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How To Start An Online Clothing Business in Canada

Starting an online clothing business in Canada can be a great way to make money, but it can also be a daunting prospect for many entrepreneurs. 

With the right knowledge and resources, you can have your own successful clothing business up and running in no time. 

This article will discuss the steps needed to start and grow an online clothing brand in Canada. 

It will cover topics such as researching the market, setting up shop, marketing your products, and more. 

By the end of this article, you’ll have all the information you need to get started with your online clothing store in Canada.

Research and Preparation

Before you can start an online clothing business in Canada, take some time to research and prepare.

a. Understand the Canadian Clothing Market

Start by looking into the general fashion market.

It is worth noting that the Canadian clothing market is one of the largest in the world.

In 2019, the average Canadian household spent $3,344 on clothing and accessories, according to the most recent data. 

This market is highly competitive, with a wide variety of international brands available for customers. 

And that has affected the entire market.

In fact, the value of the Canadian clothing market is projected to reach about $28.5 billion in 2024, which means that now is an ideal time to get involved in this industry. 

Do research on what other companies are doing in this sector and look at their success stories before launching your own online business. 

This is your chance to differentiate yourself from competitors by offering unique products or services that can’t be found elsewhere.

b. Pick a Niche

Once you have researched and identified the market you are interested in, it is time to pick a niche. 

Your chosen niche should be specific enough to target a subset of potential customers with similar interests or needs. 

For example, if your business sells clothes online in Canada, you might focus on offering an exclusive line of sportswear for active women. 

As of August 2022, Canadians planned to spend 29% of their online shopping budget on clothing and footwear.

This means that it couldn’t be a bad niche!

Either way, when choosing a niche, consider what sets you apart from competitors already in the market. 

Maybe you can offer better quality materials at competitive prices; or perhaps an extensive selection of sizes and styles that would appeal to different body types? 

Whatever it may be, make sure there is something unique about the products that will set it apart from what’s already out there. 

c. Identify Your Target Audience

Once you’ve picked a viable niche, the next step is to get into the heads of the target customers. 

This is a critical step in starting an online clothing business in Canada.

You need to know what makes your target customers tick.

What are their pain points? What makes them make decisions?

According to fashion statistics from 2020, 27% of Canadians are style seekers–people who like to keep up with the latest trends and take risks with their wardrobe. 

With this in mind, begin creating that persona of your ideal customer.

Look into factors such as age group, gender, lifestyle, budget, and interests. 

For example, remember the statistic we just mentioned?

These Canadian Style Seekers are primarily female, under the age of 45, have a household income surpassing $100,000, and are university graduates.

Knowing that will come in handy when crafting marketing campaigns and setting prices.

From this also, you can understand what drives their decision-making process.

d. Analyze Your Competition

You won’t be operating in a vacuum. 

And if you somehow stumbled upon a niche with no one in it, there is a high chance you are lost.

This is the fashion market we are talking about!

You will have big brands gunning for your customers.

As such, you MUST thoroughly understand the current market and what other companies are doing to gain an edge. 

A good first step is researching their websites and social media accounts to get a sense of their brand and target customer base. 

Review their pricing strategy and any promotional tactics they may be using. 

Doing this can help you identify areas where you can differentiate yourself from the competition, such as offering more specialized items or creating a better customer experience. 

BEING different in the right way is your golden shot at sinking your claws into this online clothing business in Canada.

Setting Up the Online Clothing Business in Canada

Time to move up the gears and get legal!

a. Choose a Business Structure

Several popular business structures are available in Canada, such as sole proprietorship, partnership, or incorporation. 

If your clothing store will be a small operation, then setting up as a sole proprietor may be the best option. 

This is one of the most common and simplest forms of business structure in Canada which will allow you to operate without registering with any government authority. 

However, keep in mind that this type of structure also has its limitations in terms of liability protection and access to capitalization options like loans or investors. 

If you’d rather have it separate, then you should consider setting up a corporation or partnership. 

While at it, pick a business model that best suits your company’s goals.

