Anyone who has started a business knows how grueling the hours are, how intense the grunt work is, and how expensive it can be to get your idea out of your head and into reality. Starting a clothing line is no different, and may even be a little more intricate.
There is a huge scope for growth in the fashion industry and business. According to an estimate, global apparel market alone is worth 3 trillion dollars and it is growing by 2 percent annually. Fashion industry comprises of several segments such as women wear, menswear, children wear, luxury goods, sports footwear and bridal wear.
Cumulative data compiled within The Fashion and Apparel Industry Report paints a bright portrait with worldwide revenue expected to rise from $481.2 billion in 2018 to $712.9 billion by 2022:
Driving this growth are four notable opportunities:
- Expanding global markets outside the West
- Increasing online access and smartphone penetration
- Emerging worldwide middle-classes with disposable income
- Innovating technologies to create experiential eCommerce
Fashion consumers will also have more buying power, as the number of potential customers is projected to grow to more than 1.2 billion by 2020. The good news for fashion is that the majority of these new consumers are within the 16 to 24 and 25 to 34 age groups.
It is clear from the stats that the demand for any fashion items you manufacture and sell will be higher. Now it is up to your caliber as a businessperson to explore the opportunities in the market and turn them into a successful business.
In order for a fashion start-up to survive it needs three key Stages:
Building a fashion brand is not an easy thing to deal with because it takes a lot of time and much energy to introduce your uniqueness to the people who love to notice “Everything” about it.
However, this path is just an initial start for you; it has the perspective to end with a term “successful fashion brand.”
Stage one — Ideology Thinking and Planning
The Key to Success
The key to success is patience and perseverance. In business, there is often a “honeymoon period” where you’re excited and driven about building your brand, but there will come a point where things get tough.
Many start-up brands will begin in the bedroom of a budding mogul who is juggling their idea alongside a day job — it requires a lot of outreach and communication and it can take its toll. However, perseverance distinguishes successful entrepreneurs from those who decide to end their brand before it’s even really begun.
Do Extensive Research Before Getting Started
Before taking a start in the fashion industry, try to do some research, as this one is the securest thing to do to get an edge over your competitors. Keep in mind that the research should be based on whatsoever kind of brand you are opening is worth investing?
Knowing your audience is the most important thing that you need to do. if you fail to present your products in front the right people then it gets very hard to get sales no matter how good your products are. then there are other important questions you need to ask yourself, Would people love to buy it or not?
What should be the tagline, and last but not the least, is the branding itself this is part where most people fail therefore the most important thing for you to research into. Take a look at the current market, and make sure you are not selling something that’s already out there. dig out the factors that can differentiate your from others best starting point is to consider defining cornerstones like it’s fit, patterns, primary colours choices.
Defining your market is important for any brand, but especially for brands in the clothing and apparel market because it’s extremely saturated. By broadly targeting large groups of people, you’re setting yourself up for failure right from the beginning. What you want to do is niche down and create segments.
Some critical questions to ask yourself at this stage is:
- What type of clothing and apparel products do you want to make?
- Who is going to purchase your product?
- What specific value will your product or brand bring these people?
- What will be unique about your product?
- Who is your competition?
Factors to Consider in Product Selection
Great clothing brands are great for a reason. Usually they do one thing very well, and sometimes they do multiple things really well. Before starting your own clothing line, there are four important factors to a successful brand that you’ll want to consider:
Focusing on a specific group of people has several major benefits:
- Easier to Market
- More Affordable
- Less Competition
- Greater Customer Loyalty
Generally, clothing with funny slogans, or hoodies for men are going to be too broad to attack since the markets for both are very developed. Niching down will help you better target your market, allow you to reach them more easily and be able to create more value for them.
For example, instead of clothing with funny slogans, you might cater to a specific and passionate market like clothing with slogans for nurses or firefighters. Or, instead of hoodies for men, you could focus on manufacturing ultra thick/warm hoodies for people in cold climates.
Your designs- whether they’re printed, embroidered, or the design of the actual garment itself- are critical. Not only does it need to look great, but it also needs to look great specifically in the eyes of your target market.
Ultimately, you’ll lose if your clothing designs aren’t aesthetically pleasing and relatable to the buyer. Your designs don’t necessarily need to be complex, in fact many of the best selling clothing brands are very simple, however, they do need to connect with your specific audience/niche.
When it comes to selecting products to sell based on what’s popular, timing is extremely important. New trends and products can be a great boost to your business, but you’ll need to enter at the beginning of the product lifecycle in order to be successful. Learning to pick a hot product before it becomes hot is a valuable skill that comes from knowing your market.
You can fool someone once, but you can’t fool them twice. A pattern that fades and cracks or comes apart at the seams after one wash won’t create raving fans that come back and repurchase.
Not all clothing is the same, there can be huge variances in the quality of clothing items. The quality and composition of the materials you choose will affect how the clothing wears, how it washes, how it fades, shrinks and ultimately how long it lasts. As we mentioned above, quality is paramount to your brand and its success, so it’s important to educate yourself and choose your materials carefully.
It will always be tempting to sacrifice on quality for higher profit margins but you need to consider how the quality will affect customer’s decisions to share your brand with others and repurchase in the long run.
