For a fashion business, you’ll want to track your sales and profits, but there’s so much more to think about before you can get there. When starting a clothing line, begin by assessing your start-up costs.

When you start your own clothing line business, these costs will include:

• your fashion brand design (logo, business cards, and website)
• any license or permit fees
• deposits and rent for a physical work location if you plan to lease your workspace
• basic infrastructural costs like phone and internet service, invoicing software, etc…
• marketing and advertising costs
• sewing or design tools (sewing machines, scissors, rulers, pattern makers, fabric printing accessories, t-shirt templates, etc.)
• materials for your first clothing line collection (fabrics, notions, and embellishment decor)
• hourly wages to cover your design and construction time

If you plan to hire any employees, you’ll want to budget their wages into your start-up calculations as well. After all, a successful clothing line means that you’ll earn a profit after all expenses.

Once you know how much it will cost to get you started with your fashion brand, compare that with the funds you have. Then plan how you’ll make up any difference. (See section 9 below to learn how to find a partner or investors.)

If you’re starting a Cut-and-Sew line, you’ll need to get in the habit of calculating how many yards of fabric is required to make your garments so that you can buy enough, but not too much. If you’re planning to work with pre-made wholesale clothes, you’ll want to shop for the best prices at your quality point so that you can hit your target price point.

Running smart calculations to determine how much it will cost to create your clothing line collection and the clothing items in that collection will allow you to plan and think about pricing.

Setting Your Prices

To create an innovative and effective pricing strategy, you have to start by knowing how much it costs you to produce your clothing items – also known as cost-per-unit or “CPU.” The small business finance experts at Bond Street explain:

Most businesses in the apparel world use a cost-based pricing strategy, in which the final cost to the consumer ultimately comes from the cost of producing that product.

But, the CPU is only a starting point. It’s important to bake the cost of running your business (and some profit!) into your clothing prices as well. Otherwise, it will be challenging to sustain your business over time.

You may dream of owning your brick-and-mortar shop – or maybe you fantasize about seeing your labels on the rack at Nordstrom’s. Either way, for an apparel business to scale and grow, it must have price points for retail and wholesale.

Toby Nwazor of Entrepreneur magazine recommends that you aim for prices 30% – 50% higher than your expenses to ensure a profit. Profit is, after all, essential to your business’s success.

Once you’ve done the math, it’s time to start considering the less-tangible aspects of pricing – competitor pricing and perceived value. These factors help you pick a price point that makes sense for you and resonates with your target market.

Your potential customers are shopping for more than just your clothes. They’re shopping with your competitors, too.

And they know how much those clothing items cost. Consciously or not, they gather data about what they think a product like yours should cost.

That means you need to understand your target market, your sales channels, and what your competitors are charging, too.

You might feel that your clothing line is worth more or that you want to charge less than your competitors. And that’s okay.

But, if you’re entirely unaware of what your competitors charge, you may miss the mark completely – either costing you profit if you charge too little or sales if you charge too much.

Perceived value is the amount that a customer thinks a product is worth. And, your competitor’s prices are a part of that perception. But, not the whole picture.

The appearance of your clothing plays a role. A cheaply made shirt that looks fancy may have a higher perceived value than a beautifully made simple shirt. Most customers have no idea how much time, money, or effort it takes to make a particular garment.

Your branding can influence how your product is perceived, as well.

A classy logo and high-end brand positioning will have a higher perceived value than discount brand positioning.

So, consider your fashion brand and your competitor’s pricing when creating your pricing strategy for a clothing line.

For more information about pricing and clothing line financial planning, check out this online mini-course by Indie Source.

As we explained previously:

Today, it’s impossible to reach most customers without a website. This is especially true for new small businesses and startups trying to compete in an increasingly noisy world. but it’s also true for even established companies.

Don’t believe me? A recent study shows that 97% of consumers research their purchases online before they buy something.

Your website is a crucial component of your marketing and branding strategy.

So, put this vital business tool to work for your clothing line.

Start by ensuring that your website design truly embodies your brand. Visitors should understand who you are and what your fashion brand is about as soon as they arrive.

