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How To Start A Personal Shopping Business

How To Start A Personal Shopping Business

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How To Start A Personal Shopping Business

How To Start A Personal Shopping Business

Is a store your happy place? Do you recognize a bargain when you see one? Do you know where to snap up the best pieces to follow the latest fashion trends? Or do you have a knack for sourcing personalized gifts or specialty foods? If so, how does shopping and running errands for a living sound? That’s what personal shoppers do. If you take that one step further and start a personal shopping services business, you’re looking at a business that is inexpensive to start and can generate a large profit.

This guide will provide an overview of the personal shopping business, steps to get started, industry trends, and answers to common questions.

Business Overview

As a personal shopper, you will shop or run errands for someone else. Personal shoppers assist with anything from providing personal grocery shopping services to picking out gifts to finding furniture. Many personal shoppers also buy clothing and accessories for their clients. They might go shopping on clients’ behalf to save them time, or they might go shopping with them and advise them on styles and trends. These personal shoppers work directly for clients or their personal stylists.

You typically don’t need to be qualified to be a personal shopper, but a solid understanding of trends and new products and an existing network of potential clients will help greatly to get your business off to a good start. If you intend to offer personal shopping services for clothes and accessories, your style and wardrobe will be your business card.

A personal shopper service can be a full-time business or even one to offer as a side job to make a little extra income.

Industry Summary

The personal shopping industry has grown steadily in recent years. With busy schedules and expanding online options, many consumers are overwhelmed when it comes to shopping. Working with a personal shopper saves them time and money while still getting expert advice.

The industry is shifting towards more virtual and on-demand services as well. Video chat and mobile apps allow personal shoppers to interact with clients remotely. This increases flexibility for both parties. Sustainability is also becoming more important, as consumers want eco-friendly brands and recycling services. Personal shoppers with expertise in these emerging areas will have an edge.

That said, this is a fiercely competitive industry. Especially luxury fashion boutiques and large department stores such as Bloomingdale’s often offer in-house personal stylists and shopping services to their clients. And don’t forget the growth in the home delivery options of retailers and grocery stores.

Target Market

What your target market will typically have in common is a relatively high disposable income, a lack of time or desire to do their own shopping, and/or they are uncertain about styles and trends.

From here on in, you will have some decisions to make. And these should be based on your preferences and expertise, of course, but also your competition. It is worthwhile to do some serious market research at this point. The range of services you offer will also depend on whether you will employ additional staff.

Steps To Start A Personal Shopping Business

You might be wondering, “How do I even start?” Well, you’ll need to consider some fundamental steps: market research, business planning, and legal requirements, just to name a few. Here is a breakdown of the essentials to get started.

Step 1: Research the Market

Before you dive headfirst into starting a personal shopping business, it’s important to pause and assess the landscape. Will there be enough clients interested in your services to make the venture worthwhile? While there’s no crystal ball to predict business success, market research is the best way to confirm whether starting a business is worth investing your time and resources.

By researching the market, you can get a better understanding of the following:

  • Who your target customers are and what their needs are
  • How much competition there is
  • What pricing strategies are successful
  • What marketing channels are most effective

By understanding these factors, you can develop a business plan that is more likely to be successful.

A few ways to go about finding out if there’s an appetite for your services:

  1. Surveys and questionnaires: Create and distribute a survey among your social circle and beyond. This can provide direct insight into people’s willingness to use a personal shopper.
  2. Social media polls: Platforms like Instagram and Facebook allow you to run polls. This is a quick way to gauge interest among your existing network and followers.
  3. Competitor analysis: Check out how many personal shoppers are already active in your targeted location. Too many might mean saturation, but none could signal a lack of interest.
  4. Online marketplaces: Websites like Thumbtack or TaskRabbit can give you an idea of how many people are looking for personal shopping services.
  5. Local business directories: Browse through directories to see if there’s a listing for personal shopping services. The more you find, the better it might bode for your venture.
  6. Community boards and local events: Local forums, message boards, or even community events can provide anecdotal evidence of demand. People often express their needs and wishes in these less formal settings.
  7. Google Trends: This free tool can give you an idea of how many people are searching for personal shopping services in your area. More searches typically indicate higher interest.