One of the best practices when doing research for your fashion brand is to use social media platforms like Instagram and Pinterest to see what people are loving.
Plan Everything Ahead
Before you get started, have a clear idea of what you plan on doing. Try to decide things like what kind of t-shirts you plan on selling, who your target market is, whether your t-shirts will be available online only or if you’ll eventually be aiming to sell in stores.
Here’s what to put in your one page fashion business plan.
Why are you starting this business and what do you value as a brand?
Who you think your work will appeal to the most and why?
Your StartUp Money
How will you finance the start of your business? Do you have a savings? Will you be working a day job? Will you be borrowing from your friends or family? And how much will you need? Are you making your samples yourself? What will short run production run you?
Will you be creating traditional seasonal collections? Will you be doing a few new pieces each month? Will you be doing one annual collection with a few capsule or specialty pieces throughout the year? Will you have a few signature styles that you introduce in new colors or fabrics over the year? Decide how you see your production working.
Your Revenue Streams
Will you be selling wholesale? Will you be selling on your website? Will you be selling via drop ship? Will you hosting trunk shows and pop up shops? Will you be participating in markets? And how much can you retail and wholesale your work for? What will the market pay?
Your Early-Stage Marketing
How will you reach your customers in the beginning. Independent and emerging fashion brands rarely have a big bank roll to get things started. So you have to have a few ideas on how you plan to reach people. Try to be a little detailed here. Don’t just write “social media”, think a bit about how social media will be leveraged.
If you start with getting the above information down on paper, you will feel a little less lost. You’ll use this outline as you start the business to remind you of what you’re building and why, and to make decisions for your business as you grow.
Reference – Your One Page Fashion Business Plan
Plan a marketing strategy that involves both free and paid advertising methods of getting your brand in front of your target market. Compose a practical business plan to use as a guideline for operating. For starters, identify your brand’s values, mission, objectives, strategies, goals, and long-term vision.
Think Like An Entrepreneur
When you launch a start-up, be ready to grow exponentially. Prepare by learning as much as you can about your customer, market, competitors, technology and trends relevant to your product/service. Learn from others where you can, and surround yourself with strategic advisors (preferably more than one).
To build a fashion business, you must be prepared to think and behave like an entrepreneur. You must come out of your design studio, meet those who know the business and benefit from their experience. Find out how businesses work. Build solid relationships with a wide range of people such as manufacturers, investors, and buyers.
Set Realistic Business Goals
How many t-shirts do you plan on selling this year? How about this month or this week? Alot of people new to the business have no idea, or just don’t care. Then there’s the group of people who are too scared to set a goal out of fear that they won’t reach it.
A successful business sets goals of success, in order to have a solid idea of what it’s working towards. Set a goal and believe in your ability to reach it. As the law of attraction goes: if you know you’re gonna reach it, you’re gonna reach it. If you decide from this day forward that you will sell 10 t-shirts every week, and strongly believe in your business, you’ll do everything you can to figure out a way to get those tees moving. If you don’t set a goal, well of course, you’ll be stuck with a box of t-shirts you were too scared to sell.
Stage Two — Finance Branding and Manufacturing
Have A Vision For Brand Identity
Clothing is very personal because our clothing choices are one of the ways that we define our identity – to both ourselves and to the world. As a result, the brands we choose to wear and the labels we display on our clothes become an extension of who we are and how we see ourselves.
In particular, the millennial generation has been shown to desire an authentic connection with their clothing brands. Fabrizio Moreira writes in “Building a Startup Clothing Brand in a Fast Fashion Economy“:
They want a brand “experience,” they want authenticity. It follows, then, that having a message that resonates with these consumers, and staying authentic to that message, is one of the few ways to break into the cutthroat fashion industry as a small brand…
So, before you sketch your first rendering, ask yourself these important questions:
- What identity do I want my clothing brand to project?
- Who will want to wear my clothes?
- What can customers get from my clothing brand that they can’t get anywhere else?
- What makes my clothing unique? Is it high-end?
- What is the most important part of my customer’s experience?
Your vision for the advancement of your company and its position in the market must be clear to you and your staff. This helps in building a brand identity that is different and unique from your competitors. This means that as a young fashion designer, you need to know what exactly you are doing.
Be clear in mind why you want to start the business in the first place. You should be conveying something through your fashion products that others do not say.
Creating a Moodboard
A moodboard is the perfect way to start pulling together the visual style you’re going for. Essentially a moodboard is a collection of images, photos, designs, colors and and any other snippets of multimedia you find from around the web that serves as an inspiration for your brand. While there are many tools available online to help you collect these elements, the easiest way tends to be using Pinterest.
Selecting a Color Pallet
Your next step in the branding process is to narrow down a color pallet to use. Selecting a color pallet up front will help keep your brand looking consistent through all channels. You’ll want to start by paying particular attention to the dominate colors used in your moodboard since these are likely colors that immediately caught your eye.
From there we also suggest you use a tool like Adobe Color to review other community inspired and voted color pallets to get some additional ideas. Finally, Adobe also offers a tool for helping choose and refine your color pallet, check it out here.