Here are some to consider:

  • Dropshipping – This is a business model in which you don’t need to store any inventory. Instead, when someone places an order on your website or platform, the product will be shipped directly from the supplier’s warehouse and then sent onward to customers through various delivery services
  • Manufacturer-Direct – With this type of online store setup, you purchase products direct from manufacturers at wholesale prices and resell them for profit via your own ecommerce platform
  • Retailer/Distributor – Here’s another popular option that involves purchasing goods from third party retailers (e.g., Amazon) and selling them on your site 

Whichever structure you choose depends on the type of business and its size. 

b. Register the Business

Before you register your business, you will need to know:

  • where your main office will be located
  • which other provinces and territories you plan to operate in
  • the type of business that best suits your needs.

Your online clothing business must be registered with the appropriate Canadian government agency. 

To do this, pick the best name for your business and make sure to check that the name is available and not already taken. 

You can search online or file a trademark application through Industry Canada

And then register your business as soon as possible so that nobody else can use the same name.

c. Obtain Necessary Licenses and Permits

Before you can begin operating in your online clothing business in Canada, obtain the necessary licenses and permits. 

Depending on your province or territory, you may need special permits or licenses to sell clothing online legally. 

For instance, some provinces require retailers who sell products over the internet to register with their provincial or territorial government, while others require a business license. 

Just check with the appropriate government agency for the regulations in your area before launching your business. 

Also, you may need a permit from Canada Revenue Agency (CRA) if you plan to hire employees for your business. 

Regarding revenue, understand any tax requirements that come with running an online clothing store in Canada.

You will generally be required to register for GST/HST which must be collected from customers and remitted back to CRA through regular filings. 

Develop the Website

Done with legalities?

Let’s build the online presence of your clothing business in Canada!

a. Choose a Platform 

When starting an online clothing business in Canada, choosing a platform that meets your needs is essential. 

The two most popular choices are Shopify and WordPress. 

Shopify is an all-in-one eCommerce solution that allows you to design a beautiful website, manage payments, and easily ship orders. 

It also offers helpful features such as automated marketing campaigns, analytics, and product reviews. 

With Shopify’s free trial period and its wide range of features, it’s easy to start selling clothes quickly. 

WordPress is another great choice for entrepreneurs looking to launch their online clothing business in Canada. 

This open-source platform enables users to create custom sites with their own unique designs without requiring any coding knowledge. 

Not to mention, many plug-ins allow entrepreneurs to add new features or customize existing ones. 

For instance, you can install the WooCommerce plugin to power your online store right inside WordPress.

For this to work, do the following:

  • Register a domain name. This can be the business name you picked earlier.
  • Get reliable website hosting. This is where store files will live online. I’d recommend you get managed WordPress hosting. With this, you won’t have to worry about any technical jargon; the hosting provider will take care of that.

b. Design the Website

Your website will act as the storefront of your online clothing business in Canada, so don’t mess it up!

Create a visually appealing store with easy navigation for customers. 

Your store should be mobile responsive and offer fast loading times.

And all these can be determined by the platform you picked earlier.

Using WordPress, consider using plugins and themes to create a professional-looking store.

Your site should include product pages, shopping cart functionality, payment methods (PayPal or Stripe), shipping options for Canadian customers, a customer reviews/ratings system, FAQ page ,etc. You can also add in bells & whistles such as gift cards or loyalty programs.

Make sure all your content is up-to-date, easy to understand and accurate. 

Also include a contact page with social media links so customers can stay in touch or reach out if they need help.

c. Establish Payment Processing

How will you collect and process payments?

Identifying the right payment processor for an online clothing business in Canada can be daunting. 

But there are somethings you can do to ease the challenges.

Familiarize yourself with the various payment options available in order to ensure that you offer customers a secure, convenient way to pay for their purchases. 

The most common methods of payment accepted by Canadian businesses are credit cards and Interac e-Transfer. 

You can also have PayPal and Stripe in there, they are both popular and widely accepted by various banks.

Either way, when choosing a merchant provider, research fees associated with each provider and select one that fits your budget and offers the features you need. 

