How to Start a Boutique Business: A Complete Step-by-Step Guide

There’s a lot that goes into starting a boutique business.

First, you have to make some big decisions — like choosing a promising niche and profitable products to sell. Then, you need to figure out how to build an online store (or set up a retail location), create an eye-catching brand identity, and (let’s not forget) generate sales.

And heck, you may even be wondering, “What is a boutique business exactly? Is owning a boutique business profitable? How much does it cost to start a boutique anyway?” In this complete playbook, we give you the answers to all these questions and more as we show you how to start a boutique business, step-by-step.

There’s a lot to learn about how to start a boutique — and even more to do. So, start small and stick with it — starting an online boutique may just be the best thing you ever do.

Now that you’re prepared, let’s dive in!

How to Start a Boutique – Step 1. Brainstorm Boutique Business Ideas

What’s the first step in your boutique business plan? Choose a niche.

Every successful boutique operates in a niche and has a clearly defined target market. For example, a run off the mill ‘fashion’ store is pretty broad — and as a result, it would be challenging to stand out from competitors and connect with customers on a personal level.

On the other hand, a romantic, feminine, vintage fashion boutique like Adored Vintage caters to a clearly defined niche. This makes it easier for the business to capture the attention of its target customers.

But which niche should you choose? In short, one that you’re passionate about — or at least knowledgeable or interested in. 

Why? Because having niche expertise is very helpful. However, you don’t need to have all this knowledge and expertise right now. You can start a boutique online and acquire the expertise as you go.

To continue with our example, Rodellee Bas, the founder of Adored Vintage, settled on a passion project that allows her to express her creativity. On her website, she writes, “I’m inspired by art, history, and mostly by nature and flowers. I love sharing things of beauty and telling stories, and Adored Vintage allows me to do that.”

Finally, before you settle on a niche and choose a business idea, it’s best to do some fundamental market analysis. For example, you could:

• Define your target market — who they are, how they think, what they want, what they dislike, etc. 
• Identify your main competitors and evaluate their strengths and weaknesses. 
• Define the market demand you’re targeting and the solution your boutique offers.
• Clarify how’ll you’ll differentiate your boutique from competitors.

How to Start a Boutique – Step 2. Create a Boutique Business Plan

Once you’ve selected a niche, you may be tempted to start researching products to sell or build a website right away. Not so fast! It’s well worth taking some time to create a boutique business plan first.

Your boutique business plan should lay the foundations for your business success by defining:

• Your business goals
• The strategy and methods you’ll use to achieve those goals
• A timeline that outlines your plan of action, step-by-step

Here’s a pro tip: Don’t skip this step.

The process of solidifying a boutique business plan will help you spot problems and challenges before they become a reality — this will empower you to prevent them or to at least be prepared to deal with them.

Or, to put it another way, forewarned is forearmed.

A thorough boutique business plan can also help you alleviate anxiety and analysis paralysis. Because instead of trying to make decisions on the go, you can spend dedicated time strategizing and planning. Then, once you’re happy with your plan, you can focus your energy on taking action.

When creating a business plan, try to define how you’ll approach each of the critical aspects of your business, including:

• Company and brand identity
• Products and/or services
• Logistics and operations
• Marketing
• Financials

You may also like to create an executive summary to distill your key insights and action items. 

For more help, check out Shopify’s free business plan guide.

How to Start a Boutique – Step 3. Brand Your Boutique Business

Now comes the fun part: It’s time to brand your boutique business. This step includes:

• Choosing a boutique business name
• Securing a website domain
• Defining your brand’s ‘look’
• Creating a boutique business logo and other brand assets

For many, choosing a boutique business name is equal parts fun and agony. However, you can take the pain away by using Shopify’s boutique name generator.

Your boutique business name will hugely affect people’s first impression of your business, so try to find one that:

• Is memorable
• Represents your brand identity
• Resonates with your target market
• Has an available domain name

This last point is crucial if you want to start an online boutique, as it’s best to have a business name and website domain that are the same. You can search and secure domains using Shopify’s free domain tool.

After you choose a name, the next step is to define your brand’s visual identity — this is the ‘look’ and ‘feel’ of your brand. You may also want to create a boutique business logo — especially if you’re producing your own products.

Don’t forget, much of a boutique’s appeal lies in its sense of quality and attention to detail. In other words, appearance matters. So, again, try to develop a look and logo that catches the eyes of your target market and is representative of your products and niche.

Silk and Willow is a good boutique business example. Its name perfectly represents the boutique’s eco-conscious, handmade, luxury wedding products. And the brand’s visual identity encapsulates its elegant, vintage, and nature-inspired splendor. Also, notice how the boutique’s logo is simply the name in a well-chosen font?

In another example, Province Apothecary is a name that evokes a sense of quality and attention to detail. The brand also chose a modern and energizing look to represent its line of nourishing skin products. Again, this boutique opted to use the name for the logo.

Okay, but what if you’re not the most talented designer? Well, you can always keep it simple with well-chosen fonts and colors.

Plus, if you want to create an amazing logo, just use Hatchful. This free boutique logo maker enables anyone to create a professional logo and other brand visuals in minutes (including banner images optimized for various social media platforms).

