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How to Sell Luxury Goods Online and Earn Profits

19 minutes

In the eCommerce industry, it becomes more and more common for boutique owners who at first were selling low-cost items to shift to selling luxury goods online. Wonder why they make such a decision? It comes a moment when they realize that, even though it’s a rather safe alternative, selling cheap merchandise doesn’t bring a significant income. So they ask themselves what are other ways to make bigger profits?

Getting into the market of luxury goods

It’s proven that in the market for luxury goods lies a bigger opportunity to make more money. The latest statistics show that the luxury goods market now counts US$337,314m. Furthermore, it’s anticipated to grow by 4.69% annually in the period between 2022-2025. This data puts luxury products in a superior position as compared to low-cost merchandise.

This is the reason why many store owners are looking into the solution of switching to selling luxury items. If they try to sell low-quality products at higher prices, they could risk losing their customers’ trust. On the other hand, supplying the store with different types of products that will bring freshness to the store could be a game-changer.

For those passionate to earn bigger profits in the eCommerce industry, selling luxury items is the right choice.

To emphasize, it’s easier to buy and resell low-cost merchandise. But, at the same time, selling luxury items online, is not only doable but also more profitable. It requires a more focused approach and demands a proper strategy, however, it’s not a complex job.

In this guide, we’ll delve into the most important aspects of how to sell luxury goods online. Starting with the basics of what are ‘luxury goods’, you will learn how to sell luxury goods online.

What are considered luxury goods?

Here’s a simple definition of the term. Luxury goods are often used synonymously with superior goods. In contrast with necessity goods, luxury goods are typically more costly. For example, classic luxury goods include high-end clothing, accessories, or luggage.

In short, learning how to sell luxury goods is a very lucrative business, and for a very simple reason. Certain individuals appreciate the value of superior quality, particularly when it comes to clothing brands. These individuals often pay a lot to dress and look nice. They belong to a group of individuals with higher disposable income.

If you want to make bigger money, selling luxury fashion items online is a good idea. Your target customers would be the people who buy this type of clothing. Under the category of luxury clothing and accessories fall items from renowned fashion houses and top-selling brands.

In practice, to run a successful online boutique for luxury items, there are a few things to take into consideration. They might seem hard at first, but in the long run, you’ll be mastering some essential skills and tricks. Now, let’s break down the essentials you’ll need to start selling luxury goods with success.

Create an online store

The first thing every seller needs to do is create an online store. Today, the eCommerce world is modernized to the point where there is a myriad of platforms where you can create your own store in a heartbeat.

eCommerce platforms such as Shopify, Shift4Shop, and WooCommerce are ones that offer easy and simple solutions. Ultimately, whichever platform you choose, you can start building your store for selling luxury clothing within minutes.

Define your target customers

After establishing your store, an important question arises – to whom will you sell your luxury goods? People with refined taste in clothing, knowing what to buy and wear, will definitely be interested in your store.

Also, you’ll have to define the average age of your shoppers. It’s most likely to include ‘Gen X’ shoppers, or the ‘ages 36-52‘ category. This includes successful entrepreneurs, lawyers, doctors, investors, real estate agents, and other well-paid jobs.

People of these ages often spend a lot on designer clothes because of their high income and pensions, as well as higher social status. Although the most active category online, most millennials (ages 18-35) don’t have the financial power of buying luxury items online. The fact is, most of them have only started building steady careers and try to follow the path to success. Still, don’t be surprised if you find many millennials buying your products. They often take short-term loans and credit cards to satisfy their desire for quality branded clothes.

Find suppliers of luxury goods

Finding a luxury clothes supplier with a good reputation is not a simple task. But once you spot it and make a deal with one, you’ll start noticing its positive influence on your business. The thing is, it isn’t enough to just sell luxury clothing in your store, you need to find a supplier who’ll support you every step of the way. Choosing a supplier that is known for its premium services and support will definitely lead you on the right path to achieving major success.

Talking about trustworthy suppliers, a tricky thing in this business is product authenticity. How to prove if the items you sell are authentic? Exposure to counterfeit goods in the luxury market is very common. This is the reason why it’s only natural that a customer may demand proof of authenticity for a product. If you somehow give out the impression that your products are fake, your customers might request some kind of documentation to verify their authenticity.

