So, you've decided to dip your toes into the business side of fashion. Your mind is probably ping-ponging between “I can do it! I just have to believe in myself” and “It's going to be too hard.” We can relate.
Before we started Melengo, we were plagued by similar thoughts. Despite that, we put in the work, and hey, here we are! So, take it from us: while it won't be easy, it's definitely doable.
Borrow some of our motivation along with the tips from this comprehensive guide we put together, and get started with your very own clothing business!
How Much Does it Cost To Start a Clothing Brand?
First things first. How much capital are you going to need to create and launch your very own clothing line from scratch?
The exact cost will vary depending on your business size and model, but you’ll need a minimum of $500 to $1000 to start a small-sized clothing business. If you’re looking to start a medium-sized clothing line, your initial costs may fall anywhere between $1000 to $5000. (We’ll explore funding options below.)
Start a Clothing Line in 15 Steps
Before we start, here’s a nugget of wisdom from people who have been in your shoes: you’ll need equal amounts of creativity and business-savvy mixed with perseverance to make your mark in the fashion world.
Now, let’s dive into a step-by-step guide which will make the entire process of starting a clothing brand less complicated for you.
1. Identify a gap in the market
And fill it. In other words: find your niche, because this is how your brand will gain an edge in a highly competitive market dominated by major clothing brands.
But why is a niche so important? Because your passion alone won't translate into sales; there needs to be a demand for the kind of clothes you sell. But, at the same time, trying to sell everything for everyone also won't get you any results. Having a niche helps you target a certain group of people who need your product, giving you a much higher chance of hitting your sales goals.
Think of it as attending a random event and trying to market multiple products to the general populace (who may or may not be interested in fashion) vs. attending a gathering of t-shirt lovers and talking up your quirky t-shirts brand. Which one is guaranteed to give you sales? The second one, because it's a highly targeted marketing approach towards a group that loves and wants your products!
To sum it up, having a niche lets you:
- Stand out in a saturated market by offering something specially designed for your target audience
- Have less competition
- Build a personal brand and be known for the product you sell
- Understand your customers’ pain points better, leading to better customer loyalty
- Streamline your marketing efforts, giving a better ROI
Here’s the thing, though: your niche doesn’t have to be a product type. It can also be:
- A certain type of customer (kids under 10 years old or office-going adults)
- A value (sustainable or gender-neutral fashion)
- An activity type (clothes for lounging around in, adventure-wear, or activewear)
- A style (casual vs. formalwear)
- A type of season (winter wear vs. fall wear)
- A price point (luxury vs. budget-friendly fashion)
- A geographical location
The only thing that your niche absolutely has to do is fill a gap in the fashion market. Ask yourself this: what product do people need that isn’t being sold in the market currently? A good rule of thumb is to find a middle ground between a niche you’re passionate about and something that has market demand.
2. Get to know your ideal customers
All thriving businesses have one thing in common: they serve their customers well by fulfilling all their unmet demands. And the first step to doing this (after deciding on what to sell and who to sell it to) is learning everything about your target customers.
We’re talking pain points, spending habits, price ranges, values, behaviors, and preferences. In other words, you need to get inside the minds of your customers. This will help you build a product that your target audience loves, identifies with, and benefits from.
Here are some questions about your target customers that you must be able to answer:
- What influences their purchase decisions?
- What problems of theirs will my product solve? (For example, if you’re planning to start a clothing line for active people, your product could solve one of their main problems–feeling too hot working out with clothes on.)
- Which price points are they comfortable with?
- Are certain brand values important to them?
- Does my product align with their identity? (People use their clothes to tell the world who they are. So, the more your clothes speak about their identity, the more likely they are to buy them.)
But how do you get this information? Through a combination of market research + asking your target consumers directly. Here are a few different ways in which you can achieve this:
- Analyze market trends. Use Google Trends to identify trends, challenges, and recent developments about the type of product you’re planning to sell. This is also a great tool to see what customers are searching for.
