How to start an online fashion retail business in Australia

Posted 19 May 2022 in GUIDES by wholawholesale

Ecommerce is a great route to take as a budding entrepreneur thanks to its quick set-up, low startup costs and a high potential for profit.

As online shopping gradually becomes the norm, there may never be a better time to launch your online fashion retail store.

Starting an online business in Australia is pretty straightforward. But it involves a lot of steps and can feel overwhelming when you try to do it all by yourself.

To help you out, this part of our series on HOW TO START A CLOTHING BOUTIQUE will take you through everything you need to get your online business up and running, step by step.

We’ll start from your legal obligations and guide you all the way through the journey, with helpful online marketing tips for guaranteed success.

Disclaimer: This guide is for informational purposes only and is not intended to act as legal advice. Please consult a lawyer or accountant to guide you through the legal process of setting up an online retail business.

Whola is a wholesale marketplace that makes it easy for online and offline fashion businesses to buy hot-selling inventory with just a few clicks. SIGN UP NOW and start shopping for the newest styles from our 100+ unique Australian brands!

IS THIS A GOOD TIME TO START AN ONLINE BUSINESS IN AUSTRALIA?

While online shopping has been steadily growing for many years, COVID-19 restrictions caused a spike in its popularity. With brick-and-mortar stores forced to remain shut in many parts of Australia and the world, consumers turned to online channels.

According to a 2021 REPORT, Australians spent over $48.1 billion on online shopping between May 2020 and May 2021. This accounts for around 13% of total retail sales (while in 2019, this number was only around 9%).

Of course, the pandemic isn’t the only reason for this shift. Online shopping is just more convenient for our everyday lives. All you need is a smartphone or laptop and you can purchase anything with just a few clicks.

From the business owner’s point of view, running an online store can be more manageable, especially if you’re a first-time entrepreneur. Startup costs are much lower and you don’t have to worry about having to shut your doors during lockdowns. To learn more about the benefits, read our article on ONLINE VS. OFFLINE CLOTHING STORES.

As a result, if starting a fashion retail business is your dream, now is a great time to jump in and launch your own ecommerce store. Before you start to feel overwhelmed, here’s a simple breakdown of all the steps you’ll need to take.

HOW TO START AN ONLINE BUSINESS IN AUSTRALIA IN 9 STEPS

1. CHOOSE A BUSINESS STRUCTURE

First, you need to choose a business structure that best suits the intention and goals of your retail business. There are 4 main business structures commonly used in Australia, each with its own taxes, asset protection and costs:

Sole Trader: The simplest and cheapest business structure. You are the sole owner, so you are responsible for all payments, debts and losses. You report your tax return using your individual Tax File Number (TFN).
Partnership: Shared ownership by two or more people. Income or losses are shared between partners and each partner pays tax on their share of the net income. Relatively easy and cheap to set up.
Company: A legal entity that is separate from you. More complex and expensive to set up. Companies are managed by directors, owned by shareholders, regulated by the Australian Securities & Investments Commission (ASIC) and report annual tax returns to the Australian Taxation Office (ATO).
Trust: A trustee holds the business for the beneficiaries. All responsibility lies on the trustee (which can be an individual or company). Trusts are very complex and expensive to set up. Tax payment depends on how the income is distributed.

For more information, go to the website of the Australian government where you’ll find in-depth explanations of each TYPE OF BUSINESS STRUCTURE and its advantages and disadvantages.

Remember to always consult a lawyer or accountant before making a decision about your legal affairs. These professionals can offer tailored advice on what business structure is right for you.

2. APPLY FOR AN ABN AND REGISTER YOUR BUSINESS NAME

Now that you’ve chosen your business structure, it’s time to start the official proceedings.

First, you’ll need to apply for an Australian Business Number (ABN). This is a unique 11-number code that will allow the ATO to identify you as a business. You can find more information about applying for an ABN HERE.