Hence, when entering the market of selling luxury goods online, you should look for a reliable supplier that will sell your products in their original packaging, hangtags, labels, and barcodes. This is the most adequate way to ensure product authenticity. This is essential not only for your customers but for you as well, if you want to stand out from the crowd as a genuine seller of luxury items.

There are cases in which people claim to have received fake clothing, otherwise paid for as authentic designer clothes. This is something that you mustn’t allow yourself to experience.

BrandsGateway as a supplier of luxury clothing

As an example, BrandsGateway sells and delivers 100% authentic wholesale clothing. Their practice is delivering branded items with their original tags and in original packaging. Other proofs include testimonials from satisfied customers that speak about BrandsGateway across numerous review websites such as Trustpilot. Additionally, BrandsGateway doesn’t shy away from sharing the success stories of their trusted dropshippers who have been working side by side with the company for years. The essential feature that makes BrandsGateway the perfect choice for your dropshipping store is their plugin for automated dropshipping available for stores based on Shopify, WooCommerce, Wix, or Shift4Shop which guarantees automatic inventory updates, order placement, and currency converting among other things.

Finally, before selecting a supplier, look for reviews on relevant websites. If you stumble upon negative or zero reviews about a certain supplier, that could be a red sign for fraudulent activities.

Promoting your luxury items

Regardless if you supply your online store with premium luxury items from a reputable supplier, you won’t accomplish much unless you start promoting your store. eCommerce marketing is of crucial importance if you want to reap the benefits of the eCommerce industry. Social media channels are one way of connecting your store to new audiences to sell luxury goods online.

Promoting your brand on social media is one of the most economical ways to do it. Social media is the new “word of mouth”. Remember, you’re the curator of your content in this age of the “curation generation” so make sure you have a distinctive voice and recognizable content so once the customer sees it they know it’s you. Even though social media marketing is an economical way to promote your business, it’s not a very frivolous job. It’s time-consuming and requires some digital marketing skills.

If poorly done, at best, there won’t be results from social media. On the contrary, if done properly, social media could help you build a strong relationship with your customers and increase your revenue.

Getting started with social media marketing

You can start by creating the official pages of your online store on Pinterest and Instagram which currently are the most popular ones because of their visual content. Furthermore, if you’re running an online clothing store, what more do you need, aside from the possibility of a visual presentation of your items?

It’s a known fact that people love visual content more than text. Especially when selling clothing, your potential customers need to see your products, not just a product description. That’s why the demand for visual social media platforms has become quite high, especially Pinterest and Instagram. As an illustration, as of July 2020, Instagram is the most popular social media channel worldwide. In 2018, the platform reported that it reached 1 billion monthly active users. Pinterest, on the other hand, as of June 2020, registered 416 million monthly active users worldwide. Even though statistics show that Instagram is more popular than Pinterest, it doesn’t necessarily mean that it would better suit your online business.

Both social platforms offer unique benefits. Pinterest and Instagram differ in their purposes, and you should start by looking at their positive and negative aspects. There’s always the option to use both so you can get the best of both worlds. Let’s see these social channels more closely.

The basics of Instagram

In 2017, Instagram reported that at the least, 80% of its users follow a single brand, and 60% of them said that the platform has exposed them to products and services that they didn’t know about before joining the platform.

This is a clear indication that Instagram achieves brand awareness for businesses, but in addition, it can encourage buying decisions. People use this social media platform to follow and interact with friends, and family. However, the majority also use it to stay up with the latest trends by following their favorite brands and influencers. In fact, Instagram ads for dropshipping businesses are beneficial because they can target potential customers by using lookalike audiences that help you to reach a new audience of people who are similar to customers you care about.

Anyone with basic social media knowledge has either heard of or used this platform. It’s a very simple and easy-to-use social media network that allows you to create a professional account for your online business and start promoting it right away.