Crafting a Logo
When it comes to crafting a logo for your business, you’ll want a logo that not only represents your brand well, but one that speaks to your target demographic. While we always recommend working with a respected design to craft the perfect logo for your brand, those with smaller budget can get started for almost nothing with a tool like canva , or hire a decent freelancer to do it for you on fivrr
Use a Concise and Catchy Tagline that Resonate to you Fashion Brand
Tagline represents your values and what your Brand stands for, something that is memorable and appealing to your target market. Don’t try and please everyone just think of a tagline that your customers would relate to
Note that inspirational fashion logo designs play a role in building brand identity of fashion levels. The logo has the elements of colors, typeface, symbols, and images that convey your message of business.
Starting a brand can be a costly endeavor and after student loans and monthly bills, your personal savings might not be an option; however there are routes you can take to get funding.
One way is via crowdfunding websites like Kickstarter and Indiegogo. However, if you’re going to go down that route be sure that you’re well prepared; you’ll need samples (which can be costly to obtain in the first place), along with a solid marketing campaign and material.
You’re trying to convince people to actually invest in what is (at this point) just an idea, so you’ll have to work hard to make that happen. Crowdfunding is generally oversaturated, as it is seen as the easy option for new brands.If only it were this easy.
Learn to Take Care of the Finances
Strong financial management – It is important to track and organize finances from day one. Find cost-reducing options to control expenses. It is crucial that you monitor how much money is going out and coming in. The key is to this is an organization, you must find a solution to keep records or accounts payable and receivable.
Once you know what you plan on doing, get an idea of how much everything is gonna cost you. When you start producing and selling t-shirts, keep track of all of your expenses. Get screen printing quotes from several printers and compare prices to get the best deal, without sacrificing quality. Add in the cost for labeling, hang tagging, bagging, or whatever other finishing options you might use. Don’t forget the shipping envelopes, boxes, and product storage.
Don’t be fooled by the hundreds of new t-shirt start-ups you see these days; starting a t-shirt business isn’t cheap. A lot of this should also help you decide how much you should charge for your clothing.
Production / Manufacturing
Coming up with a product idea is just the beginning of a long but exciting road to building your business. The next step is to figure out how you’re going to acquire the products you want to sell. There are several options when it comes to acquiring your new products, and each option has its advantages, disadvantages, as well as unique challenges.
The four most common methods of acquiring your products and inventory are:
|1. Print-On-Demand / Drop-Ship||Very Low||$||Very Low|
|2. Wholesale/Private Label
|3. Custom Cut & Sew Clothing Line||High||$$$$||Very High|
It’s important to understand each of these methods in order to make the right choice for your business. There are pros and cons to each of the methods, and depending on you product, market, and niche, one may be more suitable for you and your business than the others.
Print-On-Demand / Drop-Ship
In a nutshell, POD is an online business model where you outsource your production and shipping processes to a manufacturer of e-commerce goods. You sell products that are printed on “blanks” – blank t-shirts, mugs, bags and other merch. You upload your images to your partner’s app, add the product to your web store and split the profits for every sale.
When people buy your product, the orders are printed, packaged and delivered by your printing partner. You pay your supplier for their materials and work. What’s left is your profit.
Let’s say you pay $9 for a t-shirt with your custom design on it. You list it on your website for $25. Someone buys it, your printing partner receives an order and fulfills it. You sold it for $25, paid $9 to the supplier and earned $16.
Simple, isn’t it?
The best part is that you only have to pay for what you’ve sold, which means little to no capital risk. Also, you don’t need to worry about your inventory space or shipping. You can focus on sales and growing your business.
That’s the beauty of POD dropshipping.
- No set-up costs
- High quality prints
- Unlimited color options
- Perfect for low order quantities or one-offs
- Many clothing options (shirts, leggings, socks, dresses etc.)
- Not cost effective for large production runs
- Generally no volume discounts
- Limited print product selection
- Limited finishing options (tags, labels, etc)
We recommend Printful and Shopify. When utilizing a clothing & apparel print company like Printful (which seamlessly integrates with your Shopify storeit also integrate with woocommerce which is more flexible but more tricky to use, we will talk about setting up the ecomerce site later on ), you can be up and running in a matter of hours for under $50. Once you receive an order for your online store, Printful will also receive the order automatically and begin the printing process and ship it to your customer on your behalf.
In the print on demand business, you need a designer who can produce ‘OMG I need that’ type of work. And talented designers are hard to come by.
How do you even start looking?
This extensive insider’s guide to hiring a print designer will help you skip the recruitment headache entirely and show you the ropes of the process, inside and out.
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.
- It is easy to get started
- There is no need to manage, stock and organize inventories.
- Assortment expansion
- Easy to Scale up/Down
- Allows you to function on a very low operating budget
- Allows you to have a healthy cash flow, as you don’t have to spend a lot until you start seeing money back
- You don’t need to have a website as you can sell at high-traffic marketplaces such as Amazon.com, eBay.com or other online marketplaces.
- While average margins may be lower compared to other retail stores that stock their own inventory, there is no risk of a “bad buy” that results in over stock issues.
- It is not easy to find a good, reliable drop shipper that does not serve thousands of other merchants.
- You don’t control anything except your prices and the products that you “offer”.