How to Start a Boutique – Step 4. Source Products

For many new boutique business owners, sourcing products may be the most challenging stage of all — especially as there are seemingly limitless options out there.

Now, there are a few ways to source products, and each one will heavily affect almost every aspect of your business — so it pays to focus during this stage and to choose wisely.

Here’s a quick outline of four popular product sourcing methods that you can use for your boutique business:

• Manufacturing: Design original products and partner with a manufacturer to have them made. Although manufacturing can be expensive and time-consuming, it offers higher profit margins and the most opportunity to differentiate your products from competitors’. (You can find manufacturers on business-to-business (B2B) marketplaces like Alibaba.)
• Buying wholesale: Buy products in bulk and resell them to consumers at a higher price. With this product sourcing method, you need to invest money upfront to purchase inventory. The profit margins are usually higher than the last two options below. (You can search for boutique clothing on Handshake — a leading wholesale market full of hand-selected vendors.)
• Dropshipping and printing-on-demand: By partnering with a third-party supplier and fulfillment provider, you can avoid investing in inventory upfront. However, profit margins are usually relatively low, and it can be difficult to differentiate your products from competitors’. (A way to stand out is to source unique dropshipping products from USA suppliers on Handshake.)
• Cutting-and-sewing: Hand-make products — often to order. This option is undoubtedly the most labor-intensive in the long run. However, it can also be the most creatively rewarding product sourcing method.

For more help, check out our full-length guide on how to source products.

How to Start a Boutique – Step 5. Price Your Products

Once you’ve selected your products, work on your pricing strategy.

This step is super important: If you price your products too high, you could hurt your sales, but if you price them too low, you may not make a profit — or worse, you could end up losing money.

Pricing products is part science, part art. And there are many different pricing strategies out there. So, if this is your first-time pricing products, consider keeping it simple by using a ‘cost-plus’ pricing strategy — in other words, markup products using a fixed percentage.

But before you can identify an effective markup percentage, you must calculate your cost per unit (CPU). This is the amount of money it costs to source and sell one product.

To calculate your CPU, add up every cost associated with sourcing and selling your products and divide it by the number of units you bought. Remember to include all fixed and variable costs, such as:

• Product sourcing costs
• Shipping and storage costs
• Customs, fees, and taxes
• Website fees
• Marketing costs
• Percentage of damaged items
• Estimated returns

When you’ve calculated the CPU, you can use a cost-plus profit margin calculator to help you add a healthy profit margin to each product. Many businesses use a 50% margin, which is often referred to as a “keystone” margin. With a 50% margin, the price is double the CPU.

To learn about other pricing strategies, check out Shopify’s in-depth pricing guide.

How to Start a Boutique – Step 6. Build a Boutique Business Online Store

So, you have a plan, you branded your business, and you sourced products, what’s next? Now it’s time to build an online store (and/or set up a physical retail space).

Shopify is the most popular ecommerce website solution in the US. It enables anyone to start an online store and supports business owners with a comprehensive and intuitive suite of tools. 

For example, along with an ecommerce website builder, Shopify also offers:

• An integrated inventory management and Point of Sale (POS) system to take sales in-person — perfect for brick-and-mortar boutiques, market stalls, or popup stores.
• A suite of more than 6,000 apps to extend the functionality of your store in virtually any way imaginable.
• Free online business courses and other educational materials to help you achieve boutique business success.

If you’re thinking that it can’t get any better, get this: the platform provides a free 14-day trial and then starts at just $29 per month. To get started, sign up here.

Once you’re set up, choose a Shopify Theme to begin customizing your website’s design. Then use the platform’s drag-and-drop editor to improve your website’s functionality and appearance. 

Next, check out the Shopify App Store and consider using some of the apps available to you. For example, you may want to use apps to add social media feeds, an email marketing integration, or additional shipping options. Whatever you may need for your boutique business, Shopify’s got your back.

Then comes the fun part — add your products, configure your shipping preferences, and set up your payment and tax options (you can visit Shopify’s Help Center for in-depth guidance). 

Finally, make sure to demo your store before you launch your boutique business, and place a real order to ensure that everything works smoothly.

How to Start a Boutique – Step 7. Promote Your Boutique Business

When you get to this point, congratulate yourself — you’ll have come a long way! However, perhaps the most significant hurdle of all now looms over you: getting sales.

In this section, we’ll explore how to promote a boutique business in five ways to help you market your products and land sales.

But before we get to it, here’s a top tip: There are many Shopify marketing apps explicitly and brilliantly designed to help you get sales — so make sure to research which ones make sense for your boutique business.

1. Run Online Ad Campaigns

Online platforms like Facebook, Instagram, Pinterest, Google, and YouTube provide an unparalleled opportunity for promoting and growing boutique businesses. These advertising channels make it possible for you to create hyper-targeted ads to land sales.

In particular, Instagram Ads’ emphasis on visuals makes it a fantastic advertising channel for boutiques.

2. Promote Your Brand on Social Media

Social media marketing provides you with the perfect way to engage potential customers, promote your products, and share brand messaging with your target market.