It’s a known fact that people who come to your website don’t always complete the purchase. Therefore, Instagram is the ideal platform for a remarketing strategy to recapture them and gain sales. Retargeted ads will be quite simple to create because users set them up via the Facebook Ads manager using the information you’ve collected about their interests. Then you’ll run them on both Instagram and Facebook. Also, these ads are quite affordable. Advertising via these can cost as low as $1 per day. It means even if you have a limited budget, you can still run ads from the very first day of creating your Instagram page, for brand visibility and awareness purposes.

Using Instagram for promoting your online clothing store

If you choose to use Instagram for promoting your luxury goods you can set up your product feed and then enable settings for Instagram shopping. This way, you’ll be able to post a product with a price tag and a link to your website where it can be purchased. Additionally, you can use Instagram stories to showcase new arrivals and announce special sales and discounts.

Posts that have been enabled for shopping allow you to share your links in a straightforward way instead of having to write “link in bio” on each product post. It’s a much simpler process for buyers who now won’t need to leave the post to go to the bio to click the link. These posts are more effective if your products are visual and self-explanatory.

Nevertheless, using retargeting ads from the beginning means that you can showcase your products to potential customers using videos to tap into that existing customer intent. It’s not mandatory to only use this platform for branding purposes. Just make sure that you set up your retargeting ads from the beginning so that you can build up to selling on Instagram as well.

The basics of Pinterest

Other than being a platform for visual content, Pinterest is quite different from Instagram. It has boards where people can pin content for later use. For example, someone can pin an image that contains links or a video on their board, sort of like bookmarking. Pins will range from what has captured their attention as they go through their feed, to what they’re interested in and have searched for.

Many of the Pinterest users have the intention of buying which opens up a window of opportunity for you as a seller to identify them. They usually pin what they’re interested in for future reference. It’s what makes this platform the most ideal for getting front-end store visitors.

Numerous studies have shown the number of female users to be more than the male users on this platform (or 70% vs 30%, more precisely). However, as visual content becomes more and more popular, more male users are now signing up for Pinterest accounts. In fact, more than half of the new accounts belong to male users. While more women than men use Pinterest, that’s rapidly changing as the platform’s popularity increases.

Using Pinterest for promoting your online clothing store

​It’s more than evident – Pinterest is definitely worth considering. Your target market could already be there, waiting to buy your products. However, remember that Pinterest isn’t as easy to use as Instagram. You can’t just upload your photos or videos, or pin things on your board and wait for people to interact with you.

You’ll need to do a lot more, including watching a few tutorials about how it really works. With success, this kind of research will help you identify the perfect target audience, their behaviors, and their interests. Ultimately, you’ll be able to create and share the appropriate content to them to market your products.

There’s no straightforward answer here because different people own different businesses and sell different products. But Pinterest marketing is still recommended for a majority of business owners. In fact, a 2018 study by Pinterest showed that about 67% of Pinterest users say that Pinterest ads have exposed them to new products and brands.

However, it’s not a must, especially if you’ve just launched your new business. A marketing approach that would help your business gain visibility and increase traffic to your store would be more fitting. For example, start out with Google ads because they can help achieve profitability for your business through increased web traffic. After you’ve successfully launched your business, that’s when you can start looking into other marketing channels that can help you earn even more profits.

Other ways to attract customers to your online store

There are other ways of marketing, of course. Some include SEO keywords, which is a more complex way of ranking better on search engines and requires professional assistance. Getting more knowledge won’t only get you more sales, but new ideas for promoting your products, too. There are beginner courses for digital marketing all over the Internet, so you’ll have to rely on Google for more information on this.

However, aside from the above-mentioned marketing tips, there are additional activities that are proven to be as effective. Here are some you can consider.

Feature attractive visuals of your luxury items

A picture is worth a thousand words. In this case, great visuals will most likely bring in more sales. Unless the supplier provides you with pictures, buy a camera to take some awesome photos of products, for your online store. Some customers love visualizing clothes on themselves, so it would be great to hire a local model for a photoshoot.

Also, if you plan on advertising your store on social media, you could do so by hiring someone to create some awesome graphics. Then, you can advertise some of the visuals by testing two different images (posts) with the same amount of money. For example, spend $100 on each post and check back after a few days. Whichever provides better results, redirect your whole budget to that one, and pause the worst-performing one. This way, you’ll know where to invest in the rest of your marketing budget. In the world of digital marketing, it’s called A/B testing.