- Survey and/ or interview your target customers. The best way to understand what your customers want is by asking them directly. Prepare a survey and distribute it in online channels where your potential customers are most likely to hang out, such as Facebook groups. In return for their time and insights, you can offer them some incentives like an exclusive coupon code.
- Monitor your competitors. Take a look at how they’re pricing and marketing their products. Go one step beyond and see what their customers think about them. You can use testimonials on their websites and reviews posted on third-party apps like Amazon and TrustPilot. What are they doing right with their products? What could they be doing better? Making a note of these will help you prevent common mistakes and come up with a better product.
- Use social media. Conversations on social media can tell you a lot about what customers expect from brands. Use keywords and hashtags to listen in on online conversations.
tl;dr: Knowing what your customers want helps you design the perfect product for them, increasing brand loyalty.
3. Settle on a business model
A business model acts as a road map for your entire business, outlining everything from how you will source and manufacture your garments to how you will sell them. Depending on your niche and target consumers, there are various types of business models available for fashion brands.
Dropshipping: This is the most low-risk business model with low upfront costs. All you need to do is collaborate with a manufacturer and sell their garments on your website. When someone places an order, the manufacturer will ship it to them directly. You don’t have to stock up on inventory. Essentially, you act as a middleman between the customer and the garment manufacturer. However, the profit margins are low with dropshipping. It’s also difficult to stand out in the fashion market with this business model.
Print-on-demand (POD): If you want a low-risk, low-cost business model like dropshipping, but with the added benefit of customizing the garments with your designs, POD might be the best option for you. With this business model, clothes are produced only when an order is placed, after which your designs will be printed on to it digitally. Like dropshipping, everything is handled by the manufacturer; you just need to supply the designs. No inventory management. No upfront costs. But the profit margins for POD are low and you won’t have a say in the quality of the clothes.
Wholesale: This model is based on the bulk manufacturing and selling of garments to other retailers for a lower price per unit. The benefits of a wholesale business model are that you get to save money on marketing, can get a good cash flow going due to large orders, and get exposure through the retailers. But, the challenges are that you need to have enough production capacity to manufacture bulk orders with low profit margins. Furthermore, you don’t control the experience of the end customer.
Note: Another thing to keep in mind is that to set up a wholesale business, you need to create your own products. But, don’t worry! You can use Melengo to take care of all your manufacturing needs.
Bespoke (or) made-to-order: Under this model, each garment is uniquely tailored according to an individual customer's tastes and styles. This is a great business model for those who want to target a wealthy clientele. The upsides of running a bespoke fashion business are high profit margins due to premium pricing, minimal waste, and enhanced customer satisfaction. However, the downsides are that making bespoke clothing is time- and labor-intensive with customer acquisition being difficult in the beginning.
Direct-to-consumer (D2C): This is the most common business model where you're responsible for every single aspect of your clothing business–right from designing and producing to selling them directly to customers (either through your own website or a brick-and-mortar store). The best part is that you get to shape your brand identity and carve a space out for yourself in the market. And no third-party involvement means higher profits. But, at the same time, wearing multiple hats can be difficult. You'd also need to invest significantly in marketing your brand.
Did you know that Melengo takes care of the manufacturing, making it easier for you to get your clothing business off the ground? [Sign up now]
4. Choose a business structure
Your business structure determines how you represent yourself legally, who can make decisions, and how you’ll pay your taxes. Let’s take a look at the 4 most common types of business structures:
- Sole proprietorship: If you’re an individual who takes care of the entire business operations, then you’re a sole proprietor/ sole trader. You and your business aren’t treated as separate entities. When you file your personal taxes, you need to include your business expenses and revenue. It means you’re self-employed. The downside is that you’re responsible for the debts and liabilities of your business.
- Partnership: It’s similar to a sole proprietorship, except it involves 2 or more business owners. The business isn’t separate from the partners, and they’re personally responsible for any liabilities. This type of business structure can also lead to clashes in decision-making.
- Limited liability company (LLC): Under an LLC, the business owners have limited liability, meaning that their personal assets are protected in the case of debts or liabilities.
