The Costs Involved in Starting a Lingerie Shop and Setting Up an Adult Merchant Account

Jun 11, 2015

Starting a lingerie business involves many costs like any new business. However, the costs will differ greatly depending on several factors. The location, inventory, equipment and marketing will all impact your startup and operating costs; it will also depend on whether you are making the lingerie wholesaling or at retail.

As far as location, you will have to decide where your business will be based. A home-based lingerie business will simply involve a stack of boxes in your home office, and the costs will be minimal. A retail lingerie shop, on the other hand, will have more fees. You will need to pay lease payments, a security deposit along with a year-long lease agreement; this agreement could vary from a thousand dollars to several thousand.

A great alternative to opening a brick-and-mortar establishment is to sell your lingerie through a website. While you will still have costs for hosting, web design, registration and graphic design, the costs will be much less. The costs might range from a few hundred dollars to several thousand.

The inventory you keep will depend on the business structure you choose as well as your target market. The material for a nightgown, for example, can cost anywhere between ten dollars to over one hundred dollars. If your intention is to sell custom lingerie, you might have more high-dollar material, but very little products for inventory. On the other hand, if you plan to sell lingerie on the web, you will need a full range of colors, sizes and types; therefore, the amount and variety of your inventory will be much broader.

Equipment needs will also vary. Custom products will require commercial-grade sewing machines, sequins, embroidery threads, etc. If you plan to go the brick-and-mortar route, you will need display racks, a point of sale terminal, software, etc. All of these costs must be planned and accounted for from the start.

Every business must develop strong marketing strategies. Like every other aspect of starting and operating a business, this too costs money. These costs may include brochures and cards. Depending on your business structure, these advertising costs can range from one hundred dollars to one thousand.

Unfortunately, finding funding can be difficult for any business that falls within the adult industry. Traditional lending sources are typically hesitant to offer their services. Thankfully, alternative lending sources have stepped in to offer these businesses solutions that meet their unique needs. Adult lingerie shops can now apply for adult merchant accounts for their funding and payment processing needs.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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