Your website’s visual design and marketing copy should project your brand’s voice and identity. Here are some suggestions:

• Use your brand’s colors.
• Prominently feature your logo.
• Write marketing copy with your target audience in mind.
• And showcase your fashion design aesthetic.

Besides serving as a brand ambassador, your business website is also an excellent venue for showing off your clothing designs to a broad audience.

Consider sharing an online lookbook featuring your fashions, as well as traditional product shots. This will allow your audience to see the styles in action, provide inspiration, and give customers a chance to relate to your designs.

If your lookbook resonates with a visitor, the chances are good that they’ll purchase your items – or, at least, they’ll wish they could. The best way to get a unique website is with a fully custom design. But if your budget is limited, you can also work with WordPress themes and modify those to suit your unique brand.

You may also want to incorporate an online store into your website. Check out Section 7 – Create a Sales Plan (below) for more information about selling online using an eCommerce platform.

Finally, a robust website design will lend credibility and legitimacy to your business. To learn more about excellent website design, check out Grow Your Small Business With These 7 Website Design Best Practices and 11 Biggest Web Design Trends of 2022.

Before you can even consider the details of your first season’s designs, you have to decide what kind of clothing line you’re going to offer in the first place.

There are many different models for fashion businesses. Here are a few of the most popular:

Print-on-Demand

This business model enlists the aid of a third party to print and ship pre-existing wholesale garments (like t-shirts, hoodies, or leggings) to your customers.

Your custom patterns or prints are applied to the appropriate garment and then shipped out to your customers as the orders come in. So, there’s no need for you to store inventory or manage fulfillment.

It’s one of the most effortless fashion business models to set up, but it also yields some of the lowest revenue since much of your profit goes to the third party fulfilling your orders.

This model works well for t-shirt lines, especially if you are not willing to produce large batches of pre-printed t-shirts for your first line. For an in-depth look, read our definitive guide on how to start a t-shirt business.

Pros for the print-on-demand business model

• Typically, no set-up costs or low set-up costs
• High-quality prints (if you pick one of the top vendors)
• Unlimited color options (but remember that price increases with the number of colors)
• Ideal for small order quantities or one-off prints
• Many different clothing options (shirts, t-shirts, hats, jackets, leggings, socks, dresses, etc.)

Cons for the print-on-demand business model

• Not cost-effective for large quantities
• Few vendors offer volume discounts
• Minimal print product selection (you’re limited to what the vendor offers)
• Sparse finishing options (tags, labels, packaging, etc.)

WHICH LOGO IS BEST?

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Can you spot the best logos? Take this free quiz to find out.

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Custom Wholesale

Custom wholesale businesses purchase pre-made wholesale garments and then customize the clothing by hand.

You can print, applique, embroider, or otherwise embellish the existing garments to fit your vision.

This model requires some time and financial investment. You’ll need to purchase the garments upfront and pay for the materials and labor to customize them.

You’ll also need to store inventory and fulfill your orders.

However, you’ll take home more of your profits than the print-on-demand model since there’s no third party to pay.

Pros for the custom wholesale business model

• Very cost-effective in large production runs
• Most vendors offer substantial volume discounts
• Lower costs mean more significant margins for you

Cons for the custom wholesale business model

• Not cost-effective for big clothing lines with different items, colors, and sizes
• Limited to simple images and designs (for example, you can’t print photographs)
• Minimum orders typically require 10 to 25 units per color/size
• You’ll need to figure out how to manage inventory and shipping – the vendor will not do this for you.

Cust-and-Sew and Private Label

This is the business model most people think of when they plan to start their clothing line.

You will design your clothing and then have it manufactured to your specifications by a manufacturing partner so that you can sell it under your private label. (You can learn more about finding a manufacturer in the next section.)

A private label model will require you to shop and purchase the fabrics, decor, and notions needed to build your garments.

You will also need to store your inventory and fulfill your orders.

Pros for the cut-and-sew and private label business models

• 100% custom clothing – you design it yourself
• Increased perceived value from customers for unique clothing
• Bigger margins since you’ll have less competition when you sell unique clothing items.

