7 Steps to Start a Sock Business (1st $1,000 in Sales)
If you want to start a sock business, the main key to success will be focusing on a niche audience and offering them something that other brands are not.
- Identify a Niche Audience
- Find a Niche Product
- Define Sales Channels
- Identify the Minimum Budget
- Form a Legal Entity
- Set Up the Shop
- Reach First $1,000 in Sales
How to Start a Sock Business?
1. Identify a Niche Audience
Before you begin selling socks online, you’ll need to select your niche audience. This is the unique group or demographic of people who you will aim to sell your products to.
It’s important to begin with this step, as it will help guide your sock business and the products you choose to sell, how you market your business, and more.
The more you narrow in on your niche market from the beginning, the better. When you sell your product widely to everyone, you may end up selling to no one. Your target market needs to feel like you’re addressing their needs personally through your products, which you can’t do through generic messaging.
Here are some examples of niche audiences:
Business idea: Sock store for children.
Potential niche audience: Mothers and caretakers who are interested in natural products that are sustainably sourced and organic.
Potential market gap: It’s hard for caring mothers today to find socks that are 100% cotton and organic and made without harmful dyes and chemicals.
Business idea: Patterned socks for Millenials
Potential niche audience: Millennial consumers who like staying up-to-date with trends and are interested in fashion and apparel
Potential problem: Millennials want to take part in current trends with their socks, though there aren’t sock stores that quickly release products as they’re relevant.
1.1 Analyze Sock Niche Communities
As you do your research to identify the niche audience for your socks business, you should go online to learn from some of the main communities in the space.
By observing them online, you can get a real sense of their problems, concerns, and ideas for a socks small business. This can help you stay in touch with the actual needs and wants of your potential customers.
Some of the main places online where you can find these communities include Reddit, Quora, other forums, Facebook, Instagram, and TikTok.
Here are some examples of sock niche communities:
1.2 Find a Problem or a Market Gap
While you’re doing your research on these communities, try to identify recurring problems or concerns that they express.
Specifically, you’re looking for problems or market gaps that you could potentially address with your sock business online.
For example, you may recognize that mothers and caretakers have a hard time finding socks made from natural and organic materials for their small children.
Or maybe you notice millennials are looking for sock stores that stay up-to-date on current social media trends.
So as you’re looking to identify market gaps, ask yourself the following questions:
- Who uses socks? Why?
- What problem is the product solving? Are there many problems?
- What products could make their lives easier? Happier?
1.3 Formulate the Niche Audience
With these points in mind, you can select the niche audience for your sock store. Consider some of the major problems and market gaps you gathered from the online communities and how the current market is neglecting their needs.
So as you go forward with starting a sock business, recognize who your target audience is and what problem they’re looking to solve with the products you sell.
For example, consider the mothers who are looking for socks made out of natural materials to put on their children. With your online sock store, you can offer products that are organically sourced and gentle on children’s skin.
Here are some examples of niche audiences:
- Mothers and caretakers wanting to dress their children in natural materials
- Millennials interested in staying up-to-date on current trends
- Female athletes interested in sustainable fashion
2. Find a Niche Product
With your niche audience in mind, you need to identify the actual products you’ll sell to them as a solution to their unique problems.
Throughout this stage, you need to come up with specific ideas for products while always keeping their concerns and problems in mind.
Consider Uber, which addressed consumers’ need to conveniently get a ride from anywhere with transparent rates. Or Zoom, which was the first platform of its kind to support cheap videoconference calls.
In either case, these companies identified the needs of their market and brought about helpful products that met their needs.
2.1 Analyze the Competitors
While facing competition may seem daunting, this can actually be a good sign–it means there’s money to be made in the industry.
You can do a quick Google search for the products you are thinking of selling, like “organic cotton socks for kids”, and create a list of at least 5 peers you’ll be competing with.
Analyze your main competitors to see what niche audience they’re going after and what unique problem they’re trying to solve–or whether they have generic messaging and are targeting a wide audience.
