUYING WHOLESALE IN 7 STEPS

1. DECIDE IF YOU’RE STARTING A BRICK-AND-MORTAR OR AN ECOMMERCE STORE (OR BOTH!)

Your store type is going to impact every step in starting your clothing business. Decisions like placing wholesale orders, picking a legal entity, and defining your budget will look different depending on your store type.

The choice is a personal matter. To help you pick, consider these key differences between ecommerce and brick-and-mortar:

Overhead costs. Starting an ecommerce store is cheaper and your major expenditures will be marketing, web hosting, website maintenance, and shipping. A brick-and-mortar store has more substantial expenses like rent, insurance, staff, upkeep, and utility fees.
Merchandise returns. You’ll have higher returns and spend more time dealing with customer service in ecommerce because people can’t try before they buy. Brick-and-mortar businesses have lower returns and deal less with customer support issues.
Time. Choose an ecommerce store if you want flexibility in your working hours and location. A brick-and-mortar shop requires a fixed workplace and full-time hours.
People. In the beginning, you can run an ecommerce on your own or in a partnership. If you’re a people person, you may prefer a brick-and-mortar store to work side-by-side with your employees and serve your customers face-to-face.
Technology. Pick ecommerce if you’re tech-savvy and enjoy working with computers. However, platforms like Shopify and WooCommerce make starting an ecommerce store easy, even for beginners – you just need to be patient until you get the hang of them. If you’d rather spend less time with technology, choose a brick-and-mortar store.
Marketing. B&M stores do a lot of their advertising through their location (the storefront and the local community), which can be enhanced by social media. On the other hand, ecommerce stores rely on digital marketing for people to find their products – and organic social media is not enough. To learn how to master marketing for your ecommerce store, SIGN UP TO OUR MARKETING COURSE.

Remember, be flexible. You can always start with one type, then switch or add the other. For example, if you want to start small, pick ecommerce. You can see what works and save money, then add a physical location later on.

In addition, it’s worth supporting your brick-and-mortar store with an online presence. This is especially true for regional stores that have a strong holiday or transient trade. By having an online element to your business, you can retain your customers once they return home.

For a more comprehensive overview, read our in-depth guide on ONLINE OR OFFLINE CLOTHING STORES.

2. LAY THE LEGAL GROUNDWORK

Whether you choose an online or offline store, all Australian businesses must register with the government to operate legally.

Before we share the legal essentials for STARTING A CLOTHING BOUTIQUE, please note this is for informational purposes only and doesn’t serve as legal advice. Always consult a professional before making any decisions.

AUSTRALIAN BUSINESS STRUCTURES. Choose one of the four types: sole trader, partnership, company, or trust.
An Australian Business Number (ABN). When you start a business in Australia, you’ll need a unique 11-digit ABN to identify you as a business entity.
Tax File Number (TFN). Your TFN acts as your tax and superannuation identifier and is essential when applying for an ABN, registering for GST, and filing your taxes.
Goods and Services Tax (GST). If you expect to make more than $75,000 of gross revenue during the fiscal year, register for GST. Find out HOW GST WORKS.
Pay As You Go (PAYG). If you plan to hire and manage employees or work with contractors, you’re responsible for their tax obligations. Read how PAYG WITHHOLDING and PAYG INSTALMENTS work.
Business plan. A RETAIL BUSINESS PLAN helps you avoid risk, secure funding, and understand if your business model is viable.
Business name. Choose a unique name that will help you stand out from the crowded online and offline spaces. Check the name’s availability online and with the AUSTRALIAN BUSINESS NAMES REGISTRY and the AUSTRALIAN TRADEMARK REGISTRY.
Business bank account. A separate business bank account can help you monitor your revenue, MANAGE YOUR RETAIL CASH FLOW, organise your business expenses, and facilitate your tax obligations.

To save time and stress in your start-up phase, consider investing in a reliable accountant who can help you set up your business structure, navigate your legal obligations, and file your taxes.

3. FIND A NICHE FOR YOUR CLOTHING STORE

A niche will help you narrow your clothing choices to target a specific segment of people who share similar sizes, fashion styles, income ranges, and demographic values, such as age, location, and gender. When you identify the right niche, you’ll know your target audience so well that you’ll choose the right styles, set the perfect prices, and sell out quickly.

