How To Start An Online Clothing Business Philippines: Starting your own clothing line in the Philippines is a common and desirable business, but how to start an online clothing business if you are a complete beginner? Happily, we will be answering this very question today by going over a simple step-by-step process of how to start your very own clothing business in the Philippines.
Additionally, we will also be covering some frequently asked questions about clothing businesses such as… how much capital for clothing business in the Philippines, is it a good idea, and many other tips and tricks to help you get started with your very own clothing line business.
How To Start An Online Clothing Business In The Philippines
1. Build Your Clothing Store Plan
In the introduction, we mentioned a few different terminologies; first, we mentioned a clothing store business in the Philippines, and second, we mentioned a clothing store line. We used these alternative phrases because there are many different ways you can start a clothing business in the Philippines.
This stage is perhaps one of the most exciting and challenging. If you are brand new to starting a store business in the Philippines, what’s important is first getting down your ideas and goals and then slowly building your plan once you gather more information.
The Philippines market and leading industries are always changing. Due to the competitiveness of every industry, it’s highly recommended to investigate your options, opportunities, risks, and so on before taking any physical action. A small amount of research can save you greatly in time and money.
Filipino wealth has a free downloadable business plan that can help you open up a clothing store business in the Philippines. This template includes a financial plan and other guides that can help you during the initial planning stages.
Once you have the market data, your plan and strategy, and other information that you feel is relevant to your business idea, you can move on to the next stage, which includes choosing your selling platforms.
2. Choose Your Selling Platforms
Choosing a selling platform is one of the steps that many business owners leave to the last moment. However, due to certain platforms’ added fees and visibility, choosing to sell on one website or not to sell on it will impact your wider business.
Many businesses have succeeded without using third-party platforms such as Lazada, Shopee, and so on; however, there are pros and cons to both options, and this is the stage where you decide how you will sell to the customers and how much it will cost you.
In addition, your ideal customer will also heavily impact the selling platforms you choose to sell on. For example, if you are targeting westerners in countries such as America, Canada, or The United Kingdom, you may wish to use platforms such as Amazon or Esty.
On the other hand, if you are looking to sell locally to a community in your province or city, you may choose to sell on the Facebook marketplace or your website.
Here are some of the most popular selling platforms to give you some ideas.
- Facebook Marketplace
- Other Social Media Channels
One consideration at this stage is to double-check any fees, including tax. Unfortunately, the profit margins have lowered over the years on certain products, including many clothing products, so doing the maths at every stage is always key.
With the added fees that many selling platforms charge to their sellers, a product can be unprofitable. This is why many business owners who buy stock from a supplier often say you make your money when you buy and not when you sell. In other words, the cheaper it is to buy your stock, the higher the profit margin you could potentially earn.
3. Raise The Capital For Your New Clothing Brand
Below we have listed the starting capital for a clothing business in the Philippines. Still, in this section, we are not talking specifically about how much it will cost to start a clothing line business in the Philippines but how you will raise the capital.
There are several ways to raise business capital. One of the most common is through Angel investment. This is where investors invest their capital into your business in return for ownership. Alternative methods include bank loans, crowdfunding, and borrowing money from friends and family.
Working out how much you will need is also a very important step in starting a clothing business. In fact, when you’re looking to start an online clothing business in the Philippines, you will need to ensure that each section of your business is profitable before investing any capital.
One of the most challenging times is deciding how much you will invest in your products. If you decide to private label your business (someone creates the product and puts your logo or brand on it), you may save a great deal of cash if you can order in bulk, but this is a higher risk and is often unadvised when starting a new business.
Once you have decided on your online clothing business plan, your selling platforms, and capital, the next stage is to find the relevant suppliers and manufacturers for your products.
4. Find Suitable Suppliers And Manufactures
Stage 4 will require a great deal of investigation, negotiation, and networking if you are looking to find suppliers at a great price. This is the stage where you leave the business owner mentality behind, and you enter into the entrepreneurial way of thinking.
If you are looking at how to start an online clothing business in the Philippines, you have several different options.
One fantastic option if you are looking to keep costs down is to create the product yourself from the raw materials. This is a fantastic option because you can sell directly to customers or other businesses. In other words, you may even decide to offer your product to businesses and go down the private label route which can be extremely profitable.
Nevertheless, to save time, you can purchase your clothing directly with the supplier, which is very common in the fashion industry. It may be surprising, but many leading brands initially purchase their clothing from outside the country at a much cheaper rate.
Clothingsupplier.com is a popular clothing-supplying business; however, you may find more luck using third-party platforms such as Alibaba. Alibaba is the world-leading platform for wholesale businesses, and you will find many Filipino and overseas suppliers on the platform.
5. Choose Your Location (Store, Warehouse, Etc)
Suppose you are looking to start an online clothing business in the Philippines. In that case, a physical store may not be necessary. However, cornering off a small part of your house or investing in a warehouse may be a great idea, depending on your overall business model.
Suppose there is no option to start a small clothing store business from your home. In that case, you may wish to investigate your options for a location as soon as possible, as rental costs can increase your overall expenses and therefore decrease your profit margin.
Most stores and warehouses also have a minimum contract to rent the commercial property. Therefore, this may be an unnecessary risk if you start a clothing line business in the Philippines from scratch. However, this is only in theory, and every situation will be different; therefore, it is your job as a business owner to decide the appropriate action for your new business.
6. Register Your Company With The Local Government
Registering a company in the Philippines is a fairly straightforward process; however, depending on the location and demand, it can sometimes take several weeks or, in some cases, months for a business to be fully operational.
To register a company in the Philippines, you will need to follow the below procedures. If you are a foreigner doing business in the Philippines, we have a separate guide on how to start a business as a foreigner that you may wish to visit.
