Starting a clothing brand in 2021 is not for the faint of heart.
Don't be fooled by the glitz and glamour of the fashion industry...
It takes hard work to succeed, so be prepared to put in a lot of sweat equity before you see an ROI on your new fashion brand.
But if you are passionate, hard working, and have a vision for starting a clothing company...
You might just be a good fit for this challenging industry, despite the odds.
If you're serious about launching your clothing brand in 2021, but you have some questions...
You're in the right place.
I'm Ippei, a master of all things online business, passive income, and local lead generation.
And Whether you want to know the steps to start a clothing brand from scratch...
Or you're trying to figure out how to start a clothing brand with no money (trick questions because you definitely can't!)...
I'm going to break down everything you need to know.
From the financial numbers, profit margins, and annual revenue...
To a nine step quick-start checklist that will help you launch the fashion brand of your dreams in 2021.
How to Start a Clothing Brand in 2021
Start Clothing Brand Summary:
Starting a clothing brand is difficult, and demands a lot of upfront sweat equity as well as vision. You'll have to design your collections, vet manufacturers, and promote the hell out of your brand on social platforms to jumpstart your clothing brand, plus seek additional investment and business partners.
Total Cost to Start Up:
While this list is not a comprehensive compilation of every you need to start your own clothing company...
It provides a snapshot of what you need to add into your business plan.
Cost Break Down:
Here is a straightforward breakdown of the most basic costs you will need to factor into your startup funding plan.
Costs will shift and change depending on your location and on your specific clothing brand goals...
But this will give you a good feel for what you're looking at before you get started on your own.
Average:
Low:
High:
Production (Dress Example):
$20
$15
$25
Business License:
$150
$100
$200
Marketing Costs:
$1000
$500
$2,000
Modeling & Photography:
$500
$250
$3,500
Cost of Design:
$400
$25
$2,000
Website Creation Fees:
$3,000
$1,500
$8,000
Website Annual Maintenance (Hosting, Edits, etc):
$1,000
$250
$3,000
Point of Sale Equipment:
$1,000
$750
$1,250
Office Equipment Cost:
$1,500
$1,000
$2,500
Average Revenue and Profit Margins of Established Clothing Business:
The average clothing company typically brings in a revenue within the follow range.
Keep in mind that the fashion industry as a whole has surprisingly low profit margins.
Don't expect to be the exception.
This is simply the name of the game.
Average:
Low:
High:
Average Annual Revenue:
$262,500
$25,000
$500,000
Average Monthly Revenue:
$21,875
$2,083
$41,667
Average Clothing Brand Profit Margin:
8%
4%
13%
Average Profit/Take Home Pay:
If you're wondering what you can actually expect to see in your own pocket at the end of the month...
It will probably fall within this range depending on the size of the company you've built, and how far along in the process you are.
Focusing on your ROI and scaling your business will help you to increase your take home pay and overall success.
Average:
Low:
High:
Average Annual Profit:
$51,000
$2,000
$140,935
Average Monthly Profit:
$4,250
$167
$11,745
Now that you've seen your new clothing brand endeavor from a strictly logical and numbers focused view...
Let's take a look at the hands on steps involved in starting your clothing brand in 2021.
Below is my nine step quick-start checklist:
Let's dive right in!
Quick Start Checklist:
1. Hone Your Brand
If you are thinking about dipping your toe into the pool of the fashion industry…
Then there is one thing you need to know:
Branding is everything.
Every successful fashion brand is built around exactly that, being a brand.
Whether you are simply wanting to launch your own line of sustainably made sunglasses, or you’re aiming to be the next Vera Wang…
Start thinking about your brand now.
If you are looking for a little inspiration, I highly recommend reading Donald A. Miller’s, “Building a Story Brand".
You will need a name and logo to start with, but ultimately your clothing brand will need more than this.
Your brand should tell a story, and communicate to the world who you are and what your clothing line is all about.
Sometimes this is done through the brand name itself, like with “Free People”.
The very name itself feels as bohemian as their clothing line actually is.
And sometimes that is done with a slogan and logo.
Like Nike’s infamous swoosh and “just do it”.
What story are you trying to tell?
What feeling are you trying to evoke?
What is your clothing brand all about?
If you brand isn’t speaking clearly, your ideal customers won’t be listening.
2. Write a Business Plan
Once you’ve taken time to hone and sculpt your brand from nothing into something, it’s time to sit down and do the tedious task of creating a business plan.
You might feel tempted to skip this step in order to jump into more exciting portions of this process…
But I highly encourage you to think ahead and play the long game.
Because of the nature of the fashion industry, and ROI for your business investment will not come easily.
Most entrepreneurs starting their own clothing brand will need to seek the help of investors or business partners at some point during their journey.
Which means you will need that business plan when and if that time comes for you.
Approaching a potential investor without a professional and thorough business plan is a recipe for disaster.
The same goes for pursuing a bank for a business loan.
Your business plan is all about facts, figures, and realistic projections.
Sit down and devote adequate time to evaluate to writing your business plan.