At the same time, you need to choose a name for your business. This is an exciting part of the process but it’s important to remember some key things to make sure your business will thrive in the future:

Choose a unique name. Settle on something that’s unique and reflects your business – you want to stick out from the crowd with a name that customers will remember.
Check availability. Make sure your business name isn’t already registered. You can use websites such as ABN LOOKUP to help you.
Choose something scalable. Think long-term. Is the name available overseas? Will it make sense in other countries? Does the name restrict you to a specific product or service?
Be consistent. Your business name should appear the same everywhere so your customers can easily recognise you. Use the name consistently across all your marketing materials, website, social media, etc.
Trademark your name. You can do a search HERE to make sure your name is not already trademarked in Australia. You don’t want to get a cease and desist from an existing business using the same or similar name!

3. REGISTER FOR TAXES

Depending on your retail company’s business structure and income distribution, you’ll have to register for specific taxes. Here are some of the most common business taxes in Australia:

GST (GOODS AND SERVICES TAX): Usually, companies register for this if they have a gross turnover of $75,000 or more in a year (or are expecting to pass this threshold).
PAYG (PAY AS YOU GO) WITHHOLDING: To withhold a certain amount of tax from employee pay to send to the ATO. You must register for this tax before your first payment.
PAYG (PAY AS YOU GO) INSTALMENTS. Pay regular instalments throughout the year, so you don’t have a large tax bill at the end of the tax year.
FBT (FRINGE BENEFITS TAX): Suppose you pay fringe benefits to your employees, such as a company car, expenses or health insurance. In that case, you may have to apply for FBT.

Again, make sure to talk to a lawyer or accountant to understand which taxes you should register for. And remember, all businesses need a Tax File Number (TFN) before registering for taxes.

4. CHOOSE A UNIQUE DOMAIN NAME

Now that you’ve successfully registered your business and applied for the right taxes, it’s time to start building your ecommerce store.

The first port of call is your domain name, i.e. the web address for your company that customers will use to access your website.

Your domain name should be branded and SEO-friendly. SEO or Search Engine Optimisation is the process of making your website easy to discover in search engines like Google. Next to factors like your website’s structure and content, domain names also have an impact on SEO.

The perfect domain name should:

Include your business name. This is crucial so customers can easily identify your brand and find your ecommerce store online.
Include a relevant keyword. This is not a must – in fact, search engines don’t like Exact Match Domains (EMDs) that are just a keyword, for example, buywomensclothingonline.com. However, keywords are good if you can find a way to organically work them into your domain name (alongside your business name) because they help to tell searchers what your website is about. For example, [brand-name]-boutique.com.
Choose the right domain extension. The domain extension – also called a Top-Level Domain or TLD – is the last part of the domain name that comes after the final dot. The most commonly used TLD is .com. While .com is a good choice for most businesses, it’s important to consider that choosing a specific country code TLD (like .au for Australia) may help you rank higher in search engines because it tells them what country your website is targeting.

5. BUILD YOUR ONLINE STORE

Building your online store can be very cost-effective if you use the right tools and take the right steps. You can use a DIY store builder to set up your ecommerce boutique, even if you don’t have any experience in web development.

Here are some of our favourite tools:

Shopify: Offers a drag-and-drop page builder, 24/7 web support and a range of free and paid templates.
BigCommerce: Offers customisable storefront, powerful built-in tools and a great ecommerce support centre.
Wix: Offers over 500 unique design templates, a range of in-built features and is an easy-to-use tool that’s beginner-friendly.

Which store builder you choose will depend on your individual taste – for example, some people prefer the BigCommerce interface to Shopify and vice versa. Our tip is to watch a few tutorials of each ecommerce platform on YouTube before you sign up to see which one you like best.

Once you’ve picked a store builder, you’ll need to complete a few more steps before you can launch your ecommerce store:

Choose a store layout or theme. Store builders such as the ones listed above will offer a variety of layouts and themes that you can customise for your business.
Add your product pages. This is where your customers will spend the most time. Always remember to add high-quality images of your items with useful product descriptions that include plenty of keywords for SEO.
Add other pages like your Homepage, About, FAQs, Contact, Policies, etc. These pages will contain all the essential information that your customers need to know. For example, the Policies page will explain your shipping and return policies.
Choose a payment provider and connect it to your online store. Two of the most commonly used payment providers are Paypal and Stripe.

