What's the gross/net profit margin of higher-end boutiques?

Discussion in 'Business, Careers & Education' started by Optimistic, Jun 23, 2011.

  1. unjung

    unjung Senior member

    Messages:
    6,561
    Likes Received:
    12
    Joined:
    Sep 30, 2008
    Location:
    Madrid
    I used to own a store that sold see-through underwear. I made one hundred million dollars per year.
     


  2. Blackhood

    Blackhood Senior member

    Messages:
    2,904
    Likes Received:
    364
    Joined:
    Feb 5, 2010
    Location:
    Cambridge, UK
    I used to own a store that sold see-through underwear. I made one hundred million dollars per year.

    Star customers: 1 Emperor, 36,000 porn stars.
     


  3. bananananana

    bananananana In Time Out

    Messages:
    664
    Likes Received:
    1
    Joined:
    Jan 27, 2010
    Econ at cal is what people choose after they get rejected by haas for undergrad business.

    To OP, if you're really serious about your goal, and it seems like you're not, go get an internship and job in the retail industry. Even if someone said, margins are around x-y%, what the fuck does that even tell you?
     


  4. bach

    bach Senior member

    Messages:
    1,110
    Likes Received:
    0
    Joined:
    May 5, 2008
    Lol. So this is Cal's level of education. Just as I expected.

    STFU. I bet he's a community college transfer.
     


  5. imageWIS

    imageWIS Senior member

    Messages:
    20,008
    Likes Received:
    97
    Joined:
    Apr 19, 2004
    Location:
    New York City / Buenos Aires
    Econ at cal is what people choose after they get rejected by haas for undergrad business.

    To OP, if you're really serious about your goal, and it seems like you're not, go get an internship and job in the retail industry. Even if someone said, margins are around x-y%, what the fuck does that even tell you?


    Everything, duh!
     


  6. HRoi

    HRoi Senior member

    Messages:
    17,886
    Likes Received:
    5,856
    Joined:
    Dec 28, 2008
    I used to own a store that sold see-through underwear. I made one hundred million dollars per year.
    i bought one of those - it was so decadent and high quality that i swear to god it felt like i had nothing on. they were so gossamer light that if you held one in your hand you would swear you were holding nothing. would definitely buy again if you ever opened back up [​IMG]
     


  7. linds_15

    linds_15 Senior member

    Messages:
    646
    Likes Received:
    87
    Joined:
    May 24, 2011
    Location:
    Toronto
    i simply dont understand how people jump straight to profit like its an exact calculation. between rent in different cities and prices retailers charge to carry their brand (he mentioned nike which i heard is roughly 50,000$) the range is massive. also, building a reputation is probably the hardest part, personally if he opened a store in toronto, which has had places open recently that carry brands i like, i still always find myself at my favourite store buying the brands i like
     


  8. atila

    atila Senior member

    Messages:
    409
    Likes Received:
    23
    Joined:
    Oct 5, 2010
    Location:
    Los Angeles
    If you want to start a business right after college, you should have chosen a Business Administration major (Specifically Business Management) instead of Economics.

    I was a business management major - what a load of crap that was. Econ majors actually have to earn their degrees - can't say I did (and my university had the second largest business program in CA).
     


  9. Pantisocrat

    Pantisocrat Senior member

    Messages:
    1,772
    Likes Received:
    7
    Joined:
    Jan 7, 2010
    Location:
    √Čtats-Unis
    I don't think there's much profit for selling expensive goods because what's driving each transaction isn't based on need. For clothes and accessories, there are already established second hand markets in the US and even rich people these days spend with high discretion. If I were you, I'd focus on getting a stable job, and use that savings to invest in a small service-based business.
     


  10. thenanyu

    thenanyu Senior member

    Messages:
    2,380
    Likes Received:
    123
    Joined:
    Aug 16, 2009
    Location:
    San Francisco
    I was a business management major - what a load of crap that was. Econ majors actually have to earn their degrees - can't say I did (and my university had the second largest business program in CA).

    When did largeness ever == quality?
     


