How to start an online boutique: steps, rules and costs

How to start an online boutique in eight steps

An online boutique buys clothing and accessories from wholesale suppliers or small brands and resells a curated edit to one type of customer.

1. Pick a customer and a style you can describe in one line

   Decide who you buy for: an age group, a price range, an occasion or a look. A narrow edit makes it easier to choose suppliers, photos and ads.

2. Choose how you will source stock

   Most boutiques buy from wholesale suppliers and brands at trade prices, which ties up money in stock before anything sells. Print on demand pieces, which a supplier prints and ships after each order, cost you nothing until a customer orders. Private label pieces carry your label on a supplier's garments.

3. Register the business

   Pick a structure, register a business name if you trade under one, and get the state and local licenses your area requires. An EIN is available for free directly from the IRS.

4. Check seller's permit rules before you buy wholesale

   Look up your state's seller's permit rules before you place a wholesale order. The licenses section below uses California as an example.

5. Order small, then reorder what sells

   Start with a small run of each style in a few sizes. Check the fabric, stitching and labels on arrival, and reorder what sells out.

6. Photograph every piece the same way

   Shoot every piece with the same background, light and angles, on a person where you can. Copy the fit, fabric and care details from the garment's own label.

7. Price from your real costs

   Add the wholesale cost, inbound shipping, packaging, outbound shipping and platform fees, then set a price that leaves a margin after markdowns and returns.

8. Pick where to sell and launch

   An own store keeps the fee on each sale low, but you bring every shopper yourself. A marketplace brings shoppers and takes a larger share of each sale. The fee chart below compares both.

The federal rules for reselling clothing online

Clothing is regulated by the Federal Trade Commission (FTC) for labels and claims, and by the Consumer Product Safety Commission (CPSC) for safety. A boutique that resells branded stock relies on its suppliers' labels and tests, but it still has duties of its own as a retailer.

Rules also vary by state and city, especially for licenses and sales tax. This page is general information, not legal or tax advice. Check the official page for your state, or ask a professional, before you decide.

• Textile labels: clothing sold in the US needs labels that show fiber content, country of origin and either the company name or the Registered Identification Number (RN). Under the Textile Act, it is illegal for retailers to remove labels with required information from the garments they offer for sale without replacing them.
• Your own label: replacing a supplier's label with your boutique's label is legal as long as the new label lists the name or RN of the person or company making the change, and the label you substitute also must have the required information. You also have to keep records for three years that show the information on the removed label.
• Care labels: the FTC's Care Labeling Rule requires manufacturers and importers to attach care instructions to clothing, and the labels must be attached permanently and securely. If you import stock yourself, the duty is yours: importers must ensure that care labels are attached to products before they sell them in the US.
• Country of origin online: product descriptions in online listings must say the item was made in the U.S.A., imported or both. Use "Made in U.S.A." only if all units were made completely in the U.S. of materials also made in the U.S., never for stock made abroad.
• Flammability: clothing textiles fall under CPSC's flammability standard, 16 C.F.R. part 1610. Children's sleepwear has its own standards: 16 C.F.R. part 1615 for sizes 0 through 6X and 16 C.F.R. part 1616 for sizes 7 through 14.
• Children's clothing: products designed for children 12 years of age or younger that fall under a children's product safety rule need a written Children’s Product Certificate (CPC), based on test results from a third-party, CPSC-accepted laboratory. The CPC comes from domestic manufacturers and importers, so a boutique asks its supplier for it, or issues it if the boutique imports the stock itself.
• Drawstrings: the CPSC standard prohibits drawstrings at the hood and neck area of children's upper outerwear in sizes 2T to 12. Check hoodies and jackets in kids' sizes before you buy them.
• Safety problems: retailers, like manufacturers and importers, have a legal obligation to immediately report certain product safety information to the CPSC, within 24 hours of obtaining reportable information.
• Shipping times: if you do not state a shipping time, the FTC's Mail Order Rule requires a reasonable basis to believe you can ship within 30 days. If you cannot ship on time, you must seek the customer’s consent to the delayed shipment; without that consent, you must promptly refund all the money the customer paid you for the unshipped merchandise.
• Product claims: advertising must be truthful and non-deceptive, and advertisers must have evidence to back up their claims. Rather than repeat a supplier's claims about a garment, sellers with online catalogs should ask for material to back up the claims.

Licenses, seller's permits and sales tax for a boutique

Most small businesses need a combination of licenses and permits from both federal and state agencies. Which ones depends on your business activities and business location, so start with your state's business portal and your city or county clerk. A trade name (DBA) is a common case: most states require you to register your DBA if you use one.

A boutique buys finished stock to resell, so sales tax touches both what you pay suppliers and what you charge customers. California shows how one state handles it. The CDTFA's examples of goods whose retail sales are taxable include furniture, giftware, toys, antiques, clothing. A California seller's permit is free, though the CDTFA may require a security deposit to cover any unpaid taxes.

A California resale certificate must show the purchaser's seller's permit number or an explanation stating why the purchaser is not required to hold a seller's permit. When a supplier accepts a valid one, the seller does not owe tax on that sale. That is how a boutique buys wholesale stock without paying sales tax on it. Other states set their own rules.

In California, you are not required to be registered with CDTFA for a seller's permit if all of your retail sales of merchandise will be facilitated by a marketplace facilitator that is registered as a retailer with CDTFA. A marketplace seller is generally required to register if it makes direct sales of tangible merchandise to California customers that are not facilitated through a marketplace. In California, sales from your own store are direct sales, so an own store usually means holding a permit yourself.

For income tax, payment apps and online marketplaces must send a Form 1099-K when your payments total over $20,000 in more than 200 transactions. If customers pay you directly by card, your card processor sends one no matter how many payments you got or how much they were for. Either way, you must report all income on your tax return.

How much does it cost to start a boutique?

The cost to start a boutique online depends mostly on how much stock you buy before the first sale. With no rent or fixtures, the store plan and the first order of stock are the main costs. Example figures in the table are labelled.

Example: the stock, photo setup and packaging above add up to about $1,170 before the store plan. Print on demand or a smaller first order costs much less, because you hold little or no stock.

Where online boutiques sell and what each platform takes

Example: one $45 dress sold online. The chart shows what each platform takes from that sale, using each platform's own published rates.

Own store, marketplace or social: how boutiques choose

On an own store such as Shopify, Big Cartel or Square Online, you pay for traffic yourself through ads, content and email. Depop has zero selling fees for US sellers and charges payment processing, plus a fee if you boost a listing. Poshmark's fee is a flat $2.95 below $15, so low-priced pieces lose a large share there.

Etsy's creativity standards say all items must incorporate a human touch. They list resold commercially available items that are newer than 20 years old among the items that do not qualify as handpicked by a seller, so new wholesale stock does not fit there. A vintage boutique can fit, because Etsy counts items 20+ years old that the seller personally curated or collected as vintage. So can a boutique that sells its own designs, because Etsy's designed by a seller category covers original designs that are produced or printed by a third party.

Facebook and Instagram shops work differently now. Checkout on Meta shops: Retired as of September 2025; shops now use website checkout. Where buyers pay: On the seller's own website. So a boutique that sells through Instagram or Facebook still needs an own store behind it.

Where Nation fits

Questions about starting an online boutique