For example, Flourist sells freshly milled flour and premium dry goods. On its Instagram profile, the brand features behind-the-scenes content, product promotions, launches, as well as competitions.

3. Partner With Social Media Influencers

You can partner with social media influencers to promote your brand and products to their followers. In the example below, Justin Livingston promotes the department store chain Saks to his 300K followers.

Now, if you don’t have much money to invest in influencer campaigns, you can always partner with influencers who have smaller audiences. For example, the menswear-inspired androgynous fashion brand Kirrin Finch partnered with Becca Jaye to promote its collection to Becca’s 9.6K followers.

4. Invest in Public Relations (PR)

PR is the practice of building relationships with bloggers, journalists, and podcasters to spread a marketing message through their channels.

PR typically works better for brick-and-mortar stores than for online stores because it’s relatively easy to attain press coverage in small local publications and radio stations.

It’s also a good marketing method for boutiques looking to sell wholesale. In an interview, Julie Clark from Province Apothecary speaks about the brand’s PR experience: “Someone would see us in a magazine or newspaper and reach out to us to carry us. It helped to expand the brand quickly.”

Consider whether some local PR could help your business get off the ground.

5. Start Email Marketing

Email marketing provides a way to connect directly with your boutique’s customers. 

Plus, according to Litmus, a whopping 78% of marketers said email is important to overall company success. Enough said, right? 

So, install an email marketing app to start collecting email addresses asap!

How to Start a Boutique Business: 5 FAQs 

What Is a Boutique Business?

A boutique business is a relatively small shop (online or offline) that sells specialist (and often premium) products to a clearly defined market segment. Boutique businesses typically prioritize quality over quantity. Because of this, a boutique usually has a small range of high-end products and provides an excellent and often luxurious customer experience.

Although plenty are fashion-related, there are many types of boutique businesses — from pet supplies to premium dried foods.

Is Owning a Boutique Profitable?

Starting an online boutique business can be very profitable. For context, according to Statista, online fashion sales accounted for nearly 30% of total retail ecommerce sales in the United States in 2019. Plus, ecommerce apparel sales were projected to reach almost $100 billion in 2021.

Of course, like any business venture, there’s no guarantee that starting a boutique business will be profitable. Every successful business requires effective planning and execution — as well as a dash of luck!

How Much Does It Cost to Start a Boutique?

It can cost anywhere between $0 and $100,000 to start a boutique business, depending on the sales channel and product sourcing method you choose.

For example, here’s how to start a boutique with no money using the dropship model, which allows you to sell products online without purchasing them upfront:

• Sign up for Shopify’s 14-day free trial
• Use Oberlo to add products to your online store
• Use an organic (i.e., ‘free’) marketing method to generate sales, such as social media marketing

Alternatively, you could invest up to $100,000 in a large amount of premium inventory, a physical retail space, and paid advertising campaigns. Successful brick-and-mortar boutique owner and vlogger Alli Schultz spent $48,000 to start a brick-and-mortar boutique business.

Ideally, you want a few thousand dollars to get started. That way, you can invest in high-quality wholesale inventory via a platform like Handshake. You could also hire Shopify Experts to help optimize your online store and run paid marketing campaigns to generate your first sales.

How Much Inventory Do I Need to Start a Boutique?

Wondering how much inventory you need to start a boutique? Less is more. Remember, boutiques focus on providing quality, specialist products. So, each product should be carefully selected to meet your target market’s needs and wants.

Still, the amount of inventory you need depends mainly on the type of boutique you’re starting. If you’re starting a brick-and-mortar clothing boutique, you’ll need enough inventory to fill your retail space — when Alli Schultz started, she spent $30,000 on inventory alone.

If you want to start a boutique online, you can be more flexible. For example, you may want to focus on selling a handful of specialist products like bohemian apparel — or perhaps you’d like to start a one-product store.

If you’re unsure, aim to start with 1 to 5 ‘main’ products — these are the products you’ll feature in your marketing campaigns. You may also want to have up to 15 other products in your store. This will help you increase your average order value (AOV) with upsells and cross-sells.

5 of the Best Online Boutique Examples

If you’re looking for online boutique inspiration, look no further. Here are five of the best online boutiques to learn from:

• Kirrin Finch: Eco-conscious menswear-inspired clothing made in NYC
• Adored Vintage: Romantic, feminine online clothing boutique
• Silk and Willow: Sustainable wedding decor for the eco-conscious bride
• Province Apothecary: All natural, organic beauty, cosmetic, and personal products
• Flourist: Freshly milled flour and premium dry goods

Summary: How to Start an Online Boutique

Learning how to start a boutique can be an overwhelming process at first. So, set yourself up for success by taking it step-by-step and doing your homework along the way.

In summary, here are seven steps to starting an online boutique:

• Choose a niche and a target market
• Create a boutique business plan
• Brand your boutique business
• Source products (with Handshake)
• Price your products strategically
• Build an ecommerce website (with Shopify)
• Market your products and brand to get sales

What type of boutique business do you want to open? Let us know in the comments below!