How much does it cost to start a clothing line is one of the most common questions asked by people who dream of running their own clothing line. Unfortunately there is no simple and easy answer and the truth is it could cost you absolutely nothing through to thousands or even millions of dollars. Everyone's idea of what they want to do is different and the scale of everyone's idea can also be very different. The costs involved can depend on quite a number of factors, Notably, overhead costs, distribution channel, production routes, type of clothing and promotional methods.
This is one great reason why planning is the most important thing you can do before jumping two feet first into your venture. For most clothing labels that fail, it is usually due to not fully understanding what they are doing and can under or over estimate, getting themselves into major trouble along the way. The most important thing is to create a balance and to start your clothing line at the level you can afford, building it up over each season.
Overhead costs are your fixed costs. If you are planning on working on your clothing label full time, then this could be living expenses. If you plan on running your label from a studio then this could be rent and electricity. Overhead cost will need to be divided by the time taken, which would usually be over a season, with the amount of clothing produced, or what is anticipated, which will be added to your production cost per unit.
The distribution channel is how your going to sell your clothing. The two main ways are by retailing yourself, meaning, selling them individually to the customer, or as a wholesaler selling in bulk to stores. If you are selling to stores, you will get the orders first, then have your clothing mass produced, then deliver, and then you will receive full payment.
This is actually where a lot of clothing lines fall into problems because you will need to be able to fund the orders you get to pay for the manufacturing before you receive the payment for them. So with this in mind, a large amount of orders is a bad thing if you do not have enough money to invest. Not enough orders is also bad if you you do not get a return on what you have already invested. The key is to create a balance between your budget and the orders that you take, building up the amount of orders each season as you create a larger budget at the end of each season for the next one.
Production routes are how you will get your clothing manufactured. This obviously depends on the style of clothing you are creating also including where and how you will manufacture. Generally, producing locally will cost more, but you can order less at a time. Producing abroad will be much cheaper per unit but with a much higher minimum order, which means you will need to sell more and invest more initially but get a greater return and wider profit margin.
The type of clothing will effect costs because of materials used and the sourcing of those materials. The more common the style the cheaper and easier it will be. T-shirts for example are very economical and you can start a t-shirt company extremely cheaply. If you are designing your own cut and sew clothing, the types of fabrics will effect costs for manufacture, sampling and also the minimum order value.
You will need to promote your brand either by advertising, direct marketing or other methods. The costs involved will all depend on what the best methods for you are. Your marketing budget will also need to be put into your costs and will grow as your clothing label does. You may also need to pay for a graphic designer, P. R agency, photographer, models, and many other expertise that you may not be able to do yourself.
The best practice therefore would be to create a budget of what you can spend, either by investing your own money or finding funding for your project from outside sources and then working your strategy around your budget. Try working backwards in your planning with your budget in mind to find out the best approach to start your label. There are some very famous and prestigious clothing labels that initially started their clothing line with only one design so you may also benefit from starting out very simply as it is important not to take on more than you can handle.