  11. Optimistic

    Optimistic Active Member

    Messages:
    25
    Likes Received:
    0
    Joined:
    Jun 23, 2011
    If you want to start a business right after college, you should have chosen a Business Administration major (Specifically Business Management) instead of Economics.
    lol [​IMG]
    Lol. So this is Cal's level of education. Just as I expected.
    Yep [​IMG]
    this is the oldest question in the history of the internet. Boy likes [fill in expensive hobby funded by parents] Boy posts on [expensive hobby] forum Boy wants to open shop selling [expensive hobby] ??? Profit and it kills me when people ask about salaries of small business owners. The salary is what you put into it. First year will be insane hours and barely enough money to pay your bills, second will be bad, but a little better. If you make it to the third year, you'll probably have enough to start paying back the people who loaned you money. Yoyoyo the sky is blue man... "it kills me"... lmfao... //rant
    coolstorybro; nah... the most expensive clothing I wear is Levi's... and it's not the vintage stuff hahaha... I come from a poor family and have gone through a lot of bullshit, and my parents have been small business owners for 20 years and have always kept me in the loop, so yeah...
    Econ at cal is what people choose after they get rejected by haas for undergrad business. To OP, if you're really serious about your goal, and it seems like you're not, go get an internship and job in the retail industry. Even if someone said, margins are around x-y%, what the fuck does that even tell you?
    [​IMG]; I love that stereotype... keeps the sheep out of my major... besides the double majors who do in fact have a leg up on me on paper
    STFU. I bet he's a community college transfer.
    [​IMG] bach and bananananana should get married; they're equally retarded
    And maybe make a few business plans, based on real numbers and due diligence.
    Hence why I asked the question?
    Managerial accounting specifically.
    I've already taken two accounting courses... the second being managerial accounting.
    Ok, I was going to let a few of the Big Boys have a crack at you before pointing this out, but it's taking too long. YOU'RE AN IDIOT! 1. The only people who know this shit are the owners of the boutiques. No shit... I already said that. They aren't about the share their mark-up/profit margins with you because: (a) Why the fuck should they, its none of your business! (b) If people know what the mark up is, they know how much discount can be asked for (c) Every single one is different. A 5th Avenue boutique will charge a bigger mark up than a small town boutique. 2. This is basic research that you should have the brains to do yourself. Off the top of my head I would suggest calling wholesalers, contacting brands and investigating franchise owners. Ever take the time time to figure out that I may have already done this and am simply trying to get as many sources as possible? No, of course not... because trolls like to imagine somebody below them... if you can't walk using your arms and hands, then I probably can't walk using my legs and feet. [​IMG] 3. Even if you can work this out, and have the business knowledge to make it work, and get the funding you still wont be able to sell these brands. You have to earn the right to sell this stuff, people like Armani Jeans still want you to have 5+ years experience selling high-end goods, be the only one in a certain area, and give the sales rep a blowjob. Now brands like MMM for whom exclusivity is an even bigger issue? You better bring lube to that meeting. Yeah... I'm wondering how much of this is fact and how much is hearsay... 4. Start-up capitol? I'm gonna make up some figures just for my own entertainment: Assume $50k rent p/a and a shop holding 250 garments (50 lines, sizes XS,S,M,L,XL). Average wholesale price of garments: $100. Rent: $50,000 Stock: $25,000 Staff: $60,000 (3x $20,000. High end sales staff aren't cheap) Assume that like most B&M businesses don't break even for 3 years. Your startup capitol is $405,000. And you can't make the firs steps without help?
    Thanks, but what I meant to ask was whether or not there are methods within the clothing retail business which help to lower startup capital... basically, are there any ways to make the startup capital lower than the obvious which you listed.... ex. do such labels have a spot in their receivables for start ups or established companies, or is the industry standard an indefinite pay first talk later...
    i simply dont understand how people jump straight to profit like its an exact calculation. between rent in different cities and prices retailers charge to carry their brand (he mentioned nike which i heard is roughly 50,000$) the range is massive. also, building a reputation is probably the hardest part, personally if he opened a store in toronto, which has had places open recently that carry brands i like, i still always find myself at my favourite store buying the brands i like
    Yeah; thanks.
    Gross margin (at full retail) ranges from 50% to 66% for most items. There will be some items (some accessories, impulse buys, etc.) where you'll get a big margin, but they're typically lower dollar value. Keep in mind that if you're selling clothing, your realized margin will be quite a bit lower, because you'll have to clear a significant amount of your merchandise at sale prices. As you note above, most established brands have restrictions on on-line selling, and extensive MAP policies. The most important thing you need to open a boutique like this is a ton of start-up capital. Only if you're extraordinarily well capitalized are high-quality brands going to be willing to sell to you. Without a ton of money (or a proven track record of success), you're not going to be able to convince a luxury brand to trade with you.
    Thanks!
     