Offer discounts and coupons

One way to increase sales while selling luxury goods is to take care of the old customers you already have. A sense of community is present when old customers merge with the new ones. You can include coupons with the purchase. You can also have a customer loyalty program, for example, in the form of a membership card. This card gives customers discounts, a gift with the membership card for a certain amount of purchases, birthday gifts, or an exclusive offer if they recruit another member.

Use designer and brands’ names to your advantage

Dropshipping branded clothes is strong marketing by itself. Who wouldn’t want to buy a dress from Versace, Armani, or Dolce & Gabbana? Who wouldn’t want to wear an authentic Michael Kors handbag? People are hooked up on famous and renowned brands and designer names and they are following the fashion trends.

If you bring some timeless Dolce & Gabbana or Michael Kors pieces you can promote them and gain more attention. With respect to these giants, you can use these names to your advantage, but make sure to follow the rules and regulations in terms of advertising.

Explore geotargeting

If you target customers globally, then know this – certain countries stand out from the rest, and it’s not just the U.S. There are numerous countries to target when dropshipping branded clothes.

Platforms such as Google Adwords offer the possibility to target specific locations. Of course, you’ll need to check with your local delivery services first. Other than that, if you’re targeting U.S. audiences only, there’s much to learn about America’s most prosperous cities. This way, you’ll be more precise about who you want to become your new customer.

Don’t increase your prices dramatically

Think of it like this. When running an online boutique for luxury clothing, sellers usually buy their products at wholesale prices. So, it’s important not to get greedy and increase your retail prices dramatically. Naturally, by selling luxury clothing you’ll have higher profit margins than the ones you would have with selling cheap clothing.

Don’t get cocky with your customers only because you’ve earned a lot of money last month. They are the main reason for this kind of income, and without them, the balance for next month will surely decrease.

Provide exceptional customer service

Finally, this is one of the most important things. Good customer service is the best strategy for a successful online store that sells luxury goods. The more satisfied customers, the more people will hear of you treating them right.

When there’s no way to treat your customers like royalty online, it’s only natural to provide them with the best customer support possible. Make sure they are taken care of well, to get that feeling of ‘being cared for’.

How can you achieve this? Make sure the live chats are in real-time, offer them free delivery for orders over a certain amount of money, and even provide coupons for discounts. This way, you’re making sure they will still be loyal to your store.

Moreover, hearing what they have to say is important because the only way to improve is to accept customer critiques. They’re the only ones that see what’s good and what needs to improve in your store.

Additionally, be honest as much as you can. Especially when it comes to your shipping and delivery times. Every customer needs to know how long will they wait until the product arrives. Specify your approximate dates for delivery of packages, regardless if you or your supplier is responsible for the shipping.

If possible, provide them with a tracking code to check the current status of their shipment. Also, it’s important to apologize if there’s any delay and react by immediately calling the delivery service to solve any issue. Taking care of your customers puts them above everything else, and they will surely develop a certain feeling of affinity for your shop. This is the best way for many eCommerce resellers to gain a loyal audience.

In a nutshell

Opening an online store to sell luxury goods isn’t a complex thing, however, there are some things you’ll need to take care of. To sum up the above-explained steps, the first thing is setting up a shop on an appropriate eCommerce platform or WordPress. Once you set up your store, finding an authentic supplier of luxury goods to build a long-term business relationship is vital.

Upon finding a safe-to-work-with supplier for your luxury products, it’s crucial to keep this business relationship healthy. Why is this necessary? Sure, you can find new suppliers, but buyers won’t wait for you to restock. If you don’t want to lose customers, make sure to be in constant communication with your supplier to make sure you have a secure supply of goods at all times.

Later on, mastering skills and ways how to promote your luxury goods and brands is something you mustn’t neglect. Make sure to promote your luxury items using multiple marketing channels. Use social media to your advantage, especially Pinterest and Instagram.

In the end, providing your customers with premium service and support is what will bring you the biggest benefit. As long as your customers are happy and satisfied, they will keep coming back, and your business will be blooming.

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