If you need a step-by-step tutorial on how to set up an online store with Shopify, check out our MARKETING COURSE. Experienced ecommerce marketers will teach you the ins and outs of building an ecommerce store so you can do it yourself even if you’re a complete beginner.

6. FIND A WHOLESALE CLOTHING SUPPLIER

How you buy and what you buy will have a direct impact on the success of your ecommerce boutique.

First of all, make sure that you have your CUSTOMER AVATAR in mind before you make any decisions about what styles to purchase.

Secondly, find a wholesale clothing supplier that caters to your needs and helps you de-stress the buying process instead of trying to upsell you.

As you do your scouting, check out our articles on HOW TO FIND A CLOTHING WHOLESALER and the TOP 10 AUSTRALIAN CLOTHING WHOLESALERS. Or, you can GET STARTED WITH WHOLA NOW!

Whola is a B2B online fashion marketplace with over 100 unique Australian brands and thousands of styles to choose from. Unlike other wholesalers, we have no minimum order quantities and we’re open 24/7, so you can buy only what you need when you need it.

Our support team is always ready to guide you through your fashion buying journey and suggest new styles to add to your inventory. We only carry handpicked, fast-selling styles, so you never get left with dead stock.

In addition, we aim to dispatch all orders within 24 hours so you can refresh your store as quickly as you need. As a result, Whola will be your best friend during the HOLIDAY SEASON!

If you need more tips on building a solid buying strategy, check out our guide to PRODUCT SOURCING.

7. CHOOSE A SHIPPING PROVIDER

In the beginning, your shipping process should start out simple and gradually evolve as your business grows.

Start off by bulk-buying satchels from your post office, packaging orders yourself and dropping them back to the post office for shipping. Once you’re sending more than 4 parcels per day, you can arrange post collections from your location.

At this point, you should look to negotiate a corporate contract with a reliable provider (Startrack, Australia Post or Direct Freight). Always choose a provider that has an easy-to-use platform, which will make things a lot easier in the long run.

Avoid companies such as Sendle and aggregator sites – although they may be cheaper to use, they will ultimately cause customer dissatisfaction with slow delivery and poor customer service.

8. RUN ONLINE MARKETING CAMPAIGNS

Digital marketing is the lifeblood of every ecommerce business.

For an effective ONLINE RETAIL STRATEGY, you need to have an online marketing budget. You should take whatever you would spend on rent if you had a physical store and spend it on online marketing.

Of course, driving sales online is a highly complex process and goes beyond sharing a couple of social media posts a day. For a good return on investment, you’ll need a strategy that has multiple pillars like SEO, social media ads, email campaigns, influencer marketing and more.

But how do you even get started? Big brands have teams that specialise in different areas of marketing. And you’re just one person trying to get your ecommerce business off the ground.

The good news is, there are proven formulas that work. One way to get access to them is through trial and error – but be prepared to lose lots of time and money. However, if you’d rather set yourself up for success from the get-go, you should sign up for our MARKETING COURSE.

We created this course in collaboration with the online marketing experts at King Pixel Digital Marketing to help budding business owners like yourself build DIY marketing strategies.

The course includes 75 lessons (made up of videos and written materials) with everything you need to skyrocket your ecommerce sales.

You’ll learn how to:

Get started with Shopify.
Run paid ads on Facebook.
Feature your products on Google Shopping.
Automate your email campaigns.
Plan your influencers marketing campaigns.
And much more.

ENROL TODAY and get a discount if you’re a Whola customer (limited-time offer).

9. TRACK YOUR ECOMMERCE KPIS

Continuously tracking and optimising your business performance is crucial. Otherwise, you’ll just fumble around in the dark. You won’t know why your sales are dropping and what you can do about it; or why they’re soaring and how you can keep them up.