It will probably end up being at least a 20 page document if you’re doing it right.
Include things like:
3. Find Where You Fit
The fashion industry is a vast spectrum, and before you launch into designing your own clothing brand…
You need to know where you fit into it.
This will have a huge effect on your marketing strategy, your sales structure, and your financial investment.
There’s a big difference between throwing up a line of t-shirts with your own designs on them, and launching a full collection of high designer evening gowns.
How big is your vision, and what are you aspiring to?
If you are looking to launch something as simple as a cool line of t-shirts, then your financial investment will be much lower.
You can also look into alternative sales channels, like drop shipping or even print on demand.
This will take a lot of pressure off of you when it comes to manufacturing and order fulfillment.
But if you do have dreams of becoming a fashion brand icon, then you will need to be prepared to put in a lot more work.
You will need to:
4. Design Your Collection
This is the phase of the process that you’ve probably been waiting for.
If you’re truly passionate about fashion, which I assume you are if you’re reading this..
Then this is the stage that probably got you interested in starting a clothing brand in the first place.
Designing your collection is a creative and exciting project.
You will begin to see your vision come to life,
And your product and business will start to feel real.
You will also probably need to learn some new skills along the way.
Specifically if you are designing clothes that will be produced by a manufacturer vs by hand yourself or through a drop ship or print on demand service.
There are two kinds of manufacturing warehouses:
They will both expect you to have a tech pack for each one of your clothing designs.
The difference is that the “Cut Make Trim” factory will want it already created and ready to go, whereas the “Full Package Production” factory will probably help you create one.
Either way you go, you will need to familiarize yourself with the concept of a tech pack.
To put it simply, a tech pack is a document that has all of the technical information needed by the manufacturer for each individual item in your brand’s clothing collection.
When you hand over a tech pack to your production team, it will tell them exactly how to produce each item down to the type of stitching and trim you want used.
The best advice I can give you is to be as detailed as possible when creating each tech pack.
The more information you include, the less opportunity for mistakes there are at the factory.
Which saves you money.
5. Partner with a Manufacturer
While the US fashion industry has relied on overseas manufacturing for decades now, you might want to reconsider this.
Typically, larger overseas manufacturing factories require high volume orders, which may not be practical for a small clothing brand company starting out.
If you are wanting to start a clothing brand for cheap, then you might be tempted to work with one of these factories until you see the minimum order quantities.
Then it won’t feel so cheap.
I encourage you to actually look for smaller local-to-you manufacturers.
While they might charge more per item than the overseas alternatives, they are usually more flexible with order minimums.
Plus it gives you the opportunity to build a more direct relationship with their production team…
And have more oversight on the production of your clothing pieces.
6. Order Samples
The very best way to decide which manufacturer to partner with is to order samples of your pieces from several of them.
Ordering samples for your clothing company will become a huge part of your business.
It will also be a great test for the quality of your tech packs.
In fact, you will need to order a sample of every piece, for every order your place.
Even if you’ve already ordered that piece from the manufacturer before.
Ordering a sample before placing a full order will ensure quality control…
And prevent miscommunication and mistakes from happening that will cost you far more than the time and money of ordering a sample piece first.
Once you’ve gotten back samples from a variety of different manufacturers, you can grade each one to narrow things down.
What is the quality and integrity of each item?
How was the communication process from the initial conversation to production and delivery?
How do the price points and order minimums compare to one another?
Etc.
After you’ve graded each manufacturer on these scales, you can decide which one to partner with for starting your clothing company!
7. Marketing and Exposure Strategy
Marketing your new clothing company is something you should be actively working on throughout the entire process.
Don’t wait until the last second to start marketing your new fashion business.
You want to gain awareness and build exposure for your clothing brand from day one.
Since we’re in 2021, this has a lot more to do with social media presence than it ever has in the past.
The social media platforms that you focus on will depend on your product and your target customer.
If you are creating a clothing brand that is marketed towards a younger demographic, then Instagram will be invaluable.
But if your product is better suited to someone like a middle aged woman, then focus your energy on places like Facebook and maybe even Pinterest.
Either way, focus on telling the story of your clothing brand, and building excitement for your launch.
Combine this with creating a stellar website, and maybe even a blog.
You can use your website and blog before you’ve even released an online storefront by starting an email list.
Another valuable technique for marketing a new fashion brand via social media is to reach out to influencers that fit the aesthetic of the clothing company you’re starting.
Some “influencers” will like your product enough to partner with you for a brand deal.
This can be a paid deal, or potentially a deal in which they simply get to keep the clothing.
Usually this will depend on how large of a following they’ve built.
If you’re reaching out to someone with the status of “insta famous”, be prepared to pay them well for a brand deal as this is most likely their full time business.
Getting the exposure of a brand deal like this can set up for major success after your launch...
Because you will already have a large group of people that are familiar with your clothing and excited to purchase from your business!
But a strong marketing strategy requires more than just a social media following, blog, and website.