- Corporation: A corporation (be it an S-Corp or a C-Corp) exists as a separate legal entity from the business owner(s) and holds many of the same legal rights as individuals. i.e. it can maintain assets, sue people, hire employees, etc. It can raise funds by selling its shares to the public, with none of the shareholders being responsible for its debts and liabilities. However, a corporation is expensive to set up and has many requirements, so it’s best suited for large businesses.
We recommend hiring an attorney to help you breeze through this step and ensure that everything is set up correctly to avoid any problems in the future.
5. Write up a business plan
This goes hand-in-hand with choosing a business model. But, hey, separating the two makes it feel less overwhelming. 😉 A business plan is an important document that outlines your vision, goals, unique selling points, growth strategy, and financial projections.
In other words, it’s a blueprint for how you will operate and scale your business, and is essential to get funding.
Here’s what a comprehensive business plan should include:
- Executive summary: Despite this being the first page on your business plan, we recommend that you write this at the end. It’s basically a high-level overview of your entire business plan. It details all the key points about your business, and shouldn’t be more than one page long.
- An ‘about’ page: A brief page that talks about who you are, what your business is about, why you started it, what you plan to do, your unique selling propositions, what customer problems you plan to solve, and what values your business identifies with. If you’re looking to raise funds, this might be a good place to add a little something about why you’d be a good investment.
- Market analysis: Information about your target consumers (such as their pain points, buying preferences, and demographics), your competitors, market trends, and growth rates.
- Products: What products are you planning to sell? What are their unique selling points?
- Business operations: This section outlines how you’ll run the day-to-day operations of your business, who will make decisions, your team structure, and risk management strategies.
- Logistics: Detail out your entire production and supplies plan. It should include information about manufacturers, suppliers, warehouse management, equipment and tools you need, and shipping and distribution channels.
- Marketing strategy: How do you plan on getting the word out there about your brand? Which social media/ traditional channels are you going to advertise with? Will you collaborate with influencers? What’s the projected duration of your marketing campaigns?
- Financial plan: This will include estimated start-up costs, expected revenue, projected profits, and funding requests (if any).
A well-written business plan shows investors that you have a solid plan in place, making you seem more trustworthy. And if you’re self-funding your business–well, the business plan works as a blueprint on how to run your business even years later.
6. Secure funding
If you’re planning on starting a one-person small clothing business with low start-up costs, feel free to skip this section and go on ahead! For those of you who need at least a few thousand dollars to get things running, here are some funding options:
- Crowdfunding: As the name suggests, crowdfunding is a way of gathering funds from a crowd–typically, people who want you to get your business off the ground because they’ll benefit from your products. It’s a no-strings attached way to fund your clothing line, and is also a good way to gauge interest in your products. Some of the most popular crowdfunding platforms are Kickstarter and Indiegogo.
- Angel investors (or) venture capitalists: Angel investors are people who have a lot of dough and finance start-ups in exchange for a stake in the business. This is a great option for mid- or large-sized businesses. To get investors, you’ll need a solid business plan in place.
A business loan is another option, but banks typically have strict eligibility criteria (because they want businesses that will grow fast and repay the loan on time), so it can be difficult to get one. We also don’t recommend this route unless you’re looking to start a large-sized business and want to retain 100% ownership.
7. Build your personal brand
Also known as your brand identity. This includes coming up with a business name, a logo, brand values, tagline, mission statement, fonts , and color palettes you want your customers to identify your business with.
Your personal brand distinguishes you from others, and is how your customers will recognize you. Here’s an example. What do you think of when you see the color red? Probably KFC. What about when you see a white check mark? Your mind might go straight to Nike. These are great examples of personal brands.
Here are some tips for shaping your brand identity:
- Keep it simple, but make it unique
- Make sure it speaks to your customers
- Make it memorable enough to remember (like Nike’s “Just Do It”)
- Ensure that the domain and social media handles for your brand name are available (your website should be something like yourbrandname.com and your social media handles should be @yourbrandname to make it easy for customers to find you.)
Aaaaand you’re all set with your personal brand!
8. Register your business
To run a business, you’ll have to officially get it registered with your state. The first step to doing this is choosing your business entity type (which you’ve already done on step 4, so kudos!)
