If you've got an interest in fashion and clothing, running a lingerie shop could be the right choice. Get the essentials for starting up and running your own business in our practical guide.
- Research your target market
- Selling on eBay and Amazon
- Decide what to sell
- Establish your customer profiles
- Price your products
- Buy an existing business
Research your target market
It's very important to find out whether there is enough demand in your area for your proposed lingerie shop. First of all, it's a good idea to check out the competition. Count how many outlets there are in your area selling lingerie and related items. Your competitors will include:
- other specialist lingerie shops, including high street chains such as Bravissimo and Ann Summers
- department and variety stores such as Debenhams, Marks & Spencer and John Lewis. Many of these have extensive ranges of underwear at all prices and some also offer a free bra fitting service
- supermarkets and market traders (these usually sell the cheaper ranges)
- general clothing or bridal wear shops that also carry some lingerie ranges
Don't forget that you will also face strong competition from online and mail order retailers, such as the eBay Fashion Gallery and figleaves.com.
It may be that you will only be competing directly against some of these outlets because you will be targeting a particular niche market or selling very unusual ranges which are difficult to find elsewhere. If this is the case, consider whether you will be able to attract enough customers to your shop. You might consider widening your potential customer base by selling online.
Generally, for a retail outlet such as a lingerie shop, it is important to have as much passing trade as possible. If you are planning to set up in your local town or city then it makes sense to locate your shop as close to the centre as possible. Think about the type of retailer who will be your close neighbours - ideally you will be near businesses such as clothes shops, hairdressers and beauty salons so that the area is already visited by plenty of women who might become your customers. If you are planning to target upmarket affluent customers make sure that your proposed area is smart and well maintained.
Think also about local crime rates - you don't want to have to cope with high levels of break-ins and theft.
Why will customers choose your shop
You need to make sure that enough customers will choose your lingerie shop rather than existing outlets. Check out the competition to see:
- the range of lingerie they offer
- the prices they charge
- what services they offer
- what are their opening hours
- what type of customer they attract
- what sort of image the outlet projects
Research indicates that over 75% of women wear bras that do not fit them properly - one of the independent retailer's great strengths is in-depth knowledge of the product ranges they carry. This will help you to offer a personal service to customers to make sure that you can give them helpful advice on the underwear that is most appropriate for their age and body shape. Your outlet will also be able to offer greater privacy for customers who want to try on different items.
Check out future developments
The location of your outlet is very important and ideally there will be ample and easy parking nearby and also lots of passing trade. Check that there are no plans to build new road systems, which would mean that traffic would bypass your shop, nor proposals to impose parking restrictions.
Find out what people want
It can be difficult for small independent shops in the clothes retailing sector to survive in the face of competition from department stores, online retailers and so on. So it is very important to make as sure as possible that there will be a market for the lingerie ranges you plan to stock. You could carry out some surveys of the people in your area to find out what type of lingerie and related items they would like to buy but currently have difficulty finding locally. Maybe you could approach local hairdressing salons and ask them to give out a questionnaire to their customers which you could collect at a later date.
Research current trends, plus legal and tax issues
Selling on eBay and Amazon
Selling online can be an excellent way of reaching new customers and boosting your sales. But setting up your own ecommerce website can be expensive and you may not be sure at the beginning whether the value of the sales you'll make online will justify the set-up costs.
As an alternative, trading on eBay or Amazon lets you get a feel for selling online but with much lower start up costs. And you may decide to keep on selling through eBay and Amazon even when you have your own online shop.
You might already have your own personal eBay account that you use to buy items for yourself and to sell things that you don't need any more. But if you're trading as a business on eBay you're legally obliged to make it clear in your listings that you're a business seller. This means that you'll either need to register a new business account or upgrade your personal account to a business one. There's guidance in the eBay Seller Centre on the definition of 'trading' if you're not sure whether you need to register as a business seller.
Similarly, with Amazon you can use an existing account or create a new one when you register as a business seller.
If you're not already running a business and you intend to start selling things on eBay or Amazon - perhaps just in a small way to begin with - then you'll need to notify HM Revenue & Customs (HMRC) that you're trading. There's guidance on the Gov.uk website that gives an overview of what counts as trading and what counts as self employment. It also gives details of your tax and record keeping obligations.
Decide whether to have your own virtual 'shop'
Having your own virtual storefront will give your business a valuable online presence and will allow you to display all your products together in one place.
When you sign up to sell on eBay, you have the option of setting up an eBay Shop. This allows you to create your shop using an existing template or to customise it to your own design. You don't have to choose the eBay Shop option straight away - you may decide it's best to wait until your monthly sales build up to a certain level and then upgrade.
With Amazon, you'll automatically create your own storefront regardless of the package you choose. You won't be able to customise it very much but you will be able to add your name and logo and provide some information about your business.
How much does selling on Amazon and eBay cost?