Cons for the cut-and-sew and private label business models

• High startup costs
• Many moving parts, and you’ll have to take care of everything by yourself or using your team.
• It takes many months to prepare and launch

Custom Couture

Custom couture may be the riskiest fashion business model.

Couture garments are hand-made to fit each client. This level of detail is time/labor-intensive and expensive to execute.

This means that each piece will come with a very high price tag – the kind of price tag that is only really accessible to the wealthy. This limits your potential customer pool.

However, if your designs catch the eye of wealthy clientele, your business could sky-rocket.

Pros for the custom couture business model

• 100% custom product
• Tremendous perceived value from affluent customers
• Biggest margins

Cons for the custom couture business model

• Much smaller target market
• Requires you to have a strong brand
• It can take years to gain credibility as a couture brand

Choose Your Niche

Once you know whether you’ll be creating a cut-and-sew collection from scratch or starting a print-on-demand business, you can get more specific.

What kind of clothes will you make?

Is your clothing line a sportswear brand? Or will you be offering retro-inspired lingerie? Will you design for men? Women? Both?

Before designing your first collection, you must develop and refine your business idea by identifying your clothing line’s niche.

It’s impossible – and expensive – to try to please everyone and do everything. You’re more likely to succeed if you design specific products for specific people. So, decide early on who your core audience is and what products will be the heart of your clothing line.

Here are some niches to consider when starting a clothing line:

• Sportswear
• Women’s Dress Clothes
• Men’s Dress Clothes
• Women’s Casualwear
• Men’s Casualwear
• Swimwear
• Sleepwear
• Lingerie

And even within those niches, you’ll pick a variety of clothing and apparel products, including:

• Short sleeve shirts
• Long sleeve shirts
• pants
• leggings
• hoodies
• dresses
• lingerie
• underwear
• socks
• ties
• belts

Whatever niche you choose, make sure you’re passionate about it. That passion will come through in your designs, and your audience will appreciate and embrace the authenticity of your clothing brand.

Design Your First Collection

Once you’ve decided on the suitable business model and niche for your clothing line, it’s time to start thinking about the garments themselves.

Your first collection should reflect your clothing line’s essence and adequately introduce your unique design aesthetic. So, refer back to your fashion brand concept for inspiration.

You can branch out and explore new directions later, but your very first collection needs to preview what your audience can expect to see from you consistently as a designer.

We can’t tell you what your designs should be – that’s the magic that you’ll need to supply on your own. But, we can ask you to be true to yourself as a designer. And, don’t be afraid to be unique.

Uniqueness and authenticity are the elements that will help to set your clothing line apart in the crowded fashion marketplace.

And if you have little or no experience as a clothing designer, check local community colleges for practical classes or learn through MasterClass (Marc Jacobs, the CFDA Womenswear Designer of the Year winner, has a terrific fashion design course there), Maker’s Row Academy, or Udemy.

A clothing manufacturer is not just the means to an end – it’s the business vendor that will help you make your ideas a physical reality. So, making the right choice of clothing manufacturer is critical.

This is true whether you’re starting a new clothing business from scratch or if you’re already running a clothing brand and want to start a new clothing line.

Your existing clothing manufacturer might not be a good fit for the new line. For example, this often happens if you started with t-shirts and are now looking to produce a more tailored cut-and-sew line.

You should plan to interview several different clothing manufacturers to find the one that is the right fit for your business. Remember that you must ensure that you maintain healthy profit margins for your business, and manufacturing production costs will be a large percentage of your budget.

Put another way: hitting your target price point for your clothing line is closely tied to finding the right partner or vendors to help you create and manufacture that line. Your product costs will be critical factors in your clothing business’s future success or failure.

Also, keep in mind that not every manufacturer will produce every clothing item in your clothing line. You may need to find different manufacturers to cover every clothing item in your new line.

There’s a terrific book about this from the founder of Nike, Phil Knight – Shoe Dog. In the book, Knight writes about how he found the perfect partners for manufacturing Nike shoes and the struggles with less than ideal partners.