A well-defined niche will also shape your marketing strategy if you’re an ecommerce and define the look of your brick-and-mortar store.

Your audience can also easily identify with you and recognise their tastes in your clothing when you have a finely honed niche. You’ll create longstanding loyal customers.

Here’s how to FIND A NICHE:

Do market research. Choose an undercrowded space. See if there is a niche that’s underserved in your community if you’re a brick-and-mortar store. For ecommerce, use GOOGLE TRENDS to identify what’s in vogue. SEO tools like SEMRUSH can help you pinpoint long-tail keywords related to less competitive fashion trends.
Lean into your passions. Passions help define your audience and clothing style while nurturing your motivation. Maybe you’ll focus on organic natural fibre clothing because you care about the environment.
Identify a problem to solve. Find gaps in the market and fill them. You may want to cater to mothers-to-be because you couldn’t find chic maternity clothes during your first pregnancy.
Analyse your competitors. Once you’ve narrowed down your niche, study and benchmark your competitors. Note their strong points and weaknesses to find your competitive advantage with the same audience.

Once you pick and define your niche, test it during your first year of business. You may start with business attire for young corporate career women, but find you’re attracting professionals who are looking for casual-chic fashion.

4. CREATE YOUR CUSTOMER AVATARS

Think of customer avatars as a deeper dive into your niche to understand your customers, facilitate your decision-making, and help you buy the right merchandise. Your customer avatar will steer you away from superficial trend-based decisions and keep you focused on what drives your customers in their purchases.

You can have one or more avatars. Ask and answer specific questions to understand the nuances of each avatar, like:

What are their preferences in quality?
What lifestyles do they lead?
What are their values (for example, do they prefer organic clothing vs synthetics or locally made vs. global)?
Where do they live?
How much do they spend on clothing?

For a more comprehensive study, check out our step-by-step guide to creating a CUSTOMER AVATAR. There’s even a handy WORKSHEET included.

5. BUDGET FOR EXPENSES

You’ll need to prepare a budget to ensure the success of your clothing store. A budget can help you avoid overspending, set the correct prices to guarantee profit margins and buy the right quantities.

As we’ve seen above, ecommerce and brick-and-mortar stores will have different expenses, so your budget will look different depending on the business model you choose.

Don’t underestimate the low cost of ecommerce and remember to account for your two biggest business expenses: marketing and shipping.

Both paid and organic marketing will drive traffic to your site and turn customers into buyers. But this will take time and money. One approach is to put aside the same amount of money you would spend on a brick-and-mortar rental and use it for your ecommerce marketing spend.

Then, work your marketing and advertising expenses (or store rental and overhead costs if you’re a brick-and-mortar) into the margin of every clothing item you sell.

A good way to think about it is to reserve a percentage of the product price for marketing or overhead spend. Once you find that magical percentage, you’ll be able to ensure your profit margins remain healthy. To find out how to calculate that percentage, join our MARKETING COURSE.

For e-commerce shipping, contract with local, trustworthy providers like AUSTRALIA POST or DIRECT FREIGHT to ensure reliable, fast service. Avoid cheaper options or comparison sites because they can’t guarantee the same type of service or coverage, jeopardising customer satisfaction.

For a brick-and-mortar store, you’ll need a substantial budget as costs will be higher. If you lack the financial means, apply for funding. Check with organisations like CLEARCO, SHEEO, and PROSPA.

And remember, you can always find ways to improve your cash flow by optimising the timing of your payments. With Whola, once you’ve established your business, you can take advantage of our BUY NOW PAY LATER model and delay payment by 30 days.

6. FIND A RELIABLE WHOLESALE SUPPLIER

Now that you know your store type, niche, and budget, it’s time for PRODUCT SOURCING through a trusted wholesale supplier.