Before you start selling on Amazon and eBay it's a good idea to find out how much you'll have to pay in fees. Depending on the items you sell and the method you choose for selling them, your total fees can be quite substantial. And while some of the fees you pay will be linked to the number of items you sell each month, others are likely to be fixed costs which you incur even if you don't sell anything.
Both eBay and Amazon give you the option of selling as a business seller without paying any fixed monthly fees, although it's usually more cost-effective to choose a subscription-based package unless you're only selling a small number of items each month.
The eBay website has a fee illustrator tool and a fee calculator that will help you compare the fees for different selling methods and get a good idea of how much your actual per-item selling fees are likely to be.
The Amazon website gives detailed fee guidance, including some examples of pricing for their subscription and non-subscription packages.
Managing your listings
Uploading your inventory to eBay or Amazon and managing your listings can be a time consuming task, particularly if you're planning to sell a large number of items.
Both eBay and Amazon offer useful listing tools, some of which are free and others that you'll have to pay for.
Promoting your items
Because there's such a huge number of items for sale on eBay and Amazon at any one time, it's very important that you do everything you can to stand out from the crowd.
Always make sure that your listings include accurate, spell-checked descriptions and that your photos and other images show the items that you're selling in the best possible light.
You might want to take it a step further and use the various marketing tools provided by eBay and Amazon such as search optimisation, cross-promotions and paid-for advertisements.
As an eBay or Amazon seller your online reputation is extremely important. All sellers have a feedback score based on actual customer feedback and this is the main measure that future customers will use to check that you are trustworthy and reliable.
So you'll want to keep your rating as high as possible by providing an excellent level of customer service and fast delivery at reasonable prices. Make sure you always respond promptly to customer queries, deal with returns efficiently and keep an eye on your stock levels to avoid your listings showing an item as being in stock when it has sold out.
Be aware that packing up orders and sending them out can be time consuming, but it's important to stay on top of the job to make sure that the right items get delivered in good time to the right people. Very many parcel delivery services now offer bulk shipping tools that integrate with your eBay or Amazon account and these can greatly simplify the process of arranging and tracking your deliveries.
If you're selling on Amazon you might also consider using the Fulfilment by Amazon service, where you send Amazon your inventory and they do all of the picking, packing and shipping as well as providing customer service.
The eBay and Amazon websites have a great deal of useful guidance to help you get started as a business seller and to expand your business as demand for your products grows. Both also have lively seller community forums where experienced sellers are often happy to answer questions.
Decide what to sell
The range of lingerie and related products you plan to sell will depend on a number of factors, such as:
- the type of customer you hope to attract - their age and financial status. You should be aware that the mass market for lingerie is very competitive
- whether you are focusing mainly on fashion items, or specialist ranges such as sports bras or maternity bras
- the amount of space you have in your premises
- your own skills and expertise - for example you might have received training as a bra fitter from one of the major lingerie companies
The range of items you might decide to sell includes:
- fashion and designer bras and matching pants/knickers
- thongs and G-strings
- corsets, shapewear, basques, bustiers and camisoles
- bodies, vests, thermal underwear, suspenders
- petticoats and slips
- tights, footless tights, support hosiery, stockings, socks, bed socks
- nightwear, loungewear
- swimwear, sarongs
- glamour wear, erotic underwear, sensual toys
- bridal lingerie
- sports bras and underwear
- maternity and nursing bras
- bras for post-mastectomy wear
- men's underwear and swimwear
- bags, scarves, jewellery
Try to display as much of your stock as possible so that customers can see what you have available. Don't overlook the value of an attractive, frequently changed window display. Most lingerie shops have one or more fitting rooms where customers can be measured and try on garments in privacy.
Many women do not know their own correct bra size and welcome helpful and specialist advice that steers them towards buying underwear that not only looks attractive but also provides proper support and control while being comfortable. So it is important that you and your staff can offer a good bra measuring and fitting service to anyone who wants it. If you are planning to produce made-to-measure bespoke lingerie, accurate measurement taking will be a vital part of your service.
Other services you might consider offering include:
- gift wrapping - this is likely to be especially popular in the run up to Christmas and Valentine's Day
- gift vouchers, which can be a good way of attracting new customers to your shop. Promotions run through 'daily deal' websites like Groupon and Wowcher can be a good way of getting large numbers of new customers through your doors in a short space of time
Although women are increasingly likely to buy their own lingerie - including glamorous, fun and erotic ranges - a lot of lingerie is bought as presents in the run up to Christmas. Valentine's day is another traditionally busy time. Don't forget to make sure that you are well stocked so that you can offer customers a wide choice of items - in all sizes.
If you offer swimwear you might consider promoting your ranges out of season - for example targeting people going on winter sun holidays and cruises. Outside the peak spring and summer seasons your competitors, such as department stores, are unlikely to have extensive ranges in stock, which will benefit your business.
