How to Start a Clothing Line

ON THIS PAGE

• How to Start a Clothing Line
• How Big is The Clothing Line industry?
• What are the Key Segments of the Clothing Line Industry?
• What External Factors Affect the Clothing Line Industry?
• What are the Key Customer Segments in the Clothing Line Industry?
• What are the Key Financial Metrics and Costs in the Clothing Line Industry?
• What are the Keys to Launching a New Clothing Line?
• What are the Typical Startup Costs for a New Clothing Line?
• How much do Fashion Designers Make?
• Additional Resources in the Clothing Line Market

 

How to Start a Clothing Line

If you’re looking to start a clothing line, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key clothing line industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a clothing line business, but succeeding in it!

Before we continue, here’s where you can access your clothing line business plan template since having a plan will be key to your success.

Download our Ultimate Clothing Line Business Plan Template here

How Big is the Clothing Line Industry?

According to IbisWorld, there are 13,449 fashion designers in the US, and the fashion designers industry
generated $1.4 billion in revenue in the United States alone last year. This represents an annual growth rate of 3.2% over the past 5 years.

What are the Key Segments of the Clothing Line Industry?

The two main product segments of the fashion industry are clothing and footwear. Jewelry, accessories, textiles and costume design make up the remainder of the industry’s revenue.

 

What External Factors Affect the Clothing Line Industry?

A number of factors affect the performance of the clothing line(fashion designers) industry. These drivers
include:

• Per capita disposable income: Per capita disposable income determines the amount of money that
  consumers have to spend on products designed by this industry.
• Demand from shoe and footwear manufacturing: Footwear manufacturers’ demand for design services
  affects industry revenue as this market accounts for about 10.0% of total industry revenue.
• World price of cotton: The price of cotton ultimately affects the price of the end product. As the price of
  this input rises, so does the price of the clothing or shoes made based on this industry’s designs, which
  can drive down consumer demand.
• Demand from jewelry stores: Demand for trendy and fashionable jewelry determines the need for design
  services within this segment. As consumers increasingly place more value on modern designs over
  classical pieces, demand for design services will grow.

Finish Your Business Plan Today!

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

What are the Key Customer Segments in the Clothing Line Industry?

The clothing industry’s key customer segments are apparel manufacturers, fashion houses, boutiques and department stores.

 

What are the Key Financial Metrics and Costs in the Clothing Line industry?

The key financial metrics in the clothing line market are as follows:

Profit-Profit has increased over the past five years as a result of the recovering economy and a rebound in overall spending on discretionary purchases.

Wages-Wages account for almost half of total industry revenue, spending on labor represent the largest expense for industry operators, emphasizing the highly skilled and labor-intensive nature of the industry.

Purchases-Purchasing costs are the second-largest industry expense, but are significantly less than wages. For the past five years, purchasing costs have inched up as a result of increasing prices from upstream suppliers.

Rent and Utilities-Rent and utilities are low, accounting for just 5.0% of total revenue.

Other costs-Because the industry is highly labor-intensive, depreciation only accounts for about 1.6% of revenue. Other costs include marketing and advertising.

 

What are the Keys to Launching a New Clothing Line?

1. Brand Value Proposition
Understanding what will set your brand and your product/service offering apart from the competition is a crucial step. It is important that you are unique and bring something fresh to the market.

2. Have Capital
To build up your initial inventory, you’ll need the money to produce it. Even if you don’t have outside funding yet, it’s important to get your financials in order- How much money will you need in order to launch your clothing line? Do you have money saved up for this, or will you need a bank loan? What are your costs?

3. Do your Research
Make sure you know your market: Who is your competition? What are their strengths? Weaknesses? Who is your target market? How much do you think you can sell your designs for at the retail and wholesale levels?

4. Create a Brand Identity
Create a unique brand identity that people can identify with. You need to know who you are designing for and focus on one direction with specific goals in mind. Be consistent in order to help your brand make an impact. For example, Vera Wang is known for designing fabulous wedding dresses and Christian Louboutin for shoes.

5. Choose your Business Model
Pick a business model for your clothing line. You can either sell it yourself, sell it wholesale-only to retailers, or be a retailer and wholesaler of your clothing line. If you plan to sell your own line, you have the option of opening a brick-and-mortar store or an online storefront.

6. Source your Manufacturer
If you are creating all of your own clothes to start, you will need to find fabrics and materials that meet your budget and creative needs. If you decide to use a manufacturer, you will need to find one. Do some research to locate the best quality and price for your line. Keep in mind that while many overseas manufacturers are exponentially cheaper, they usually only work in large quantities, so ask about minimums before proceeding.

7. Execute a Strategic Marketing Plan
The goal of a clothing line’s marketing plan is to ensure long-term success. Employ an integrated strategy that will reach your target market segments. Utilize marketing, public relations, advertising and sales efforts to gain brand recognition and ultimately drive revenue.

8. Develop prototypes and a look-book
Make prototypes of each piece from your first collection and then take photos. Develop a look-book (a portfolio of each piece from your current collection) and line sheets (a line sheet should contain photos of each piece from your collection, as well as wholesale pricing, fabric content and sizing information).

9. Profits & Expansion
Make sure that you have healthy profit margins. Then utilize profits wisely, in order to expand-invest back in the business, improve processes, hire more skilled people and increase marketing efforts.

Finish Your Business Plan Today!

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

What are the typical startup costs for a new clothing line?

The cost of starting a clothing line is dependent upon size and a host of other factors. However, for a small home-based clothing line, you would need about $500, for a medium sized clothing line, anything from $1,000– $5,000 would be sufficient to start with while for a large sized clothing line, you would need between $25,000– $50,000.

 

How much do fashion designers make?

Clothing line operators and fashion designers receive varied pay amounts based on the success of their product. According to Glassdoor, the national average salary for a Fashion Designer is $60,000.

 

Additional resources in the clothing line market

For additional information on the clothing line market, consider these industry resources:

• Council of Fashion Designers of America – www.cfda.com
• Dexigner News – www.dexigner.com
• Fibre2Fashion News – www.fibre2fashion.com