Step 2: Write a Business Plan

The step of writing a business is optional, though I recommend it. A business plan is more than just a document; it’s a roadmap that lays out the path your personal shopping business will take. Writing a business plan shouldn’t be thought of as a formality, it gives you the opportunity to plan through every aspect of the business, from marketing to the potential profitability.

Related: How to write a business plan

Step 3: Register the Business

If you’re starting a personal shopping business, it’s important to ensure that your business is registered and legal. The specific steps required to register a personal shopping business can vary by state, so it’s important to research the requirements in your area. However, here are some general steps to consider:

Choose a business structure: There are four main types of business structures: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). Each structure has its own advantages and disadvantages. While there is no one-size-fits-all solution, sole proprietorship is the easiest and lowest cost, while the LLC or corporation offers liability protection for your personal assets.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: You won’t need a specific license to offer personal shopping services, but as a business owner, it’s important to identify the necessary general business permits and licenses in your area.

These vary based on the state and town where the business is located, but some common registrations include a local business license, sales tax permit, and Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Step 4: Determine Pricing

Pricing can make or break your personal shopping business. Price too high, and you risk alienating potential clients; too low, and you might not cover your costs or value your time appropriately. Here are some tips on how to find the sweet spot.

Know Your Costs

Before you can set any prices, get a handle on your operating costs. Factor in everything from the cost of transportation to shops, time spent on client consultations, and even your research time to stay ahead of trends. Understanding your costs will give you the baseline price below which you can’t afford to go.

Consider Your Target Market: 

Who are your ideal customers? How much money are they willing to spend on personal shopping services? You need to set a price that is affordable for your target market.

Evaluate the Competition

What are other personal shoppers in your area charging? Don’t forget to consider the level of service they’re offering. Are they providing in-person consultations, virtual styling, or both? This will help you gauge what potential clients might be willing to pay.

Offer Different Pricing Options: 

Consider offering different pricing options, such as hourly rates, package deals, and commission-based pricing. This will give your customers flexibility and allow you to attract a wider range of clients.

Factor in Time and Expertise

It’s easy to forget the years of experience and skill you bring to the table. Your expertise is valuable, and your pricing should reflect that. The more specialized your services, the higher the price you can command.

Step 5: Create a Marketing Strategy

With the opening of your personal shopping business quickly approaching, the next step is to create a marketing strategy to let people know that your business exists. There are a few common ways personal shopping businesses handle this.

One effective approach is through building an online presence. Creating a high-quality website and using social media channels like Facebook, Instagram, and Twitter are excellent ways to showcase your services and target potential clients. Make sure to post regularly about your services, promotions, and events.

Claiming your business on relevant online directories should also be on your to-do list. Sites like Google Business Profile can help your business show up in local searches, and customer reviews can significantly impact new customer acquisition. Similarly, Yelp and other business directories are platforms where potential customers often go to read reviews and get a sense of what services you offer.

Networking offline is just as important. Some personal shoppers also find value in partnering with local boutiques or department stores; it’s a win-win relationship where the store gets additional business, and you get to offer exclusive deals or early access to sales for your clients. Also, once you start getting clients, word-of-mouth marketing can be incredibly powerful. Encourage satisfied clients to refer their friends and family to your services and consider offering discounts or other incentives for successful referrals.

Also, if you are looking for a quick way to launch and start bringing in some money, you can start out as an Instacart shopper. While not as profitable, the hands-on experience you gain can give you an edge in time management, picking quality products, and offering top-notch customer service.

Step 6: Prepare to Launch

The specific needs of every personal shopper business will vary, but these are some common steps to consider before starting your business.

Business insurance: Consider purchasing business insurance to protect your business from liability and unforeseen circumstances. Types of insurance to consider include general liability insurance, professional liability insurance, and workers’ compensation insurance if you have employees. We recommend getting at least three insurance quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price.

Bookkeeping: Set up a bookkeeping system to keep track of income and expenses. This can be done using software such as Wave Accounting (FREE) or Quickbooks or hiring an accountant.

Contracts: Depending on the specifics of your business, you may need contracts for clients, employees, and independent contractors. These contracts often include clauses for confidentiality, payment terms, and the scope of your services.  RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Bank account: Set up a separate bank account for your business to keep your personal and business finances separate.