Establish your customer profiles
Your customer base will depend to a large extent on the type of lingerie you are planning to sell - for example, you might intend to stock luxury, designer ranges targeted at more affluent women. Or you might have identified a gap in the market for lingerie and corsetry for larger women. Alternatively, you may decide to concentrate on erotic lingerie and fun items that appeal to a younger clientele.
Many of your customers will be women, but some will be men buying lingerie for their partners. You may notice an increase in the number of male customers in your shop around Christmas time and Valentines Day. If you sell men's underwear items then these may be bought by both men and women - it's often women who buy their partner's underwear.
It is likely that many of your female customers will welcome a good bra measurement and fitting service and it would be a good idea to make sure that all your staff are trained in how to offer this service. There has been some bad publicity recently about the bra-fitting services that are on offer in many lingerie outlets - customers have reported that staff are off-hand and do not appear to be well trained. A common complaint has been the lack of privacy, with some women being measured in the middle of the store in full view of other customers. Many customers feel self-conscious when making purchases of intimate garments and your shop's reputation will be enhanced if your staff are trained to respect this.
It is unlikely that you will offer account facilities to any of your customers, unless you happen to supply other retailing outlets - for example they might stock lingerie ranges that you design and make yourself. Because lingerie can be very expensive it is likely that many of your customers will want to pay by credit or debit card, although cash may also be used, particularly for smaller items such as tights.
Price your products
Some lingerie suppliers recommend retail prices for their products. You might decide to stick closely to these, to use them only as a guideline or to ignore them altogether. Other suppliers offer no guidance on pricing, leaving it up to the retailer. These are likely to include ranges that are imported from abroad, for example from France and Italy.
Getting the price right is very important. It's essential to make sure that the difference between the cost price and the selling price is enough to cover all of your operating costs, including your own drawings. If you import many items remember that currency fluctuations can mean that your stock costs increase. Make sure you adjust your selling prices to cover this. Also consider the following points when setting your prices:
- what do your competitors charge for similar lingerie ranges? The budget end of the market has become very competitive now that the major supermarkets have begun to sell lingerie
- do you really need to offer low prices? If you are planning to stock exclusive designer brands that are not widely available you may find that your customers are not too price sensitive. Sumptuous gift wrapping can further highlight the indulgent nature of the purchase
- will you use key price points - for example £29.99 may seem more attractive to some customers than £30.00
Sales and discounts
It is traditional in the clothes retailing sector to hold sales periods during the year. This allows you to clear out old stock before the new ranges come in. You might decide to have regular sales in the summer and after Christmas.
Lingerie sales are affected by fashion trends like any other sector of the clothing industry and if you are unlucky you can find yourself with money tied up in items that no one wants. Keep a close eye on fashion trends in general - colours, fabrics and styling - and consider discounting ranges which you feel will soon become less popular.
Buy an existing business
You might decide to buy an existing lingerie shop rather than starting from scratch. Buying a going concern can mean that:
- the premises, business equipment and shop fittings are already in place
- there are established customers
- the business can generate income immediately
- suppliers have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- staff are already in place
- a business website has already been set up
However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.
Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- the state of the premises, fittings, equipment and so on. Will you have to spend money refurbishing or replacing assets
- the condition and value of any stock you are buying. Check this over carefully before agreeing a price - you don't want to pay for unfashionable or shop soiled items
- is the existing owner prepared to give you some training after you take over - for example, in bra fitting
- existing staff rights
- how to retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.
Franchising can be a good 'halfway house' between starting out from scratch and buying an existing business. If you purchase a franchise you'll still be setting up your own business, but you should benefit from the experience, resources and perhaps the name of a business that is already successful.
There are a few franchises available for lingerie retailers - a web search for 'lingerie retail franchise' should turn up some potential opportunities.
Although different franchise schemes vary in detail, most feature the following key points:
- as a franchise holder, you'll remain self employed but you'll use the identity (corporate colours, logos, trade name and so on) of the franchisor
- in return, you'll pay the franchisor a fee - this might be a one-off investment, a monthly charge, or a combination of both
- both you and your franchisor will have to fulfil certain obligations and maintain certain minimum standards
You'll probably have to buy some or all of your stock from your franchisor.
Some franchisors will provide you with training, as well as help with advertising and marketing and advice and support on a range of business and technical matters.
Details of the above points are set out in the franchise agreement or contract, which both you and your franchisor will sign. The agreement will also deal with other matters, for example any territorial exclusivity due to you and the minimum period for which the franchise will run.
Before entering into a franchise agreement, it's advisable to check the terms carefully to be sure that you're getting a reasonable deal. Go through the contract with your solicitor before signing anything. Try to find out more about the reputation of the franchisor's business - both among past and present franchisees and among members of the public.
More information about franchising is available on the Franchise Info website. Information is also available from the British Franchise Association (BFA).