The requirements for registering a business in the U.S. vary by state, so it’s best to check that with your local governing agency. You’ll also have to get business licenses and permits, and an Employer Identification Number (EIN) with the IRS in order to register for and pay business taxes. An EIN is also needed to open a business bank account to manage your brand’s finances.
Finally, you also need to ensure that your business complies with laws and regulations, such as those related to taxes, health and safety, and labor. So, it’s best to consult an attorney and get their professional help with the entire process to avoid running into any legal issues down the line.
9. Design your clothing line
Now, we come to a crucial step in launching your own clothing business: actually designing the clothes that will grace your customers’ wardrobes.
By now, you most likely have an idea of how you want your clothes to be designed. So, it's time to start sketching! On paper.
Be as detailed as possible and include details such as zippers, buttons, trims, and other embellishments. Color in the sketches and fill them in with patterns (if your clothes have any). If you're waiting for inspiration to strike you, here's a tip: carry a small sketchbook with you wherever you go. You might get inspired when traveling on the subway, or watching the ducks at a park. 😉
But it's unrealistic to expect everyone to possess design skills. It's totally okay to hire a fashion designer in that case to put your masterpieces to paper.
You can also use Melengo’s AI designer to design your clothing line! Upload an inspirational photo or a rough sketch, or pick a base design from our showroom. Describe your product for the designer and customize every single aspect of it–right from the fabric and texture to weight, color, and appearance.
10. Put together a clothing tech pack
Once your designs are complete, the obvious next step is to find a manufacturer. But, think about this: how will your manufacturer understand your garment needs accurately?
This is where a clothing tech pack comes in. It’s a garment spec sheet that communicates all your garment needs to the manufacturer in the common language of numbers. Not only does it help you reduce costly mistakes, it also acts as a reference for quality assurance checks and helps the manufacturer give you an accurate price quote.
Here are all the things that go inside a tech pack:
- Product summary: A high level overview of your garment, which includes details such as brand and product name, gender, season, colors, MOQ (minimum order quantity), and front and back sketches of the garment.
- Fashion flats: Flat sketches of your garment from all sides (front, back, side, inside-out), including all the details such as zippers, pockets, and buttons.
- Bill of materials (BOM): A list of all the raw materials needed to produce your garment.
- Measurement details: Comprehensive garment measurement details, fit specifications, and grading information.
- Construction notes: Stitching instructions, seam type and length, and instructions on how you want the edges, hems, and surface embellishments to be done.
- Color palette and artwork specs: What color variations and patterns do you want on your garments? Include Pantone color codes and pictures/ sketches of the patterns.
- End page: To track any changes that might be needed.
Check out our article on creating a clothing tech pack, where we go into much more detail (and provide examples). When you partner with us at Melengo, we also create a high-quality tech pack for you so that you’ll never go wrong with measurements and specs.
11. Find a clothing manufacturer
If you’re a great seamster, depending on the size of the business you plan to start, you can source the raw materials and produce the clothes on your own. But, unless you’re looking to create bespoke clothing, this can be labor-and time-intensive. Here’s where partnering with a manufacturer might benefit you.
Some manufacturers only cut, sew, and trim the garments. They don’t source the fabrics. The best option for fashion newbies who don’t know where to find high-quality raw materials is finding a full package production (FPP) manufacturer (like Melengo). You get the entire process from conception and sourcing to finishing handled by them!
Here’s what to look for in a manufacturer:
- Are they experts in their field with testimonials to back it up?
- Do they produce high-quality garments that are durable?
- What certifications do they have?
- Are their factories compliant with labor, wage, and environment laws?
- What’s their flexibility in terms of customizing the clothes?
- What’s their MOQ?
- Do they have the production capacity (including technology, equipment, and labor force) to match your needs?
- What are their delivery timelines? (both for the initial sample piece as well as the finished pieces)
- Do they have a quality assurance process in place?
- What are their prices?