Credit card processing: Offering multiple payment options makes it easier for clients to do business with you. Services like Square or Stripe can be beneficial here.

Greg’s Tip: Consider specializing in a particular niche, such as men’s fashion, women’s fashion, or personal shopping for busy moms. This will help you to stand out from the competition and attract clients who are looking for specific expertise.

Greg's Business Tip

Common Questions When Starting A Personal Shopping Business

How much does it cost to start a personal shopping business?

Becoming your own boss in this industry is relatively easy and does not require a huge upfront investment. The cost can vary to start, but expect initial expenses to range from $1,000 to $10,000, plus a vehicle. Let’s break down these costs:

Business registration: Registering your business can cost around $50 to $300 depending on your state and the type of business structure you choose.

Insurance: General liability insurance for a personal shopping business usually ranges from $400 to $1,000 for initial coverage. This protects you from potential issues that could arise. You would also want to look at your personal auto insurance coverage as your current coverage may not cover an accident while performing business duties.

Location: A personal shopping service is the ideal home-based business and you will likely not need to rent an office or warehouse space unless you are, of course, planning to employ staff for your new business or you want to stock staple items.

Marketing: Initial marketing costs can also vary widely based on the strategy. Basic marketing materials like a logo, business cards, a website, and some online ads can cost around $300 to $1,000 initially.

Other costs: Other miscellaneous costs include transportation (if not using your vehicle), office supplies, and software which may add another $200 to $500 to your start-up expenses.

How profitable is a personal shopping business?

When starting a personal shopping business, profitability potential depends heavily on your client base and fee structure. However, looking at typical industry standards provides a general idea.

Most personal shoppers charge between $50-$150 per hour, with an average of $100 per hour. While top performing shoppers in major metro areas can command rates of $250 per hour or more from high-end clientele when first starting out you’ll likely charge $50-$75 per hour as you build up your reputation and expertise.

Basing estimates on an average rate of $75 per hour, and assuming you can book approximately 20 hours of client appointments per week, you could generate around $3,000 per month in revenue or $36,000 per year. Factor in business expenses which generally range from 40-50% of revenue for services businesses. Using 50% for this example, expenses of $18,000 per year would result in $18,000 in profit.

This is an approximate baseline using industry averages. Profitability increases exponentially as you are able to command higher hourly rates, take on more clients, and control your expenses. Exceptional personal shoppers can easily clear $100,000 or more in annual profit once established.

What skills are helpful when running a personal shopping business?

Credentials and competence: You typically don’t need a degree or specific qualification to start your personal shopping services business. Your credentials are your style and happy, long-term clients. You need to be a competent shopper who can work to a client’s budget. A background in the fashion industry is a plus if you decide to be a personal clothing and accessories shopper and style adviser. Understanding how clothes fit and which styles will be most flattering to your client’s shape and are appropriate to their lifestyle and tastes is very important in this business.

Stay up to date and on top of trends: Having your finger on the pulse is a vital aspect of your work, regardless of what personal shopping services you will offer. Being knowledgeable about the latest trends, gadgets, and innovations, about new shops or new products being released is necessary across the board. Stay connected with your network and your industry. It’ll help you stay ahead of the game and offer your clients a competent and personalized experience.

Excellent interpersonal skills: You’ll be an excellent listener and sensitive to your customers’ needs and tastes. You’ll also need to be able to clearly communicate your ideas and discuss these in a positive way. Also, be prepared to support a style or taste that doesn’t necessarily match your own.

Time management skills: Managing your time well so that the right products reach your client on time and with a smile is critical. There is also a certain amount of troubleshooting skill required, especially when, for example, the gown for the evening’s event doesn’t fit, there are traffic jams, or you have several pick-ups and deliveries to make. Managing your bookings and understanding the time commitment for each one of them is crucial.

What is the NAICS code for a personal shopping business?

The NAICS code for a personal shopping business is 812990, which is categorized under A.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

Resources:

Resources:

https://www.thecut.com/2014/09/most-famous-personal-shopper-in-the-world.html

https://www.vanityfair.com/style/2016/12/christmas-shopping-rich-and-famous

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

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How To Start A Personal Shopping Business

How To Start A Personal Shopping Business

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