- Potential quality control issues
- Risk in offering and selling products that are no longer available from the drop shipper supplier resulting in potential customer service issues
- Reduced margins, or low profit margins especially if you find yourself competing with other online merchants that have set their shop’s prices at rock bottom prices. With competitors making only minimal profits, if you try to match them or compete head on with their low prices you may find that your profits are only pennies.
- Overcrowded market, with the dropshipper supplying the same products as you have to thousands of other drop ship sellers like you
- You may find yourself in a highly competitive drop shipping niche.
- Does not guarantee profits
- Your store is only as good as your ecommerce platform
- Requires basic skills (at least) to manage an online store, including some technical knowledge like uploading products to shopping cart, cropping photos, writing unique product descriptions
- The more drop shipping suppliers you use, the more work you create for yourself
- Shipping costs charged by the drop shipper, which could vary across different drop shippers.
- Paying shipping fees to your drop shipper while you are pressured to offer free shipping to your customer
- Drop shipper can make mistakes, as it is not a guarantee that they fulfill 100% of their orders 100% correctly.
- If selling on huge marketplaces such as Amazon (alongside thousands of other merchants using the same drop shipper), price comparison is easy and you may end up discounting and discounting just to beat everyone else.
AliExpress makes it easy to find products to sell on your store, without having to worry about inventory or shipping. You can pay for products at wholesale prices and have them dropshipped directly to your customers.
A private label product is one that is manufactured and supplied by one company and offered for sale under another company’s (or individual seller’s) brand.
For example, say you have been selling wholesale Wayfarer-style sunglasses on eBay, sourced from a supplier in China.
They are generic sunglasses that don’t have any branding and dozens, if not hundreds, of sellers are selling the exact same product at similar prices with low profit margins.
In this example, private labeling would involve you creating your own brand and arranging with your supplier to print or emboss that brand onto the same, or similar, Wayfarer-style sunglasses.
You might also ask if they can manufacture customized casing that also features your brand name and logo.
That way you have your own, exclusive brand of Wayfarer-style sunglasses ready to sell online.
Private labeling has become a popular way for online sellers to add value to their product offerings and differentiate themselves from the masses of generic products being sold online.
Traditional retailers, such as Target and Whole Foods, are also investing heavily in private label products.
But you don’t have to compete with big-name brands to have success selling private label products online.
- Cost effective in large batches
- Volume discounts
- Potential for increased perceived value from customers
- Potential for increased margins
- Not cost effective for large inventories of designs, colors and sizes
- Can only print simple images and designs (not photographs)
- Usually minimum order starts at 10 units per color/size
- You’ll have to manage inventory and shipping yourself
We recommend Bella Canvas and American Apparel.is pretty much a one-stop shop, providing you with the blank apparel, the printing, as well as an array of clothing line finishing options like adding sewn tags, hangtags, folding and bagging of your apparel. Minimum orders begin at 25 pieces per size/style.
A manufacturer is not just the means to an end – it’s the partner that will help you make your ideas a physical reality. So, making the right choice of clothing manufacturer is critical.
This is especially true if you’re already running a clothing brand and want to start a new clothing line. Your existing manufacturer might not be a good fit for the new clothing line. This often happens, for example, if you started with t-shirts and are now are looking to start a new clothing line and need a new supplier.
You should plan to interview a number of different factory locations to find the one that is a right fit for your business. Remember that you must ensure that you maintain healthy profits margins for your business, and manufacturing will be a large percentage of your budget.
Before you reach out to potential manufacturing partners you’ll need to get your own business in order.
- Determine a realistic, honest budget. Don’t over-commit 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).
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 and know your designs inside and out then you’ll be ready for them.
Custom Cut & Sew Clothing Line
Custom cut & sew clothing means you’re doing everything. We’re talking about designing sketches, turning them into patterns, sourcing fabrics and manufacturers and paying for a full production run (which could be thousands of units).
Making your own clothing isn’t for the faint of heart. This can be an intensive process that can take months at minimum to get up and running. You’ll need to find a manufacturer that is willing to do smaller runs, you’ll need to work with a pattern maker, you’ll have to source and test fabric, and create many samples before you even come close to a finished product. Depending on the exact clothing items you’re looking to produce, just to get a few samples as finished products can cost thousands.
Once you have a finished product, you’ll need to produce a full run with your manufacturer, you’ll need to stock your inventory and develop a shipping strategy to get your clothes to your customers.
- 100% custom product
- Potential for increased perceived value from customers
- Potential for increased margins
- Very high startup costs
- Complex process involving several moving parts
- Can take months or more to launch
Always get a pre-production sample
No matter how modest an invention looks on display or how precisely your commands were executed, try always having a pre-production sample. For some unbeknownst aim or an additional pocket will be added, keys will be moved or dissimilar fabric will be used. A pre-production mockup is also a great orientation tool to check your manufacturing process all over again.
Stage Three — Execution Motivation and Operation
There are two things that would be useful for people starting their own brand to know about: MOQs and tech packs.
MOQs (Minimum Order Quantities) are essentially the smallest amount of an item which the manufacturer can produce without charging the customer too much, and without losing too much profit. The number of designs can depend on the manufacturer themselves, and it can be driven by a number of factors:
1) The availability of fabrics.
2) The deal they have with their supply chain.
3) It can be driven by mechanical processes.