If you want to make frequent visits to the factory, have small production needs, and want the assurance of a “made in USA” label, then you can take your pick from local manufacturers. However, if your garments require materials that aren’t typically found in the U.S., or if you need large quantities, specific production skills, and cost-effectiveness, go for an overseas manufacturer.
Melengo, an end-to-end clothing manufacturing brand, lets you go from idea to perfect sample. Start streamlining your manufacturing process with Melengo. [Sign up now]
12. Set your prices
Your business is registered, your designs are done, and your products are being manufactured. You’re one step away from launching your clothing line! All you need to do is set the prices for your products.
As a first step, determine the cost of production for your garments. This includes designing, sourcing, labor, and production costs. You’ll also need to factor in the costs for packing and shipping your products. And then there’s the cost associated with running your business. Example: rent, employee salaries, electricity, and utilities. All of this together makes up the minimum you should be charging to make a profit.
Next up is using the market research you conducted to see what the going rate is for similar garments. How much are your competitors charging? What price point are your target customers comfortable with? Are you offering something that’s missing from your competitors’ products? If so, you can charge more than them. But, if you want to stay competitive, try picking a price point that’s close to the market average.
Additionally, if you’re starting a bespoke or luxury clothing brand, you can charge premium prices for the high-quality and customization you’ll provide.
You can also test out different prices after you launch and see how customers react. Monitor your performance and change your prices periodically as well.
Expert tip: Add the shipping fee to the selling price of the product and offer free shipping to your customers. You’ll find that people hate paying for shipping, but would gladly accept a slightly higher selling price for that shiny new free shipping badge!
13. Come up with a sales distribution strategy
This step is all about deciding how you'll sell your products. Here are a few options for you to consider:
- Through your own website
- Through e-commerce platforms such as eBay, Amazon, or Etsy
- Through social media platforms
- By partnering with brick-and-mortar stores
- Pop-up stores or fairs
A multi-channel sales strategy (for example: your website + social media) will maximize discoverability.
Pro tip: Where do your customers shop the most? That's where your presence should be!
One thing we recommend is setting up your own online storefront–either by creating your own e-commerce website or setting one up with Shopify or WooCommerce. The benefits are that you have a direct store with which to reach your customers, can customize your store according to your brand’s color palettes, and don’t have to pay commission fees to other platforms.
However, maintaining your own storefront comes with its own set of challenges as well: you need to spend a significant amount of time and money hosting and maintaining it. You’ll also need to look into adding payment options yourself and market your store well to drive traffic to it. But it’s an investment that will be worth it in the long run!
If you don’t have the budget to set up an online storefront right away, start on third-party platforms like Amazon or Etsy. Once you start turning over a profit, create an online storefront.
14. Market your clothing brand
Marketing is an ongoing, never-ending process. But you need to start doing it before you launch your brand to get the word out about your products and pique people's interests.
Follow these marketing tips both before and after your launch:
- Start small by posting on your brand's social media accounts about your upcoming products
- Build an email list and send out updates about how your launch plan is coming along
- Offer exclusive incentives to early customers (such as discount prices for the first few days, or a free gift to the first few customers)
- Optimize your website for SEO to enhance discoverability
- Collaborate with fashion influencers close to the launch date
- Run paid ads on Google and social media
- Use content (such as blogs) tailored to your audiences’ interests to drive traffic to your website (like we are doing!) These could be styling tips, hot fashion trends, and so on.
- Introduce a loyalty rewards program once you launch
- Partner with fashion-adjacent businesses (such as footwear, beauty) for photoshoots in exchange for a shout-out
- Get together with other brands and launch a co-collection
- Network at fashion events
- Contact local newspapers and fashion blogs to advertise your launch
Once you have your foot solidly inside the world of fashion and start making steady sales, you can hire a marketing manager to handle all things marketing for you.
15. Launch your product
The final step is finally launching your clothing line and celebrating with a piece of cake! Congrats on making it this far. Feel free to do some promotional work and stay glued to your website to count the sales, but take it easy and wait until the next day to start packing and shipping your orders.
At Melengo, we are experts at developing and creating world-class fashion products. If you dream it, we can do it. [Partner with us]