Before you reach out to potential manufacturing partners, you’ll need to get your own business in order. Anna Livermore, founder of fashion business consulting company V. Mora, recommends completing the following “To-Do” list before reaching out to manufacturers.

• Determine a realistic, honest budget. Don’t overcommit funds you don’t have. 
• Learn about the manufacturing timeline so you can plan accordingly.
• Prepare your design resources (fabric swatches, sewn samples, and tech pack or renderings).

After you complete that to-do list, the next step is to find manufacturers.

When you reach out to a manufacturer for the first time, they will have questions for you – questions that you should be equipped to answer. If you take the time to establish your budget, understand the production timeline, understand the manufacturing process, and know your designs inside and out, then you’ll be ready for them.

When you finally start meeting with potential manufacturers, put your most professional foot forward. Jennifer Philbrook, the co-founder at Stitch Method, suggests:

Look at this meeting as a partner meeting and walk in with a smile! Not only are you looking to see if this factory is a good fit for your brand, but they are looking to see if your brand is a good fit for them! You don’t want to assume they automatically want to work on your project.

Of course, walking into that meeting prepared will go a long way toward convincing a manufacturer that you are a worthwhile prospect. Having worked on both the design and production side of the clothing industry, I can tell you that manufacturers love a designer who knows their business.

On the same token, nothing is more annoying to a supplier or manufacturer than a designer with lots of ideas and no understanding of the manufacturing process by which those ideas are made real.

Look for a clothing manufacturer that has a fashion designer on staff. That could give you a competitive advantage because an experienced fashion designer can anticipate problems you might not notice when you share your tech pack (a blueprint for your designs), especially if you’re new to the clothing industry and just starting your clothing brand.

Visit the manufacturing facility to observe the scale, employees, and manufacturing process if you have a chance. If you can’t visit a facility in person, ask for a short video that can help you to understand your potential manufacturing partner better.

Before committing to a full-scale run, order a few samples from several manufacturers to evaluate the quality, adherence to the manufacturing process they claim to have, and their work speed. For example, if you’re screen printing on your clothing, examine the quality of the print. Examine the labels to make sure they contain the information you require.

Once you’ve evaluated all of your options and reviewed samples, choose the manufacturer that will serve your business best.

Where do you plan to sell your clothing line? In an online shop or an online store? In a brick-and-mortar clothing store of your own? Or maybe you want to sell in local boutiques that feature many different clothing items?

Your sales channels will impact many future decisions, so pick wisely.

There is no one correct answer. And, it’s a good idea to consider the pros and cons of each option before making a decision that feels right for you.

This is where market research can help you. Not every selling option will be cost-effective or practical, and not every opportunity works for all fashion brands.

Your sales plan should be comprehensive. You’ll want to develop both an overall marketing/sales strategy and a list of day-to-day tactics that will help you sell your clothing line.

Selling a clothing line in an online store is cheaper and less labor-intensive than setting up your physical store. There is no monthly rent, mortgage, or property taxes to pay when you operate an online store and no fixtures to buy. It’s also relatively easy to create an e-commerce presence without a lot of technical knowledge.

Most template-based web design services offer some form of e-commerce platform functionality that lets you quickly launch an online store. And some, like the Shopify eCommerce platform, are built specifically for e-commerce. These platforms will, among other features, let customers pay by credit card (you won’t need to get a particular merchant account because the platform will already provide this functionality). But, think carefully before you decide to use a template-based service like Shopify.

Remember how important your unique branding is? The templates on those e-commerce sites are also available for all fashion brands to use. As I mentioned in a previous article,

It’s not enough to have a website… You also want to be sure that your site’s design is unique and that it showcases your products and you.

Just like your logo, your web design should start with your personal brand. A well-designed website will expand upon and support the values and personality traits that you’ve identified as being core to your business. If web design is not among your many DIY skills, know that there’s help available.

Self-hosted open-source e-commerce services allow you to use your own uniquely branded website with its e-commerce functionality.

