Have you ever wondered how to start a clothing line? Starting a clothing brand only requires a little investment and some technical skills. You can start a clothing line and make a great living. We’ll show you how.
Marcus Harvey turned his love for Portland into a hometown clothing line called Portland Gear. He started screen printing in college to make some extra money, but stopped to take on his first job.
On Thanksgiving of 2014 he designed two shirts, posted them on Instagram, and sold $5k on the first day. Six years later, Portland Gear is making over $100k per month.
Marcus took the time to explain how to start a clothing line/brand. He gave us a ton of great advice about how to start your own clothing line that we’ll include while providing a step-by-step guide to start a clothing line.
This guide will cover the following steps to starting a clothing line:
- What’s the best way to start a clothing brand?
- Learning the Skills to starting a clothing line
- Come up with a name for your clothing line business
- Write a plan for your clothing business
- Establish a legal structure for your clothing business
- Getting your clothing business ready for customers
- Establish a location for your clothing business
- Get inventory, T-shirt printing machines, and product displays for the brand
- Hire employees for your fashion business
- Financial management of the brand
- Tax and insurance
Step 1 : What’s the Best Way to Start a Clothing Brand?
The first step when you want to start a brand name is to conduct research to determine what is right for you. Your clothing company should be run in a way that works for you, but will also satisfy your customers’ needs and wants.
You may want to run a store focused on a specific niche such as women’s clothing, one that caters to everyone, or you may want a warehouse where you focus on e-commerce. You aren’t limited to just one type, but the type of business you choose will impact every decision you make going forward.
Portland Gear focuses on producing and selling clothing that promotes their pride in their hometown of Portland. Marcus says he got the idea and launched “on Black Friday of 2014…with two t-shirts, two photos on the @Portland page, and a website I built the night before. The first day it did $5,000 in sales and I’ve never looked back.”
Many consumers start their shopping experience online so a shop that can sell clothing in person or online is recommended to start your clothing line.
Keep reading for different types of clothing companies.
Brick and Mortar Clothing Stores
We’ve all been to a brick-and-mortar clothing store. Their business model is selling clothes in a building where people can come to the store, try on clothing, and buy what they like. These stores may sell a single clothing line or multiple clothing brands.
With the rise of e-commerce this part of the industry is hurting. Closures of retail stores have been increasing for at least the last three years according to Moneywise. Despite this, Digital Commerce says retail sales have increased around 3% per year since 2007, meaning the stores that stay open are making more money.
This business model works best once the clothing line is already well established.
Private Label Clothing Brand
This is a clothing company where the business focuses on a specific brand. Portland Gear would fall into this category.
This type of business can be a physical retail clothing store, fashion design, ecommerce, print on demand, manufacturing, or a combination of the types of businesses. A business plan using this model typically focuses on a niche market to satisfy their needs and may expand into other markets later, but keeping with the brand image.
Ecommerce For Clothing
A clothing company focused on eCommerce focuses on running an online store. The company may be a reseller, print on demand, or manufacturer. This can also be a division of a company that sells clothing in retail stores, but the focus is on selling over the internet to expand your target audience beyond the local market.
Selling clothes can be done through a variety of sites. The top places to list your clothing line include:
- Facebook Marketplace
- Shopify offers an easy experience to set up your own clothing store and connect with most of the bigger marketplaces directly from your shop.
- WordPress+WooCommerce work great together for super fast e-commerce stores.
Pros and Cons of E-commerce vs Brick and Mortar Stores
When considering whether to do e-commerce or a brick-and-mortar store there are some distinct differences. The main differences are listed in the table below.
|Ecommerce||Brick and Mortar|
|Sell to anyone in world||Takes longer for customer to receive products||More foot traffic||Selling Confined to people in area|
|Print on demand services||Lower inventory requirements||Customers get product immediately||Store inventory on site for higher costs|
|Lower start up costs||More technology required||Less Shipping Costs||Higher startup costs|
|Able to do as work from home||Added Shipping costs||Unable to do as work from home|
Print On Demand
Print on Demand is an eCommerce business model that requires really low upfront costs because the clothing company doesn’t need to hold any inventory. You simply create a design, add it onto the print on demand company’s garment design software, and connect it to your website to start selling it. Shopify has a great blog about the top print on demand companies.
Fashion designers are focused on designing new clothing that is both stylish and unique. They are mostly focused on the art of their products. When a clothing business reaches this level, the brand is typically at the top of the fashion industry. They are typically artistic people who make clothes and accessories that standout. They can be self trained or go to fashion design schools. If you are interested in fashion design education, here are the top 50 schools.
Wholesale is focused on selling goods in bulk orders. To do this, they will typically need to be able to offer retailers clothing at 50% of MSRP. This is typically a strategy that will be implemented once the company has developed a reputation, but eCommerce solutions have made it easier because you can combine this strategy with print on demand services.