Some printing and embroidery machines take a lot of time and money to set up, so it wouldn’t be worth the manufacturer going to all that effort for under a certain quantity.
Tech packs are collections of all specifications and technical information required for manufacturing, and with such a huge spectrum of options available in the industry, a great tech pack is the difference between the exact product you want, and months of design tweaking, sampling, and expense.
A proper and complete tech pack will reduce errors in production, save you money, prevent miscommunication, and ultimately bring your product to life, exactly how you envisioned it.
Your tech pack should include all possible details about your product including (but not limited to):
- Label & Tag Information
- Packaging Instructions
Below is the Style Cover page of a Tech Pack
Reference – How to Create a Tech Pack for Your Fashion Line
Try Sites like
Here are some Pattern Makers and Technical Designers that have been vetted and provided by Maker’s Row to get you started:
- The Pattern Makers
- JLD Studios
- Paul Francis Designs
- Nicole Melendez
- The Factory 212
- Clothier Design Source
Additional places to hire freelancers to help produce your tech packs:
Doing Photo-shoots of your Products
You will require one to demonstrate possible purchasers.the visual impression is single-handedly the most important factor that potential buyers subconsciously takes into account and the number one reason for them to click the buy button and it’s up to you to influence then to with amazing images that resonate to your targeted audience
There are several ways to do the photo shoot for your products here are some example
- Do Giveaways in exchange for photos of them wearing your products this gives you other benefits as well such as free engagements
- Do it yourself. It’s not that hard all you need is a good background and a smartphone with a good camera
- Use site like fiver to get it done on a budget, Just search the term photoshoot
Setting Up the E-commerce Site
This era of connectivity has introduced a sleeker form of shopping through mobile commerce. Armed with our smartphones, now not only can we shop online but, have easy payment experiences with digital wallet options such as Apple and Android Pay.In fact, BigCommerce found that two out of three millennials prefer to shop online rather than go to a physical store.
People use the web to search and shop their choice of products or services. Your most of the potential customers make online search and then take a purchasing decision. A website for your fashion level is therefore crucial for its success.
Selling a clothing line in an online store is cheaper and less labor-intensive than setting up your own physical store. There’s no monthly rent, mortgage or property taxes to pay, and no fixtures to buy. It’s also relatively easy to create an e-commerce presence nowadays without a lot of technical knowledge.
Most template-based web design services offer some form of e-commerce functionality. And some, like Shopify, are built specifically for e-commerce. 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 available for every other new fashion brand to use, as well.
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.
There are self-hosted open-source e-commerce services available that allow you to use your own uniquely branded website with their e-commerce functionality.
Check out services like WooCommerce,Open Cart and Magento Not only can you use your own original web design, they also scale easily alongside your business as it grows. You can find countlless themes and templates at themeforest
Here are some Statistics according to shopify
Lower digital barriers to entry for all clothing merchants offer the opportunity to market, sell, and fulfill orders globally and automatically.
As a result, worldwide revenue and revenue per user (ARPU) are both projected to grow:
However, while clothing’s absolute numbers are steadily climbing, worldwide revenue growth — as represented by compound annual growth rate (CAGR) — is slowing:
Western-market saturation is the most likely source of this trend. When growth rates are compared between the US, Europe, and China, that reality becomes even starker.
Between 2017 and 2022, CAGR is expected to settle in at …
- 8.8% in the US
- 8.7% in Europe
- 14.1% in China
Ecommerce Fashion Industry: Trends and Strategies
The above data points offer a wealth of growth opportunities for fashion and apparel retailers. Below are some of the latest trends that you can work into your long-term ecommerce strategy. For more, take a look at The Best Fashion Ecommerce Sites and What to Learn From Them.
Know Your Stuff
A clothing brand isn’t just about designing your own clothes; you have to be entrepreneurial minded too. It’s essential to understand the basics of business, marketing, and advertising as it’s no use having a great product that no one can see! You’ll also need to have a realistic view of the financial investment needed to really get your brand off the ground, such as the profits and losses of scaling business
Positioning Your Brand
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 before we talk about how to calculate these costs and mark them up for a profit, know that your business goals can and should affect your pricing strategy.
Industry standards and competitors’ prices are benchmarks, not rules. If you position your line as a luxury or niche brand, pricing using average markups may put off potential customers. Other customers (particularly online bargain-hunters) are put off by high pricing. The ecommerce store Everlane has positioned itself as a consumer-centric, radically transparent brand that cuts out the middle man and shares its savings with customers. Make sure your pricing is consistent with your unique selling proposition, whatever it is.
Pricing Your Clothing Products
A Simple Formula
Most retailers benchmark their pricing decisions using keystone pricing (explained below), which is essentially doubling the cost of the product to arrive at a 50% markup. However, in many instances you’ll want to mark-up your products lower or higher depending on your specific situation.
Here is an easy formula to help you calculate your retail selling price:
Retail Price = [(cost of item) ÷ (100 – markup percentage)] x 100
So for example, say you wanted to price a product that costs you $15 at a 45% markup instead of the usual 50%, here’s how you would calculate your retail price.
Retail Price = [(15.00) ÷ (100 – 45)] x 100
Retail Price = [(15.00 ÷ 55)] x 100 = $27.00
Now that we’ve covered how to successfully markup your products, below you’ll find nine pricing strategies that are traditionally deployed by retailers to stay afloat and one step ahead of their competitors.