You can check out specific promotions they offer, like buy-one-get-one-pair-free or other similar deals that you can leverage in your own store.
2.2 Unique Selling Proposition
If you run a sock shop online, you need to find a way to differentiate your products from competitors.
To do this, you need to identify your unique selling proposition (USP). This is the unique feature of your product that sets it apart from your peers and allows consumers to compare them clearly.
Maybe your socks are 100% cotton, not 98% like competitors. Or perhaps your cotton socks are GOTS-certified organic, while the socks your peers sell are not.
In any case, think of the specific things that you do better than your peers or how you address your audience’s needs more accurately.
Here are some examples of USPs from popular brands:
- FedEx: “When it absolutely, positively has to be there overnight.”
- M&Ms: “The milk chocolate that melts in your mouth, not in your hand.”
- Slack: “Slack is your digital HQ.”
- Patagonia: “We’re in business to save our home planet.”
- HelloFresh: “America’s most popular meal kit.”
2.3 Choose a Product
With your target audience in mind, you can hone in on their biggest problem with the available socks on the market today and reiterate how your sock store will be different in addressing their needs. This will guide you to the actual products that you will sell.
Maybe you’re looking to sell to conscious mothers who want to dress their kids in quality, organic materials. So, you can decide to sell children’s socks that are made out of 100% cotton and free from any harmful dyes or chemicals.
As you can see, this is a specific product idea that will clearly meet the needs of your target audience.
2.4 Find Suppliers
To find good suppliers for your sock store, you’ll need to do your research to ensure you’re getting quality products at reasonable prices.
Do a Google search or check through some forums to generate a list of potential sock wholesalers. Check out the reviews they’ve earned from customers, in addition to any order requirements they have.
Some of the larger suppliers may have minimum order quantities starting at $2,000, which may not be feasible for early-stage sock stores. So, consider checking out some of the smaller factories that are highly rated and request order samples to test the quality for yourself.
For further research, check out some of the following resources to help you discover the sock supplier that’s right for your business:
Related: How to Start a Bath Bomb Business?
3. Define Sales Channels
Each sock store will generate sales differently, though there are a variety of sales channels to consider.
Some store owners will have access to certain professionals or resources to help guide them, or maybe you have sales experience yourself.
In any case, sock store owners need to consider all the potential resources available to them and map out how they plan to promote their business.
In the beginning, you may promote your socks within your personal network like to friends and family, though you will need to eventually widen your scope and bring in new customers using other methods.
Here are some examples of potential sales channels:
- Your personal: Facebook friends, Instagram followers, colleagues, schoolmates
- Paid advertising: Google ads, Facebook ads, Tiktok ads, Twitter ads, Pinterest ads
- Marketplaces: Amazon, Etsy, eBay
- Communities: Facebook groups, Reddit, Quora, forums
- Other: Blogging, Craigslist, promoting in the real world (e.g. schools, workplaces, malls)
4. Identify the Minimum Budget
Many people looking to open a sock shop may be concerned about the amount of money they need to get started.
However, this is often a common misconception that you need a lot of money to start a business. If that were the case, there would be no small sock businesses!
Focus on how much you’ll need to get your first $1,000 in sales. After you have a positive track record of making money, banks and lenders will be more willing to lend you the money you need to move forward.
So, think of the minimum amount you need to reach this first sales milestone. For example, how much product will you need to buy to make this much money?
If you sell each pair for $10 and it takes you $4 to source them, you’ll need to sell 100 pairs, which will cost you $400 upfront, plus any spend on promotion and advertising.
4.1 FFF and Personal Money
Some people who want to open a sock shop will use personal or FFF money, which stands for “friends, family, and fools”.
This can be a good choice for those just starting out with no track record, as it would be hard to get traditional financing at this point.
So if you don’t have the funds yourself to bootstrap the operations and purchase inventory on your own, see if someone in your circle is willing to provide you with the necessary funds.
