There are basically 3 types of boutiques in terms of the way they stock goods – consignment boutique, regular buy and sell retail boutique, and the franchisee boutique
A consignment boutique will stock goods manufactured by other designers or manufacturers and will take a percentage as their share when the item is sold.
The consignment model means that you do not have to need initial money for the inventory but the profit share will be much lower than buying and selling. The consignment stores operate at a volume model which means you will have to sell a lot of goods for a decent profit. This type of store is a good option if you do not have the initial investment money to buy merchandise. And you need a sense of where to buy clothes to start a boutique You will have to seek designers or factories ready to keep goods in your shop to sell.
The buy-and-sell boutiques will buy goods at a wholesale price from manufacturers or distributors and sell them at a higher markup to customers. This model of boutiques will make a much higher profit at the end of the day but you need a large initial investment to buy merchandise. You will have to develop a relationship with wholesalers and get the best price so that you can make more profit. You may have to buy bundles / large quantities of the same style to get this discount ( Minimum order quantity). You will be making more money with this model than the consignment boutique.
The franchisee boutique will be operating under a large brand name and will exclusively sell that brand. A franchise fee (one time as well as annual) will have to be paid to the parent company to use the brand name and logo etc and be allowed to sell their merchandise.
This model needs a lot of initial investment as you will have to give a franchise fee to the company as well as keep up the quality standards as specified by the company in terms of decor etc. You have the advantage of already developed brand awareness, company advertisements, etc, and may not have to convince customers to buy the products as much as if you were starting a new line.
The fourth type of boutique can be the retail outlet of a production house. This will involve a lot more initial investment than the other three. You will be procuring fabric and making clothes and then selling – so labor cost, material costs, and production costs on top of the cost of setting up the shop. The reward will be all the more if you are successful.
Future planings for your boutique
Ok, your boutique is open and people are buying. But do not rest on your laurels. Think about expansion as soon as you open.
No, that does not mean you open 4-5 stores at once. But think long term as soon as you have started. This will expand the possibilities of your business.
If not more stores, you can expand the fashion lines you carry, open an online store or even sell through Facebook, start a stitching unit, embroidery unit, or designing unit, sell jewelry and other accessories, tie up with designers for fashion shows and other events so that word goes out.
Starting a boutique is only a fraction of the work. Maintaining the store and making the boutique a success takes a whole lot of determination, hard work and a little bit of luck. Best wishes.
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