Research shows that the online apparel industry is booming continuously, and shows no signs of slowing down. According to Statista, the apparel and accessories e-commerce sector will generate over $153 billion in revenue by 2024. 

That’s a 50% growth in just a few years!

But as profitable and promising as it may seem, a lot goes into starting a boutique than what catches the eye. For starters, the biggest challenge is figuring out the optimal inventory quantity for starting a clothing boutique. 

Note that a slight mistake in inventory planning can prove costly down the line. In 2018, for instance, US retailers lost a staggering $300 billion to poor inventory management decisions. 

So, How Much Inventory Should You Start With?

There is no hard and fast rule for selecting the optimal inventory size for starting a clothing boutique. Experts recommend you start small to get a gauge for what people want. 

Starting big can show your potential, but if the products don’t sell, it will be difficult to recoup the money lost. Plus, stocking too many products upfront will add extra admin costs and complicate the web setup and product photoshoot.

It takes research and planning to arrive at the optimal inventory figure to start with, but any retailer can ace it with the right information at hand. Below are some tips to help you determine how much inventory you need to start your own boutique.

1. Decide Your Budget for Inventory

Emily Casseday, the founder of Blush Boutique Co, describes how they started the company with under ten thousand dollars. 

“We wanted to test the waters first to see if we had a viable business for our community,” says Emily. This statement underscores the importance of starting small, then scaling later as the business establishes a footing in the market. 

According to Emily, one of the biggest mistakes a business can make is carrying too much without enough income to cover the costs, which is why they started the boutique in her basement instead of fully going brick and mortar. 

Drawing from Emily’s story, we can deduce that the inventory to carry should be a fraction of your budget. A good practice is to divide the total amount of available funds amongst your startup costs. In most cases, 25% of the starting budget is set aside for inventory.  

2. Find the Right Clothing Vendor

Finding the right vendor can also help you determine the right amount of inventory you need to get started. 

You want to make sure you’re balancing the quality of supplies with your budget. Finding a clothing vendor isn’t difficult. The tricky part is finding a clothing supplier with sufficient supply, suitable price, and beautiful quality. 

Here’s how to find clothing vendors.

• Learn about the distribution channels of clothing industries

• Use the internet to find wholesalers

• Subscribe to trade publications and newsletters

• Join groups, forums, and professional networks with similar interests

• Attend trade shows regularly

Make sure to analyze the different options and compare the prices offered by different vendors. Your choice of vendors will determine the amount of inventory that can be purchased with a given budget.

3. Define a Storage Space for Your Clothing Store

Storage space is a major expense for many businesses, and clothing retailers are no exception. Before purchasing inventory for your boutique, think about how and where you’re going to store it and factor in the cost of renting a storage space. 

If you plan to sell clothes in bulk, designate a place to store the merchandise when it arrives. The space needs to be large enough to leave a room for organizing orders.

Depending on the availability, cost, and convenience of storage in a given area, you might need to adjust the inventory size to match the available resources. Hence, knowing how much it will cost you to pay for storage can help you determine the right amount of inventory to purchase. 

4. Inventory Risks and Rewards

Owning a business involves both risk and reward. 

That said, before ordering any inventory, make sure the potential rewards (in terms of profits) outweigh the risk (of investing in products that won’t end up selling)

Decide first: risk or reward? Which one is more important to you?

Limiting risk in terms of inventory investment or capitalizing on the potential rewards by purchasing stock in large quantities? 

Investing in more stock can lead to bigger profits, but only if a retailer can sell the products. To make a more informed decision about the right amount of inventory to purchase, it’s important first to establish how much one is willing to spend. 

The Bottom Line

Unfortunately, there is no laid down formula to determine the optimal inventory quantity required to start a boutique. But by following the tips mentioned above, you’ll be able to arrive at an accurate figure for the right amount of inventory to purchase.

If you're still unsure about how much inventory you need to start a boutique, know that Mirta can guarantee you a sufficient supply, a fair price and beautiful quality. Check out our website to learn more!