Manufacturer Suggested Retail Price (MSRP)
As the name suggests (no pun intended), this is the price the manufacturer recommends that you as a retailer use to sell their products to the general consumer. The reason manufacturers first started doing this was to help standardize prices of products across multiple locations and retailers.
However, a lot of factors go into the end retailer going along with the MSRP, such as the bargaining power of the manufacturer and exclusivity of the product, but for the most part, you’ll find the more mainstream or conventional the product, the more you can expect the prices to be standardized.
- Pros: As a retailer, you can save yourself some serious headache by taking yourself out of the decision-making process and going with the flow.
- Cons: You’re unable to carve out or sustain an advantage over any of your competitors by being able to compete on price or availability.
This is a pricing philosophy that retailers use as an easy rule of thumb. Essentially, it’s when a retailer would simply double the wholesale cost they paid for the product to determine the price. Now, there are a number of scenarios in which keystone pricing may be too low, too high, or just right for your business.
If you have products that have a slow inventory turnover, have substantial shipping and handling costs, and are unique and scarce in some sense then you might be selling yourself short with keystone pricing and could possibly get away with an even higher markup. But, if your products are highly commoditized and easily available elsewhere, using keystone pricing can be harder to pull off.
- Pros: Works as a quick-and-easy rule of thumb that ensures an ample profitability margin
- Cons: Chances are that depending on the availability and how competitive a product is, it’s usually unreasonable for a retailer to mark up a product that high
We’ve all seen this one in groceries stores but it’s pretty common for apparel as well, especially socks, underwear, and t-shirts. Not to mention its usage in the software and electronics industries. This tactic is where a merchants sells more than one product for a single price, a tactic alternatively known as product bundling pricing.
For example, a study looking at the effect of bundling products found in the early days of Nintendo’s Game Boy hand-held console, it sold the most products when the devices were bundled with a game rather than individual products alone.
- Pros: Traditionally, retailers using this strategy to create a higher perceived value for a lower cost which can ultimately lead to driving larger volume purchases.
- Cons: When you bundle products up for a low-cost, you’ll have trouble trying to sell them individually at a higher cost creating cognitive dissonance for consumers.
It’s no secret that consumers love sales, coupons, rebates, seasonal pricing among other promotion related markdowns, and that’s exactly what this refers to. There are several scenarios in you might consider going down this road. The more obvious ones being to increase foot traffic to your store, offloading unsold inventory, and attracting a more price-sensitive group of consumers.
- Pros: Great for attracting a larger amount of foot traffic to your store and getting rid of out-of-season or old inventory.
- Cons: If used too often, it could give you a reputation of being a bargain retailer and could hinder consumers from purchasing your products for regular prices.
Did you ever walk into a store knowing they were having a sale on a hot-ticket item only to buy not just that one item but several others while you were at it?
If so, you’ve gotten a taste of what loss-leading pricing is, luring in customers with a product they want at a lower price than competitors and benefiting from the additional products they’ll purchase while in your store.
- Pros: This tactic can work wonders, especially, when you consider complementary or additional purchases a consumer will make when their in your store, resulting in a boost in overall sales per customer.
- Cons: Similar to the effect of using discount pricing too often, when you overdo loss-leading prices, people will become trained to expect bargains from you.
Retail is a numbers game and surprising things happen when merchants take advantage of the different ways customers perceive their pricing, giving way to the term psychological pricing.
Studies have shown that when merchants spend money, they’re experiencing a pain or loss, but if you help minimize the pain experienced it’s possible to increase the likelihood of customers making the purchase. Traditionally, merchants will do this with ending the price with an odd number like 5, 7, or 9. For example, using $8.99 instead of $9.00.
However, when it comes to deciding which odd number to go to at the end of the day, the number 9 reigns supreme. How do we know? Well researchers at MIT and the University of Chicago ran an experiment on a standard women’s clothing item with the following prices $34, $39, and $44. Guess which one sold the most?
That’s right, pricing the item at $39 even outsold its cheaper counterpart price of $34.
- Pros: You tap into the irrational part of a consumer’s brain and trigger impulse purchasing through perception of a bargain deal or steal.
- Cons: When you’re selling luxury goods, stepping down your price from a whole number like $1,000 to $999.99 will actually hurt the brand perception of what it is you’re selling
As the name of this pricing strategy suggests, it refers to using competitor pricing data as a benchmark and consciously pricing products below them to lure consumers into your store over theirs.
- Pros: This strategy can be killer if you can manage to negotiate with your suppliers to obtain a lower cost per unit while at the same time focusing on cutting costs and actively promoting your special pricing.
- Cons: This can be difficult to sustain when you’re a smaller retailer given the lower margins you’ll be making.
Carrying on from the strategy above, this is where you benchmark your competition but consciously price your products above theirs and brand yourself as being more luxurious, prestigious, or exclusive. This works for Starbucks when people pick them over Dunkin’ Donuts and it’s a scientifically proven fact as well.
Economist Richard Thaler’s study looked at people hanging out on a beach looking for a beer to cool off with the option of purchasing it at either at a run-down grocery store or a nearby resort hotel, and found that people were far more willing to pay higher prices at the hotel for the same beer. Sounds crazy right? Well, that’s the power of context.