Make sure that any funding you receive has clear terms, like if the person is expecting repayment or not and how quickly.
4.2 Bank Loans
Another funding option to start a sock line is with bank loans. This is a traditional route to business financing, though there are some strict requirements that lenders place on applicants.
Banks will consider your credit, business history, pitch deck, loan proposal, and more when considering your business for a loan for your sock business. Because of this, it may not be a viable option for those just getting started.
However, you can shop around for lenders that have flexible requirements and apply for their business loans. Upon approval, you will receive the funds in your account and begin repayment plus interest the following month for a set period, usually 5 to 10 years.
4.3 SBA Guaranteed Loans
Sock sellers may consider SBA loans or bank loans that are guaranteed by the Small Business Administration (SBA).
With the SBA guarantee, lenders don’t face the same amount of risk as they would otherwise, making them more willing to lend to small businesses. The SBA has certain requirements around who qualifies for their products, but in general, you have to be a small, for-profit business based out of the United States.
To secure this method of funding, you need to find a lender that offers SBA loans and apply. Once you’re approved, you will receive the funding to your bank account and make monthly repayments plus interest over the next 5-10 years typically.
4.4 Government Grants
Government grants can be a good type of funding for small businesses because the money doesn’t need to be repaid. Even still, government grants for small businesses like sock stores are not always available, and when they are, there is stiff competition to receive them.
Plus, government grants may have very niche requirements and stipulations for applicants based on the type of business they do or where they’re based. Additionally, the turnaround time between application and receiving the funding can be lengthy, so it’s not a quick source of capital.
However, if you find a government grant that you could qualify for, feel free to fill out an application. After all, it is free money and it doesn’t hurt to apply.
Crowdfunding is available on a number of sites today, including Kickstarter and Indiegogo.
With this method, a large number of investors provide you with small sums of capital, receiving a portion of your business in return.
It’s a low-risk way to receive capital from the public to finance opening a socks shop and is easy to get started by making a page on one of the platforms. However, it may be a better option for the sock stores that have some level of public interest already, as these sites can be quite competitive.
When you want to access the funds, you can simply make a withdrawal from the money you received from interested investors.
5. Form a Legal Entity
Getting your custom sock business formally registered is the prerequisite to paying your taxes, opening up a business bank account, and securing external funding at some point. So, it’s an important step that you shouldn’t overlook.
For even more protection, establish your business as an LLC, which can help minimize the personal risk you face as a business owner.
In any case, you want to make sure this step is done correctly from the start. So, you may want to consult with an expert to make sure that everything is set up properly and in your best interest.
5.1 Business Name
You don’t need to overthink coming up with sock shop names too much, as you can always change the name later on.
However, put some good thought into this to come up with a name that’s unique and gives a hint about the products you sell and who your audience is.
It’s important to note that business names that are easier to say and spell tend to perform better, so this is something to keep in mind as you come up with your business name.
Plus, you can do a quick search for sock business names to make sure the name you come up with isn’t protected by any trademarks or patents.
5.2 Choose a Business Structure
As we briefly mentioned above, forming an LLC is a recommended route for new business owners, as it will offer the business owner better protections than when operating as a sole proprietor or in a partnership.
However, here are some of the main options:
- Sole proprietorship: no legal distinction between the business and the owner; the owner pays all the debts of the business and receives all profits
- Partnership: similar to a sole proprietorship, but between two or more people
- LLC: makes the business a separate legal and tax entity from the owner, who is not liable for the business’s debts or losses
- S Corp: not necessarily a legal structure, though it is a tax classification for LLCs and corporations where income is passed directly to shareholders
5.3 Register for Taxes (EIN)
Registering for an employer identification number (EIN) allows your sock-selling website to pay your taxes, open up a bank account, and hire employees.
You can easily apply for this online through the IRS website, or you can apply by mail. When getting your EIN, you’ll also need to select the tax year for your business, which can be the calendar or any other 12-month period that will dictate when your taxes are due.