Check out services like WooCommerce, Magento, and Open Cart. Not only can you use your original web design, but they also scale quickly alongside your business as it grows.

Alternately, if you dream of selling in a physical store, it’s a safer financial bet to start by selling in boutiques that already exist before taking the plunge and opening your shop. This lets you, among other advantages, accept credit card payments without having first to establish a merchant account and delays the need for you to find and pay for physical space.

When deciding which boutiques you would like to carry your clothing line, double back to our first point – your well-developed brand.

Choose boutiques that align with your brand identity and your target market. If you design biker leathers for motorcycle enthusiasts, you can probably bypass the boutique down the street specializing in yoga pants and maxi skirts.

However, if you make wise location choices, there’s a good chance your target audience already shops for clothes there.

Once you’ve targeted which boutiques you’d like to partner with, the next step is to start thinking like a retailer. Stitch Method’s Philbrook shared this advice in her article 5 Things I Wish Someone Had Told Me Before I Started My Clothing Line:

If you plan on selling wholesale to boutiques it is important that you have merchandise ready to sell during the correct buying season… You need to figure out when you need to have production ready to ship to stores or customers and then work backwards from there through the development stages (leave enough time!) to make sure that you are working on the correct season.

Luckily, you’re already planning to learn about the manufacturing production timeline (remember tip #3?), so you should be golden.

Pro Tip: Always schedule your meetings with boutiques in advance. The customer always comes first in retail, so cold calls and drop-ins are a terrible idea.

Now it’s time to focus on getting the word out about your great new clothing business, a new line of clothes, and find potential customers!

A great way to get started is to compile a list of local fashion editors and media outlets (radio, television, and online blogs). When you are ready to launch your clothing brand or clothing line, you can notify these resources via press release.

Take it one step further by creating an entire press kit. Check out this article from PR Couture to learn how.

Another important (and easy to overlook!) marketing tool for your clothing line is your garments’ pictures.

If you’re just starting, you might be tempted to take these yourself. But, blurry or poorly lit photos can work against you. So, if you can afford it, hire a professional photographer to ensure excellent results.

If your budget is small, a simple lighting kit and a DSLR camera (or simply a smartphone with a good camera) can help you produce professional-looking photos. Remember to focus on the correct details, including fabric texture, trims, closures, and, when relevant, accessories.

These images will be used on your website, social media marketing, and advertisements. So, keep your brand and target customers in mind and style them accordingly.

But most importantly, make sure your styles are the stars of the photos – simplicity is vital to keep accessories and background elements to a minimum.

As a new, up-and-coming business owner, you’ll also want to take full advantage of the inexpensive and easy exposure that social media marketing offers you.

You need to build an online presence. As we previously explained,

Social media gives you the ability to easily keep customers up-to-date on new products, store policies or sales. It also enables you to build a social rapport with current customers, while building low-pressure relationships with future buyers.

Maintaining (at a minimum) a Twitter and Facebook presence will help you build an audience of devotees. And consider micro-influencers who can help you in the early days.

Make it easy for visitors to see what your clothing brand is all about by featuring those fabulous photos of your line in a Facebook album.

Social media is also the perfect platform to help future customers get to know you as well as your clothes.

One primary reason customers buy from a start-up business instead of a major retailer is that they feel connected to that business’s story. So, use your Facebook and Twitter to share that story – for free!

Finally, consider throwing a launch party to create exposure and excitement for your line. In an article for Inc. Magazine, Francis Arden (Aston Models partner) shares some great advice to ensure that your launch party is the well-attended extravaganza you dream it will be.

Build your list. Remember those local fashion editors and media outlets? They should be on your list. So should local boutique owners, fashion buyers, and anyone relevant in your field.

Don’t compete for guests. Schedule your party on an evening with no other significant events – especially not other significant events in the fashion industry. You don’t want to force your attendees to choose between your launch and another event.

Hold your event at an exciting location. A special, unique venue can make an event feel like… well… an event! But, don’t choose randomly; pick a place that jives with your brand presence. Try to find a venue where your target audience would feel right at home – if ‘home’ was super fun and exciting.

