The closure of offline retail stores during the coronavirus-induced lockdowns in India has been another market opportunity for e-commerce.

Despite the retail market shrinking by five per cent due to the impact of the Covid-19 pandemic, the Indian e-commerce industry grew by 25 per cent in 2020-21, according to a report by Bain & Company and Flipkart.

Similarly, in the midst of the coronavirus crisis that has devastated many industries, India's fashion industry continued to grow.

The e-commerce-focused supply-chain SaaS platform Unicommerce revealed in a report that e-commerce continued to grow with 51 per cent order volume growth and 45 per cent growth in GMV (Gross Merchant Value) in FY21 as compared to the previous financial year.

This is an ideal time for budding entrepreneurs in India to start online fashion businesses and take advantage of this opportunity.

One can start a fashion e-commerce business under Rs 10,000 in the asset-light retail model of dropshipping. One can also opt for an inventory-based model with an initial investment of above Rs 1 lakh.

Let's understand what dropshipping is

Dropshipping is a form of retail where online orders can be accepted on behalf of a product manufacturer and order and shipment details can be passed on to the manufacturer and / or logistics partners.

In this e-commerce model, one does not keep any fashion goods in stock, so one does not have to spend anything on storing them, buying clothes or renting a warehouse.

Basic first steps

First, the entrepreneur needs to open a current account in a bank of their choice. There is no cost involved at this stage.

Then, the online fashion business needs to be incorporated and get a GST certificate. This can be done by the entrepreneurs themselves, but it is also possible to hire a consultant who can perform the task for Rs 5,000-8, 000 (including an incorporation fee of around Rs 2,500 for a sole proprietorship).

A sole proprietorship e-commerce business can also get a trademark for Rs 4,500. While it can be done by yourself, a consultant can also do it for a fee of Rs 2,000-5, 000.

Creating a website

Branding and marketing are essential to seeing success with the dropshipping model for online fashion. Building a website and gaining traction on social media is crucial to this success.

A freelance designer can create a brand logo for Rs 5,000-6, 000, but it can also be done by entrepreneurs themselves on free design software.

To build a website for an online fashion business, one can take advantage of platforms like Shopify, which charges around $29 (approximately Rs 2,100) per month.

According to Ayush Agarwal, founder of Mash, an online sustainable textiles brand, a platform like Dukaan can create an online store for Rs 8,000 per year. He adds that a freelance web designer can create a website from as little as Rs 15,000.

List of products

A budding founder needs to make a deal with a manufacturer to retail its goods online and hire a photographer for a product photoshoot. This step can be done on your own, but hiring a professional photographer can cost anywhere from Rs 100 to Rs 1,000 per SKU.

Then, you can list the products on the website of the online fashion business.

Payment gateway integration for the website and striking deals with logistics partners is required, and usually does not include upfront fees (commissions from sales and / or pre-determined fees based on sales are what most payment gateways and logistics providers prefer to pay, respectively.)

Own Website vs Amazon, Flipkart, Myntra

Under the dropshipping model, it is generally not recommended to list products on Amazon, Flipkart, Myntra, and other traditional e-commerce websites.

Instead, they believe it's better to sell primarily through a brand's own website and tie up directly with logistics partners for delivery.

Alok Paul, co-founder of online apparel brand Berylush, says, "If the delivery is dependent on third-party delivery partners, it becomes difficult to control the customer experience. "

Other costs and expenses

Although some entrepreneurs prefer to spend on printing their brand logo on packaging, it is better to do packaging at a low cost.

In the early stages of a small, fashion e-commerce business, the printing of labels and invoices can be done with a basic laser printer. Laptop and internet fees also count as infrastructure costs, but in most cases, the entrepreneur is likely to have a computer and a Wi-Fi connection upfront.

Marketing

Once the supply chain, e-commerce website, and delivery network are operational, entrepreneurs can start marketing fashion products on Facebook, Instagram, Google, etc.

Basic knowledge of social media platforms is enough to promote products online. However, to increase impressions and increase visibility, Facebook marketing is a good place to start, according to Alok.

"A typical manufacturer of fashion clothing does not know how to market its products online. That's where Dropshipper works, creating brand awareness on social media, "he says:

If fully outsourced, the above-mentioned steps can cost a fashion e-commerce business upwards of Rs 50,000 to retail a handful of SKUs.

But Ayush believes that most of the listed costs can be significantly reduced if entrepreneurs are willing to learn and perform most of the tasks themselves, and adds that one can start an online fashion business based on this dropshipping model for Rs 10,000.