  12. Tck13

    Tck13 Senior member

    Messages:
    5,759
    Likes Received:
    77
    Joined:
    Mar 9, 2006
    Location:
    Philly
    I want to know what the industry standard profit margin is on items like Visvim and Maison Martin Margiela... to make the world go round it has to be high enough to make me want to start a boutique, then work my magic to make it successful...


    There is no "industry standard" unless, as another pointed out, 45% to 55% (or so) is what is considered an "industry standard". Plus, it depends on many factors i.e. location, store size, market, popularity of product, etc.

    Thanks, but what I meant to ask was whether or not there are methods within the clothing retail business which help to lower startup capital... basically, are there any ways to make the startup capital lower than the obvious which you listed.... ex. do such labels have a spot in their receivables for start ups or established companies, or is the industry standard an indefinite pay first talk later...

    Do the work on your store yourself (store set up, fixtures on sale or being thrown out by other retailers, store construction, etc...)

    In trying to open a store, I found there was no "discount" for new store owners. In fact, I found it harder because there's no relationship or past history.

    If you're serious about this, I'd suggest actually doing a business plan to answer your questions.
     


  13. Optimistic

    Optimistic Active Member

    Messages:
    25
    Likes Received:
    0
    Joined:
    Jun 23, 2011
    There is no "industry standard" unless, as another pointed out, 45% to 55% (or so) is what is considered an "industry standard". Plus, it depends on many factors i.e. location, store size, market, popularity of product, etc.



    Do the work on your store yourself (store set up, fixtures on sale or being thrown out by other retailers, store construction, etc...)

    In trying to open a store, I found there was no "discount" for new store owners. In fact, I found it harder because there's no relationship or past history.

    If you're serious about this, I'd suggest actually doing a business plan to answer your questions.Yeah, I will. Just getting my feet wet.


    Thanks! Yeah, there's just a lot of little "OMG... I could have payed for this at the end of the month or end of the year?" that I know of for other businesses which I can't really think of for a clothing retailer hahaha
     


  14. Tck13

    Tck13 Senior member

    Messages:
    5,759
    Likes Received:
    77
    Joined:
    Mar 9, 2006
    Location:
    Philly
    Thanks! Yeah, there's just a lot of little "OMG... I could have payed for this at the end of the month or end of the year?" that I know of for other businesses which I can't really think of for a clothing retailer hahaha

    You'll need to turn over your merchandise every season (3 or 4 months) and I guarantee you'll have to sell some of it at a discount.

    End of season discounts happen all of the time at retail clothing stores.
     


  15. thenanyu

    thenanyu Senior member

    Messages:
    2,380
    Likes Received:
    123
    Joined:
    Aug 16, 2009
    Location:
    San Francisco
    OP,

    If you are serious about this, work retail. Learn how business is conducted and network your ass off. You want a store, you need suppliers. You need wholesale accounts and you want to get private label going because that's where the margins are.

    All the theory and modeling in the world is not going to help you run a clothing boutique. Getting an exclusive to shoes that Katy Perry wore last week will.

    Why are you asking people on SF about this shit? Do your own research. Call suppliers and ask what the wholesale price is.

    Good luck.
     


Share This Page

Styleforum is proudly sponsored by