- Pros: This pricing strategy can work its “halo effect” on your business and products by giving consumers the perception that your products are of better quality and more premium due to the amount they’ll be paying for them.
- Cons: It may be difficult to pull off if the location and surrounding demographic are too price-sensitive and have several other options to purchase similar products.
This is another psychological tactic where you list both a sale price and the original price to establish the amount of savings a consumer perceives to gain from making the purchase by taking advantage of the cognitive bias of anchoring.
A study by Dan Ariely found that when students were first asked to write the last two digits of their social security number and then asked to consider whether they would pay this number of dollars for items that they didn’t know the value of like wine, chocolate, and computer equipment. Next, they were then asked to bid for those items, and Dr. Ariely found that students with a higher two-digit number submitted bids that were 60-120% higher than those with lower security numbers.
The original price establishes it self as a reference point in the minds of consumers which they then anchor onto and then form their opinion of the listed marked down price. The other way you can take advantage of this principle is to intentionally place a higher priced item next to a cheaper one to draw customer’s attention to it.
- Pros: If you happen to list your original price as being much “higher” than the sale price, it’ll automatically trigger a response in the consumer of having found a great deal, pushing them to act on their impulsive buying habits.
- Cons: If you’re anchor price is perceivably unrealistic it can lead to distrust and customer outrage given the age of information, where consumers can readily research pricing anywhere they happen to be thanks to their mobile devices.
Reference – 9 Strategies for Profitably Pricing Your Retail Products Originally posted on shopify.com
Branded Packaging Options
There are two different types of options when it comes to branding your packaging: the actual elements that you use for the packaging itself, and the additional extras you can include with the package to elevate the unboxing experience. The package elements are the more functional items that are required to actually ship your clothing pieces, whereas the added extras enhance the experience and help to make your customers feel valued.
Elements of a Branded Package
These are the functional parts of a shipping package that you’ll need in order to ship your items from you to your customers. You won’t need every single one of these items, but they’re all options that you can use depending on what you want your packaging to achieve.
Where to Source Packaging items :
Where to Source Stickers:
Promote & Market Your Brand
Launch Your Brand With A Giveaway Campaign
Giveaway campaigns are very powerful and if done properly can result in a ton of exposure for your clothing brand during the first 4 weeks of launch. During this critical initial period, it is all about gaining brand exposure. Most businesses look for sales and do not think of the bigger picture. Don’t get me wrong. Sales are important but during launch and even later on, brand exposure should trump short-term sales.
Come up with unique ideas for giveaways. This could be your own products or other prizes. The important thing is that you should promote the giveaway campaign heavily on your website, social media channels and other PR.
Use Social Media To Tell Your Story
Social media is an amazing, free tool that fashion editors and bloggers are using constantly to discover the next big brand. Your social media presence should make use of relevant hashtags, image best practices and engagement strategies that give off a positive impression.
Getting momentum for a fashion line without a ton of budget is challenging. But there are a host of inexpensive, even free solutions out there that can easily give the impression that you are running a much bigger operation, one that any editor worth her salt should be excited to cover.
seem that time and money is wasted on social media.
The best way to approach social media as a marketing tool is to consider it as a storytelling medium.
So how do you do that?
Construct a robust brand story and then think of ways to tell that story on your social media channels. This means that every post, tweet, share or like has to align with your brand story and express the personality of your brand in one way of the other.
For this to happen you would have to formulate your brand story as a series of expressive ideas.
The trick, however…is to be authentic. Consumers aren’t stupid. If they think you’re fabricating stories and falsifying your brand they will find out. At some point, the truth will come out and the “brand” you built will be in need of some serious damage control if it’s to survive.
A good story makes you feel something and is universal. They want to grasp your values and your commitment to excellence; be inspired and intrigued. Storytelling is the most powerful way to convey these ideas.” ~Mark Truby, Vice President of Communications, Ford Motor Company
Social Media Best Practices
- Respond to comments and inquiries in a timely manner.
- Be personal! Tailor your message to your specific audience.
- Stagger content and do not post duplicates. Duplicate content is not just bad for SEO, it’s a waste on social media. Even if it’s just changing a few words, make sure you’re not constantly posting the same content on different platforms.
- Make sure messaging appeals to your target market.
- Conduct giveaways and unique contests. Use holidays and sales cycles to influence your giveaways. Don’t be afraid to have fun with it.
- Promote discounts and giveaways in social media advertisements.
- Create and post images. Don’t just post pictures from your website. Create custom graphics that highlight your brand’s personality and showcase your clothing in real life. Tools like Canva and PicMonkey can help with this.
- Expose the behind-the-scenes aspect of your industry. Sometimes seeing the effort that goes into making a clothing item or stocking a particular product sparks interest and prompts a purchase.
- Listen to customer feedback and make an effort to truly understand your audience.
- Post information relevant to your audience, not just internal company news or new products.
- Save time by scheduling posts ahead with free tools like Hootsuite, Tweetdeck, Facebook Scheduler and Buffer.
- Use relevant hashtags on Pinterest, Instagram and Tumblr, but don’t go overboard. Using too many hashtags could have a negative effect.