You can read our full guide on HOW TO FIND CLOTHING WHOLESALERS, but one of the best ways is to find a one-stop-shop where you can buy most of your inventory, like WHOLA. As an Australian B2B wholesale marketplace, Whola can save you time, stress, and money. Here’s how:

Fast order fulfilment. Buying locally from AUSTRALIAN CLOTHING WHOLESALERS means expedited shipping. Whola orders are dispatched within 24 hours so you can start selling immediately and optimise your cash flow.
Small minimum order quantity (MOQ). BUYING WHOLESALE CLOTHING FOR RESALE is economic only when you’re not forced to buy mass quantities, especially in your first year of business. At Whola, we’ll never push you to buy more than you need. You can start small and purchase 3-unit clothing packs.
100+ Australian brands in one place. As a one-stop wholesale clothing marketplace, Whola offers you everything you need to stock your inventory from day one.
24/7 customer service. Reach out to Whola anytime for guidance, recommendations, and purchasing advice. We have your back whether you’re a first-timer or veteran.
Geographic exclusivity. Never get caught selling the same items as the boutique next door. Whola shows you if someone in your area purchased the same stock, so you’ll always have unique pieces for your customers.
All killer, no filler. Choose from a curated selection of top-selling Australian-made men’s and women’s clothing and lifestyle brands. Whola can stock your entire store.
No subscription or membership fees. Whola is free to browse, shop, or use our customer service. Just sign up as a client, provide essential details to verify your business, and get started immediately.

7. COME UP WITH A PRICING STRATEGY

Buying wholesale is more affordable than buying single units because you get a bulk discount. This means you can set prices that turn a greater profit margin. What’s more, with Whola, you’re getting the same price as if you were buying directly from brands, without the hassle.

But don’t take your pricing lightly. The wrong pricing strategy, whether too cheap or too expensive, can turn customers away. Luckily, all the work you’ve done in the previous 6 steps is about to pay off:

Use your budget. You’ll know exactly how much inventory to buy at your maximum budgeted price to keep a steady cash flow and allow for overhead and profit margins.
Consult your customer avatar. If you’re undecided about prices, ask yourself what price would your customer avatar pay. Would they pay the higher price, or the lower one? Cheaper is not always better, especially if your avatar is Quality Conscious Carol instead of Thrifty Trendy Terry.
Return to your competitor analysis. Go back to your benchmarking and compare competitors’ pricing. Since they deal with the same niche, their pricing can act as a guide to know if you’re undercutting too much or are way off base.
Ask Whola. Our retailer success team can advise you on the best pricing strategies if you’re ever unsure.

START YOUR CLOTHING BUSINESS TODAY, BUYING WHOLESALE

Once you know how to start a clothing business with buying wholesale, it’s not as daunting as it first seems. Take one step at a time to lay your business foundation so you’ll be confident in selling your wholesale clothing when you open your doors or launch your ecommerce site.

Here’s a quick recap of the 7 steps:

Choose your business structure
Know your legal obligations
Find a niche
Create your avatars
Define your budget
Find your wholesaler
Decide your pricing strategy

And remember to use a reliable wholesaler like Whola to stock your entire store with quality fast-selling brands.

FAQS ABOUT HOW TO START A CLOTHING BUSINESS WITH BUYING WHOLESALE

HOW DO YOU GET CLOTHES IN BULK?

To get clothes in bulk, buy them wholesale! On Whola, you can get the best Australian brands at exactly the same price as if you were buying from the brands directly. While some wholesalers will have a minimum order quantity (MOQ) and you may wind up buying more than you actually need and be stuck with out-of-season stock, Whola allows you to place small-unit orders with no overall minimum. That way, you can buy only what you need when you need it.

HOW DO I START A CLOTHING BUSINESS?

To start a clothing business:

Choose an ecommerce store. Your overhead costs will be lower than those of a brick-and-mortar store.
Buy wholesale. Use the “buy low, sell high” approach to increase your profit margins. But buy from B2B specialised wholesalers like Whola to avoid the high minimum order quantity (MOQ) that many wholesalers apply.

WHAT IS THE BEST WHOLESALE CLOTHING WEBSITE?

Whola is one of the best wholesale clothing websites. You’ll have:

A variety of 100+ Australian labels to choose from.
Orders dispatched within 24 hours.
Option to order small packs so your stock will always be in style and you won’t get stuck with out-of-season stock.
24/7 customer service and online shopping.