You should also consider whether they offer fraud protection and security measures such as encryption technology or tokenization. 

Above all, the provider should have compliance certifications in place to meet industry standards like Payment Card Industry Data Security Standard (PCI DSS) certification.

Source and Stock Your Inventory

Remember when we mentioned online business models?

Well, this is the moment of truth!

Since your site is ready, start uploading product pictures and get ready for orders.

a. Research and Select Suppliers 

Suppliers play a critical role in running a successful online clothing business in Canada.

And depending on the chosen business model, identify reliable suppliers who can provide quality products at competitive prices. 

A good way to find potential suppliers is to use industry directories such as the Canadian Apparel Federation or FashionUnited

These platforms contain comprehensive listings of Canadian apparel manufacturers offering different clothing items for sale. 

It’s also advisable to ask for referrals from other industry professionals or people who have recently launched similar businesses. 

Talking with existing vendors can give you insight into their experiences and help you narrow down your supplier list. 

Look for reviews online about the prospective suppliers and be sure to research the company’s reputation before making any final decisions. 

If you run a dropshipping business on Shopify, you will find the following apps valuable in finding the right suppliers: 

  • Oberlo
  • Spocket
  • Printful.

These apps allow you to source quality products from different suppliers worldwide quickly and automatically add them to your store inventory with just a few clicks. 

Finally, make sure that you have comprehensive contracts in place with all of your chosen suppliers before proceeding further ahead.

b. Price Your Merchandise

Pricing directly affects how much profit you make and how competitive you are in the market. 

As such, it is important to consider how much to charge for each item carefully. 

To begin with, decide on a pricing strategy that works best for your business. 

You can either use cost-plus pricing (where you add a mark-up to the cost of goods) or value-based pricing (where you set prices based on customer perception). 

When determining your costs, include all overhead expenses when calculating the cost per item. 

This will ensure that you are able to make a good profit while still being competitive in the marketplace. 

If you are lost, research competitor prices to ensure that yours are in line with what’s offered elsewhere and adjust accordingly if needed. 

c. Promote Your Online Clothing Business in Canada

This is essential in growing your brand and ensuring that your target audience is aware of it. 

Social meida is one of the most cost-effective ways to spread the word about your business and establish a presence online. 

And according to Statista, there are over 34.47m social media users in Canada.

This means if you can figure out a way to find and engage users, you have a chance to direct them to your store and make money!

Besides social media, invest in paid advertising when appropriate, such as sponsored posts or targeted ads. 

This helps reach more potential customers and can give you greater visibility than organic content alone. 

And then there’s the oldest way of marketing; email marketing!

Developing an email list is another effective way to promote your online clothing business in Canada. 

Collecting customer emails allows you to contact customers directly with exclusive offers, promotions, or announcements about new product arrivals, which can help boost sales and increase brand loyalty. 

And you don’t have to do this manually.

An automated email system saves time by allowing you to schedule emails in advance and automatically send them out at specified times. 

Monitor and Evaluate

You need to keep tabs on what’s going right and wrong.

You can track your website performance by analyzing data such as the number of visitors to your site, pages viewed, time spent on each page, and customer interactions. 

This data can indicate which products are popular with customers and if anything is blocking their journey from arrival to purchase. 

You should ALSO analyze your sales data in order to assess which items are selling best and identify any areas that may need more attention or marketing support.

And review customer feedback in order to understand how they perceive your brand and products. 

Customer reviews can be a great way to identify customer requirements that you may not be aware of or didn’t consider when setting up your store. 

Final Thoughts

Starting an online clothing business in Canada can be a rewarding experience. 

Following the steps outlined above, you should have no trouble setting up your shop and getting it off the ground. 

It may take some practice to get into the swing of things, but with dedication and hard work you’ll be able to make your business successful. 

Canada has a large marketplace for online apparel, so there are plenty of opportunities to capitalize on this industry. 

With careful planning and research, you can create a thriving business that will help make your dreams come true. 

Keep in mind that starting any type of business is no easy task and requires determination and perseverance – but if you put in the effort, it will pay off! 


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