By following these tips, apparel brands can foster a better social media presence. In an age where technology is king, the importance of visual content and social media will continue to rise.
Find Undiscovered Talent On YouTube To Be Your Brand Ambassador
If you have the money to go after well-known celebrities, that is great. If not then don’t wait till you have a lot of money to consider celebrity endorsement strategies. Scour Youtube and identify up and coming talent that aligns with your brand and talks to them about cross promotion. Nurture and encourage the talent so that when they do make it big, your brand gets the exposure that would be hard to achieve in other ways.
This may sound like a difficult strategy but it is guaranteed to give you an awesome ROI.
How To Charge Customers
It’s the all too familiar story. A new customer comes to your store, finds a product they want, at a price they like, and adds it to their cart. They get to the checkout page and then it happens, they get hit with the shipping and handling rates and all of a sudden they start second guessing their decision to buy.
Suddenly a product they thought was a fair price is starting to seem a little expensive. One of two things happens next. Either they decide to continue despite the increased costs, or they abandon their cart and leave your website. The fact is, the majority of times, they abandon their cart, and according to Statista, unexpected shipping costs are the number one reason for shopping cart abandonment:
Image Source: Statista
Your shipping strategy and how you charge customers can be a critical element in the success (or failure) of your online business. Let’s take a look at some of the most popular strategies for charging your customers shipping:
- Offer Free Shipping – For example: Free shipping on all orders over $100
- Charge Exact Costs – For example: Using real-time shipping carrier rates ($8.36)
- Flat Rate Shipping – For example: $10 flat rate to all U.S.A.
Reference – Shipping and Fulfillment
Know Your Competition
Whether you are creating a line or building a retail business, as a fashion startup, you must keep your finger on the pulse of the competitive landscape. This should be done in the beginning stages of conceptualizing your fashion startup
Why is it so important? Analyzing competitors allows you to:
- Differentiate and position your fashion brand
- Create and make strategic decisions
- Plan for growth
Differentiate and Position Your Fashion Brand
Andy Grove, former CEO of Intel, was well aware of competition’s relation to great success. He famously said
Success breeds complacency and complacency breeds failure
This can be done easily nowadays by reading the blogs of competitor brands and signing up to their newsletters to keep tabs on what they’re up to. This knowledge can help you keep up.
In order to stay ahead of your competition in the fashion business, you need to make sure to bring your very best. Being in tune with the competition doesn’t just mean copying their actions. If you only copy what other brands are doing then you’ll still be a step behind. When assessing your competitors, take a look at the overall journey of established brands and see which steps along the way propelled them to success. Also be aware of businesses that are at the same stage as your own, and take note of how their strategy is different from your’s.
Competitor Research – How to Start
We could spend a lot of time on the technical aspects of competitor research – and really, the wider scope of marketing research, but there are a few simple ways to get started.
- Build a spreadsheet: Start with the business variables that are important to you and analyze competitors against those.
- List your competitors in rows and variables in columns. Variables could be things like the web address, price points, mission/ about statements, descriptions of target audiences, descriptions of products, links to social profiles, etc.
- Follow competitors on social accounts – Twitter, Instagram, Facebook, LinkedIn, Pinterest, and email list.
- Follow your competitors on social accounts so you get real-time updates of what they are doing regarding marketing and messaging. You will start to see patterns and understand their product / market fit.
- Visit retail locations
- Visit your competitor retail locations if they have them. Observe who is shopping there, what kind of products they offer and how merchandise is displayed.
The best clothing brands have been built by those who don’t only have a love for fashion, but by those who also have a passion for business and making money. After all, if the business isn’t a success you won’t be able to continue designing and creating new items, which for most is the really fun and rewarding part of owning a clothing brand.
You’ve done it. Your clothing company is launched, you’ve made your first sales and you’re ironing out the creases. Scaling may well be on your mind as an ambitious business owner, with plans for new products or bigger orders.
Take some time to reflect on how your business is going, before committing to any big next steps. In fact, it pays to keep things small and simple for your first couple of seasons, getting to know the reality of production and fulfilment before taking on the next challenge. Your business plan may reflect your growth timeline, but again, be flexible.
Your first job may well be to hire your first employee, to help you with all of the above, giving you some much-needed breathing room to take stock of the clothing business you’ve created.
As a small business, hiring for certain tasks and departments can run you a pretty penny. That’s why the business owner needs to know how to do the grading and fitting, and also be the technical designer.
“You are the one to decide whether you are going to use an agent or go direct to manufacturers, or do private labeling with your clothing line,”
- Branding. Overall branding is very important to ensure that your logo, website and marketing materials are consistent and embody the essence of your brand. Without marketing, your customers can’t find out about you, and should be a mix of strategic advertising, public relations, social media, events and more.
- Accountant. Your business cannot survive without a finance person. If you are really good at clothing and highly creative, you probably aren’t good at the “money” side.
- Product manager. This person will help with manufacturing – line sheets, filing, POs, delivery dates and managing the overall flow of the creation and distribution of your line.
Designing a clothing line is tremendously rewarding, especially when you see your designs on people walking down the street or … on Instagram,
But remember, starting a line is not just making a dress. Be prepared for scenarios like manufacturing glitches and delivery delays, especially if you design seasonal clothing.