Ultimately, you will have to be prepared with a lead generation strategy that will attract new customers to your business on a consistent basis.
Fortunately we can teach how to do exactly that through our local lead generation coaching program and online course.
8. Find Investors
As I mentioned briefly at the beginning of this article…
Getting a return on your investment when starting a clothing company can be a difficult task.
Oftentimes you won’t see a return start to trickle in until you’ve launched multiple collections for multiple fashion seasons.
This is simply the nature of the game.
But what this means for you is that you will need one of three things.
You will need:
If you don’t have funds saved up to continue pouring into your new clothing brand as time goes on, then chances are you’re going to need an investor.
Although you can look into getting a small business loan, they aren’t easy to come by.
The standards are strict and difficult to qualify for.
So most people choose to search for an investor or a business partner.
Before seeking out an investor, consider how much ownership of your company you are willing to part with.
With either an investor or a partner, some level of business autonomy and personal profit will have to be sacrificed.
It’s good to know what you are prepared to offer before entering a high pressure conversation.
9. Build Your Team
Lastly, you’ll want to look towards the future.
When you first set out to start your clothing brand, it only made sense to go it alone.
But as your company begins to grow, you won’t realistically be able to do things all by yourself.
There is a lot to juggle when running your own business.
So if you want to see true success down the line, start building a team now.
You’ll want to find a team of like-minded individuals that you can bring on to help you scale your fashion brand to the next level.
These people will be more than just employees.
They will need to be passionate about the fashion industry, and driven to see your vision succeed.
Being a boss is a lot different than just working for yourself, but it can be very rewarding.
A great rule of thumb is to always look to hire people who are even more skilled than yourself.
Rather than seeing this as an intimidating factor, look at it as staffing your weaknesses.
Together, you will be able to accomplish far more than you ever could alone.
And who knows…
Maybe your story and your clothing brand will be the next Ralph Lauren or Gucci!
And if that’s not your style…
Then just replace those two with Urban Outfitters and Adidas or something.
But get excited…
You’re now ready to launch your own clothing brand in 2021!
Pros and Cons
of starting a clothing brand
Pros
In the beginning, it probably won’t be realistic to hire several crews to complete all of the cleaning jobs that you book. You will need to be willing to do the dirty work yourself when starting out. Eventually, you can work your way into a position of oversight and management, rather than getting down on your hands and knees at each job. But it’s important that you are willing to put in the hard work on your own for a while.
The beauty of starting a clothing brand is that you have an opportunity to create and hone your very own fashion line. Even if you aren’t designing the clothes yourself yet, you can selectively choose the right pieces for the brand you are building. It’s a lot of fun, and an extremely satisfying creative process!
This probably doesn’t come as much of a surprise, but the fashion industry is a fast growing one. It’s called “fast fashion” for a reason, after all. So when you open an online boutique, you are going to be tapping into the profits of this lucrative industry.
Cons
The fashion industry as a whole is known for its embarrassingly low profit margins. Unfortunately, this stems from the “fast fashion” industry that is constantly pushing retailers and suppliers to force their prices lower and lower. This is bad news for everyone from the factory to the retailer. And it’s bad news for your clothing brand too.
Because of the time intensive design phase, as well as the significant upfront investments you will need to make… A return on investment as a fashion designer is going to be a long time coming. You are looking at upwards of two years before you will start to turn a profit. Which means you are going to want to have some savings set aside to get you through these initial years.
Another fatal flaw of the fashion industry is that it is heavily saturated and extremely competitive. You won’t just be up against the major name brand fashion companies. You’ll also be competing with all of the smaller boutiques and online brands. Just take a look at Instagram! The platform is flooded with small online boutiques. It’s easy to get lost in the crowd.
Starting a Clothing Brand Can Be Profitable, But Lead Generation Should Come First, Here's Why:
The harsh reality of the fashion industry is that when you start your clothing brand…
You’ll be jumping into a highly competitive industry that is already highly saturated.
Although the fashion industry continues to grow rapidly year over year, especially with online shopping versus retail…
The work it takes to rise to the top should not be underestimated.
On top of the challenges that the industry itself presents from a marketing perspective…
Profit margins for starting a clothing brand are shockingly low.
Essentially:
The odds are pitted against you unless you have a winning strategy.
Your best chance for success with starting your own clothing company will be online…
Since opening a retail shop poses drastically higher startup costs and much lower overall customer reach.
Which means you are going to need excellent online business and marketing skills if you want to get customers flowing in.
So what is the solution?
Let me introduce you to a little something called online lead generation.
Lead generation has been the foundation for my personal success as an entrepreneur...
And it is the business model that took me from making around 2K a month to making 52K per month in five years.
In short, the lead gen business model is centered around strategically using SEO and Google to generate leads for small businesses of all kinds.
Why is this relevant for you?
Because the difference between success and failure in any business is having enough customers.
If you master lead generation, you will have the business and marketing skills necessary to make any business endeavor your start, succeed.
Including your clothing brand.
Click here to learn more about how we can help you get started with local lead generation.