Offer something for free. People love free swag. If you can afford it, offering a thoughtful and relevant gift will significantly impact your guests. A branded t-shirt might be the right gift. Or you can offer a one-off specially designed garment in a raffle. Arden suggests offering an open bar for a limited part of the evening if your budget is tighter. Everyone loves an open bar, and you can schedule the timing to coincide with when you’d like the bulk of your guests to arrive.

For more valuable tips like these, check out the rest of Arden’s advice here.

As with any aspect of your business, start by seriously considering the matter. Here are a few questions to get you started:

• What do I want to gain from this partnership or investor?
• How involved do I want them to be in the decision-making processes?
• Am I looking for a long-term or a short-term relationship?

In any relationship, it’s essential to know what you’re hoping to gain. Partner and investor relationships can come in a multitude of forms. Are you simply looking for someone to invest capital? Or are you looking for leads, someone to split costs with, or exposure and success-by-association with an established brand?

Only you know what is most useful for your business. But, you should know what your goals are before meeting with any potential partner or investor.

Once you’ve determined your relationship goals, it’s time to start thinking about the type of relationship that will best meet those goals. Not so long ago, angel investors and venture capitalists were the standards. But then crowdfunding changed the fundraising landscape.

Here are some options for you to consider…

Crowdfunding

Crowdfunding sites like Kickstarter and Indigogo offer the opportunity to raise money from a crowd of strangers. These fundraising projects are easy to set up and allow you to raise cash without granting any investor or partner any influence over your clothing business. You will, however, need to follow through on any promises made to your backers.

As we pointed out,

Reports have shown a consistent increase in crowdfunded investments since the great recession in 2008. In a recent study on the Crowdfunding Industry, World Bank predicted that the crowdfunding market could increase to between $90 and $96 billion, which is approximately 1.8 times the size of the global venture capital industry today.

If you want a true business partnership, crowdfunding may not be the choice for you. But, it’s an excellent option for raising cash to fund your next collection. If you decide to give crowdfunding a try, check out Design Tips From the World’s Most Successful Crowdfunding Campaigns.

Angel Investors and Venture Capitalists

Angel investors and venture capitalists provide a more traditional route to raise your new fashion business funds. But, you’ll need to work hard to sell these business investors on the financial viability of the fashion industry and your clothing line.

It’s essential to walk into your pitch meeting knowing what you’re looking for and how you will get there. No one wants to invest in someone who doesn’t know their business.

And, be prepared for these investors to expect to play a more significant role in your business. After all, these investors are investing their money in your clothing business in the hopes that they will make a return on that investment. So, they’ll want to be sure that you’re running your business in a way that is likely to ensure that return.

For that reason, you’ll want to make sure that the investors you work with get you and your vision for your business. Autumn Adeigbo, designer and ethical fashion entrepreneur, recently found an investor for her fashion startup. She explains:

To make a [pitch] deck that reflected my brand aesthetic, we created beautiful and colorful imagery as eye candy. The imagery wasn’t appealing to all investors, but our heavily branded deck struck the right chord with investors who got our vision.

Like Adeigbo, you’ll want to prepare a pitch deck to walk investors through your plans and goals for your clothing business. To learn more about the pitch process, read Alejandro Cremade’s article How to Pitch Investors.

Partnership

Business partners can come in many forms. A good business partnership occurs when both partners are equally invested in the business’s success. Both partners devote equal finances, resources, and labor to making the business work.

But, if you don’t already have a deeply committed partner by your side, you can also establish more casual or temporary partnerships with existing brands, boutiques, or retailers.

Look for brands that complement your brand rather than compete for your business. And make sure that you share the same goals for your partnership.

Here are two examples…

Example #1

Who: Partner with a local retailer

What: To host an event supporting a local non-profit

Why: To build exposure over the holidays

Example #2

Who: Partner with  complementary clothing brand

What: To open a pop-up store

Why: To drive sales during a season of slower revenue

There are many other creative ways to partner with an existing brand or retailer. And, as long as you and your partner have the same goals, you’ll be motivated to work together to achieve them.

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