To stay on top of your performance, be sure to track your ecommerce KPIs (Key Performance Indicators). These should be tied to the overall business goals you described in your RETAIL BUSINESS PLAN.

Ecommerce platforms like Shopify have dashboards full of insights that you can monitor and use to make important decisions for your business. Here are just a few of the most-used ecommerce KPIs and what they mean:

Conversion rate: This relates to the number of users that go from being a passive user of your website (just looking), to actively interacting with it (buying products). If your conversion rates are low, you may need to create a more enticing homepage or special deals that encourage customers to buy.
Average order value: This is the average amount of money customers spend each time they place an order on your ecommerce website. If your average order value is lower than expected, you may want to consider offering free shipping over a certain amount or deals such as 3-for-2 or BOGOF (Buy One Get One Free).
Cart abandonment rate: This is the percentage of customers who get to the checkout with their order but abandon their carts last minute. A high cart abandonment rate may suggest that your prices are too high. Consider reviewing your prices and use email retargeting tactics to get customers to complete their orders.

EXAMPLES OF GREAT ONLINE CLOTHING STORES

Now that you know how to start an online business in Australia, let’s look at some examples of fashion retailers that have been there, done that.

Let yourself get inspired by these Whola customers who know how to do ecommerce right:

GINGHAM & HEELS

GINGHAM & HEELS was launched in 2003 in Sydney as a small business and has since become an established brand with a successful online store. They offer beautiful, classic, easy-to-wear pieces for women of every generation. From outerwear to accessories, Gingham & Heels provides its customers with a complete look that maintains a classic, feminine style.

BILLY J

BILLY J in an online fashion boutique founded in 2014 with an HQ on the Sunshine Coast. They offer a range of trendy, feminine pieces for every woman. With inspiration from the Sunshine Coast, their range of flattering pieces from dresses to sleepwear has customers falling in love.

SHUSHU BOOSE

SHUSHU BOOSE was started in 2018 as Bust Boutique, an online store that catered to fuller-busted body types. It has since grown into Shushu Boose, a store that carries fresh styles for women of all shapes. Their items are proof that you don’t have to sacrifice style for comfort and their beautiful ecommerce store showcases them in an irresistible way.

CONCLUSION: HOW TO START AN ONLINE RETAIL BUSINESS IN AUSTRALIA

There is no better time to start an online retail business than now. Follow these 9 steps to turn your business idea into a lucrative ecommerce store:

Choose a business structure.
Apply for an ABN and register your business name.
Register for taxes.
Choose a unique domain name.
Build your online store.
Find a wholesale clothing supplier.
Choose a shipping provider.
Run online marketing campaigns.
Track your ecommerce KPIs.

FAQS ABOUT HOW TO START AN ONLINE BUSINESS IN AUSTRALIA

DO I NEED A LICENSE TO SELL CLOTHES ONLINE IN AUSTRALIA?

If you are selling wholesale clothing online as a business, then you will need to obtain the necessary licenses to do so. In most cases, this is a simple business license. As long as your supplier is fully registered, documented and verified, you are safe to resell. Always ask your supplier for documentation of their licenses.

HOW DO I START AN ONLINE BUSINESS FROM HOME IN AUSTRALIA?

Starting an online business from home is more straightforward than you think. Simply start by registering your business and acquiring all of the necessary documentation, licences and permits. Once the legal obligations are fulfilled, you can begin creating your online store website and stocking your items.

WHAT ARE THE STEPS TO START AN ONLINE BUSINESS FROM HOME?

There are 9 steps to take your fashion business from an idea all the way to a fully functioning ecommerce. 1. Choose a business structure, 2. Apply for an ABN and register your business name, 3. Register for taxes, 4. Choose a unique domain name, 5. Build your online store, 6. Find a wholesale clothing supplier, 7. Choose a shipping provider, 8. Run online marketing campaigns and 9. Track your ecommerce KPIs.