It’s important to note that those operating a sole proprietor can simply use their social security number as the EIN.
5.4 Bank Account & Credit Card
Opening up a business bank account and credit card will keep your personal finances separate from the business. This will be beneficial come tax season by keeping all income and expenses organized and documented.
Once you have your EIN, you can visit nearly any bank to open up a bank account, where they may request other documentation like your articles of incorporation before approving your application.
You can shop around among different banks to see which one offers the most generous features or offers for businesses and select your preferred one to bank with.
5.5 Insurance & Accounting
Getting business insurance may not be an obvious step for those who are selling socks for a living, though you should still consider it.
There are a number of different types of insurance policies you can get as a business selling socks, which can protect you from any devastation in the case of an unexpected occurrence.
Many business owners will opt for a general liability policy, which is a catch-all that covers many different scenarios. However, other policies to consider include business property, worker’s compensation, professional liability, or a business owner’s policy.
Plus, you’ll need to invest in accounting or bookkeeping software that will keep your finances in order throughout the year and help you accurately calculate your tax liabilities.
5.6 Permits & Licenses
Lastly, if you’re selling socks for profit, you’ll need to do your research to ensure you have all the necessary permits and licenses at the local, state, and federal levels to do business legally.
Some of the main types of permits you may need include:
- Doing business as (DBA) permit in your state
- Health licenses
- Trademarks, patents, copyrights, etc.
- OSHA permits
Consult with your state’s Secretary of State Office and local municipality to see what licenses and permits are required where you live to stay fully compliant with the law.
The last thing any early-stage business owner needs is to face legal action for missing the proper business licenses and permits.
6. Set Up the Shop
Your website is the actual transaction engine needed to sell socks online, so it’s important to get this step right.
Keep in mind that you don’t need to spend the most money developing your sock store site, but it should be visually appealing and made with your target audience in mind.
Creating your website will largely be a trial-and-error process. This is a fluid asset that you don’t need to worry about nailing on the first try.
So, feel free to try things out like different color schemes, messaging, copy, and layout to test what customers respond best to.
6.1 Define the Pricing
Put some thought into setting prices for your sock store, but don’t sweat it too much. You can always adjust your prices on the website later on once you’ve gathered feedback and observed your performance with customers.
Consider the costs to your business to sell one pair of socks, then mark up the price accordingly.
For example, if it costs you $4 to source a pair of socks and you spend $2 per pair on marketing costs, your total cost of selling one pair is $6. If you’re looking to get a 40% margin, you need to sell socks for $8.40 per pair.
6.2 Create an Online Store
Creating an online store is actually much easier than many may think. There are many platforms out there for online sellers to create their storefront, though Shopify is a leader in the industry and widely used among merchants.
Online sellers can create an account with Shopify, connect it to their business domain, and get started organizing the site as they wish. They can add in new products with a product title, description, and photo for customers to browse.
Once you go live with your store, you will be able to accept payment on your Shopify page, manage inventory, shipping and more.
6.3 Order Inventory
Figuring out how much inventory to order is a crucial step because you do not want to order more than you’ll be able to sell and sit on unsold stock for months. Or, you could order too little and face shortages of customer favorites early on.
It’s recommended to those who sell socks online to purchase enough inventory to make their first $2,000 in sales. Going along with the above example, if you’re selling your socks at $8.40 for each pair, you would need to order about 240 units to fulfill $2,000 worth of sales.
7. Reach the First $1,000 in Sales
Once you’ve carefully gone through each of these steps, you should have a very well though-out sock online store.
At this point, your only focus should be to hit your first $1,000 in sales–nothing more. The easiest way to reach this milestone is to sell to your friends, family, and anyone who agrees to listen to you.
This typically works because you already have the rapport and reputation with those closest to you for them to make the initial purchase. Then, if you have quality products, they’ll likely order again.
There are other ways to promote your store for free once you’re just starting, including advertising your sock business on Instagram, Reddit, Facebook groups, and other social media platforms.