- Register The Business Name With The Department Of Trade And Industry (DTI)
- Register For A Barangay Business Clearance
- Register For A Mayor’s Permit
- Register Your Business In The Bureau Of Internal Revenue (BIR)
In the modern world, starting a business in the Philippines has become easier as there are now many online options available. Security bank has a fantastic article on the process of starting a business in the Philippines, which I have linked to for further reading.
7. Start Marketing Your Clothing Business In The Philippines
Affiliate marketing is where someone else will market your products, and they will receive a small amount of commission if they make a sale. If you decide not to use these platforms, you may wish to create your own affiliate marketing program, which can be a fantastic idea, but this will need to be calculated carefully.
Alternatively, traditional online marketing is a great option. This can include marketing on social media sites such as Facebook or directly on search engines such as Google. Just about every company that allows you to sell also allows you to advertise.
However, one important stage that is often missed is the reassessment stage. In other words, once you gather the relevant data and information about your marketing campaign, you will need to reassess what is working and what isn’t working so that you can make progress. This will allow you to reach more customers with the aim of saving more money.
Also, you may choose not to market, which is also an option. However, it can be difficult to build a loyal customer base without awareness if you are a small business. This will be different for every business owner.
If you choose not to market because you are on a budget (after all, starting a clothing business is not always cheap!). One option could be to go down the route of free marketing, such as creating videos on YouTube or commenting on social groups on Facebook.
8. Launch Your Business Officially
Some businesses choose to open their business slowly by selling one or two products, while others choose to have an official launch date. Whichever you choose is perfectly fine, but it’s always good to have a specific date to avoid procrastination in the early stages.
This is a very common behavior for many business owners. I remember when I spent six days creating a logo and finally choosing a standard template that I saw on the first day. I’m sure you wouldn’t do anything like this; however other forms of procrastination can be common, especially during the challenging parts of opening a business.
Therefore, we are more likely to avoid procrastination or other sabotaging behaviors if we can stick to a tight schedule. This is why having an official launch date can be valuable when starting a clothing business in the Philippines.
9. Reinvestment, Growth, And scalability Of Your Clothing Line
Reinvestment in a business is perhaps one of the most important components of a successful business. How much you choose to invest is up to you. Some experts recommend investing 50% of your profits back into your business, while others say that 90% is best, but this will depend on many factors.
As we are looking at how to start an online clothing business in the Philippines, you will notice that there are many stages along the journey. Still, if your business continues growing, you will need to adapt to the market and develop your business accordingly.
Adoption can take several forms. For example, you may see that many of your orders are coming from your website. Therefore, you invest some of your profits in an automatic delivery system to scale your business.
The way I’ve been able to grow this website is through a similar process. I have a road map which is over 50 steps, and this includes where the business is at at the moment and where it is going. Creating something similar can help you choose the best areas to reinvest when you want to grow your online store business in the Philippines.
Starting Capital For Clothing Business Philippines
The total amount you will need to start a clothing store business in the Philippines will depend on scale and business model. For example, if you create clothing items from raw materials, you need 150,000+ Pesos. On the other hand, if you choose to open a clothing business through private labeling, then costs can be as high as 275,000+ Pesos.
The prices above include a small survival budget, but naturally, the business can heavily fluctuate. Therefore, the total price you will need to start a clothing business in the Philippines will fluctuate. It can be possible to start a clothing range business for as low as 50,000 Pesos; however, this will be a small-scale operation without a survival budget.
After creating your initial business plan for your new online clothing business in the Philippines, it would be beneficial to calculate your expected expenses. This includes your first orders, marketing costs, website costs, etc.
Additionally, there are also additional ways you can earn money from starting a clothing business in the Philippines. As this is a popular topic, you can share your journey on social media such as YouTube or create a blog showing others how to be successful in growing an online clothing business. Alternatively, these platforms are also fantastic ways of free marketing.
Is Starting A Clothing Line Or Clothing Business In The Philippines A Good Idea?
The fashion industry is intense and competitive. Therefore, not many clothing store businesses have been successful by being average. On the contrary, most successful clothing store businesses are at the top of their game.
Due to third-party platforms’ fees, delivery fees, and tax, clothing store businesses can be unprofitable while others can be highly profitable. Several key factors influence the result, including customer demand, maintenance expenses, and stock purchasing price.
In some cases, a clothing line business in the Philippines can take many years to succeed. In fact, on average, businesses take around 2 years to be financially profitable. This is why having a passion is important, as this will take you to the next business level.
In summary, a clothing business in the Philippines can be a good idea as long as there are several positive key indicators such as high customer demand and low purchasing prices. Nevertheless, the industry is very competitive, and profits can sometimes be minimal unless you order your stock in a large bulk order.
Expenses Of A Clothing Business In The Philippines
Every business has its income and its outgoings. Unexpected expenses are one of the reasons why some businesses fail in the first few years. This can sometimes be avoided through careful planning and market research; however, sometimes, expenses pop up that we could not predict.
As somebody who has started many online businesses, I have found several expenses that I did not expect. Therefore here is a small list of examples that you may wish to look out for when starting your very own clothing business in the Philippines.
- Business Equipment
- Business Software Fees
- Business Utility’s
- Cancellation Fees
- Delivery Fees
- Local And International Tax
- Low Volume Fee
- Online Payment Fees
- Overdue Rent Fees
- Plug-In Fees
- Re-Listing Fees
- Storage Fee
- Website Fees
- Website Hosting
As a new business owner starting a clothing line business in the Philippines, you will find that not all expenses listed above are relevant. However, having some extra cash is critical because start-up fees and maintenance fees can be high.