Parents burdened by the cost of baby clothes may soon have an inexpensive option after one University student’s efforts to design an online retail service.

Engineering senior Allen Kim has become the first student from the University to be selected as one of the top five finalists in Entrepreneur Magazine’s College Entrepreneur of the Year competition for his company, Bebaroo, which he described as “Netflix for baby clothes.”

Bebaroo.com offers a service where parents can dress their young children — between the ages of zero and two — “more affordably, more conveniently and more stylishly,” Kim said.

Kim said the inspiration for the company came from his own experience with a family member who complained about the cost of baby clothes, notably those for special occasions.

The website, he said, allows parents to order clothes available on the website and send them back for free once their child either no longer needs them or has outgrown them. Bebaroo currently ships clothes to locations nationwide.

Kim added that by using Bebaroo, parents rent clothes for a fraction of the retail prices because they pay a fixed monthly subscription price instead of buying individual clothes. However, parents have the option of also purchasing the clothes at discounted prices.

Bebaroo offers different monthly pricing plans, depending on how many clothes or brands parents would like to rent, according to Kim.

Kim said he and Luis Calderon – the co-creator of Bebaroo – started working on the business after attending the University's Bay Area Entrepreneur Experience trip to San Francisco in March, which was sponsored by the Center for Entrepreneurship and the Zell Lurie Institute.

While on that trip, the pair was able to survey over a hundred parents by visiting shopping malls, day care centers and online forums, Kim said. He added that they received positive feedback from parents, which gave them confidence that the venture could succeed with the demand for affordable baby clothing.

Kim also said the Bay Area Trip helped them recognize the feasibility of Bebaroo after gaining the attention of several venture capitalists in Silicon Valley. He said he and Calderon plan to work on the business full-time after graduation.

After creating this concept, Kim said he applied to Entrepreneur Magazine’s College Entrepreneur of the Year competition by submitting a business concept, target customer profile and proposed company mission statement.

Kim said he believes that Bebaroo was selected as one of the five finalist companies, because there are no other baby clothes rental services in the country and that the novelty of the idea may change the way parents clothe their kids in the future.

“I want to think that being recognized as a finalist for this competition means there is that much need for this kind of service available for parents,” he said.

Entrepreneur Magazine will announce the winner of their College Entrepreneur of the Year competition by Sept. 15. The winner will be profiled in Entrepreneur Magazine's January issue as well as in a follow-up article in the December 2011 issue.

The winner of the competition will also receive $5,000 to start their business, a $500 gift certificate for The UPS Store, a selection of Entrepreneur Press books and a year's subscription to Entrepreneur Magazine.

Kim added that winning the competition would also showcase Michigan’s entrepreneurial community as having many networking opportunities with investors, alumni and business mentors.

“For the first time a Michigan student has been selected as a finalist of this contest, and I want to bring the trophy back home,” Kim said.