Here’s a great list of apps that make wholesaling easier.
If you want to start a clothing company without having to start fresh, a franchise might be right for you. They have already started the company and sold stores to other locations. They help you with marketing, sourcing, and other requirements.
We took the time to interview an owner of a Big Frog franchise. Hear what he has to say about franchises.
Manufacturing clothing is focused on the creation of the garments from field to thread to final garment. This is the most cost intensive portion of the clothing industry because you’ll need a warehouse, fabrics, employees, and machines that can cost hundreds of thousands of dollars.
I’d really only recommend this strategy at the point in which you are a solidly profitable company and the only way to increase gains is to buy the machines to produce the garments yourself. Make sure to reach out to a financial expert who specializes in clothing manufacturing before doing so.
Step 2: Learning the skills
The next step in starting a clothing line is learning the skills you need to follow through on your business plan. A clothing line needs 5 basic sets of skills to be successful:
- Business skills
Let’s dig deeper into each of these to see how they impact a clothing brand.
Every clothing line needs a designer. This is the person who helps take the idea and makes it a reality.
A fashion designer will typically include several steps in the design process. The steps to design your own clothes include:
- Draw design using paper or digital software, like Tailornova
- Have a pattern maker cut the patterns for the design
- Build a prototype
- Make alterations
- Create a tech pack (design specifications you give to a clothing manufacturer)
- Source the materials and begin manufacturing
This process is called product development and is used consistently in the fashion business. Managing product development is one of the keys to a successful clothing company. Without a controlled design and development process, a company may fail or tarnish their brand identity.
I’m not going to go into all the details of each as each is a highly technical field, but there are a ton of great resources about how to design clothes. Here’s some useful resources:
- Best Fashion Design Schools
- Best Free Online Classes
- Best Fashion Design Software
- Best Print on Demand Companies
I have a client who is in the process of starting their own clothing brand and have personally used Printful to help clients meet their print on demand needs. Their software helps you with all steps to creating clothing designs, making it easier to start building a fashion brand company to sell your designs to potential customers through an online store.
The next skill you need to develop is familiarity with the technology aspect of the industry. Paying a developer to help start your ecommerce store can be expensive. I’ve seen people spend $25k to not get what they want. It’s important to understand the technology aspect before you start.
Technology that will need to be used include:
- An ecommerce platform. Find Investopedia’s review of the best ones here.
- Payment processors.
- Editing Software
- Marketing Software
This information is really important when trying to figure out how to start a clothing line because the costs are much lower to run an ecommerce store with production from a print on demand company that handles the printing and shipping of the items you design.
Most tech companies offer free or low-cost tutorials on how to use their software. Make sure to use them. They were built to help you make the most of their offerings.
Marketing is about going where your target audience is to help them become aware of your clothing line, then turn awareness into purchasing. Marketing can be done both online and through other channels.
Three of the largest marketing companies expect digital marketing to make up over half of all ad spends in 2021. To read more of their insights, check out this blog.
You’ll need to be familiar with the largest three places where you can reach your clothing brand’s customers:
Each of these have a ton of resources to educate people on how to reach your target market with their products for businesses. Make sure to familiarize yourself with them otherwise you’ll be operating in the dark and wasting a lot of money.
Portland Gear only spends about $500/month advertising because they already had a built in following from their Portland Instagram page. They also use a super cool 1973 VW Westfalia to do pop up shops around Portland.
Popup shops are really fun marketing tools to meet your customers where they gather. These are great for brand identity cause they help associate the business with another place that the people already like.
Common places where popup shops are allowed include:
- Music festivals
- Art shows
- Flea Markets
- Sporting events
- Coffee shops
You have to talk to the owners or managers of the location to get their permission, but most are normally agreeable if you meet their conditions. Your municipality may also have laws governing popup shops.
To get started check out the SBA guide on business laws.
Marcus loves marketing and had a ton of tips about it. Watch this video below to see what he has to say.
Production and Printing Skills
Your clothing brand will need production which can be done through a manufacturer or you can print your own t-shirts and other apparel products. If you are going to take on the production, you’ll need to learn how to use the different types of machines.
Some of the typical techniques you’ll need to learn how to operate include:
The best way to learn these techniques is hands-on, which means purchasing your own machines or finding someone who will teach you. I’d personally suggest skipping this step because there are so many more viable options using drop-shipping companies. But once you’ve built the business up, learning to do it can save you some money, but production costs quickly increase the upfront costs to start a clothing brand.
Business skills cover a wide range including accounting, pricing, shipping, and managing inventory. To educate yourself on all of these, would be a lifetime of learning. We’ve provided a list of useful resources for getting more familiar with the subject matters.
- Accounting- Udemy, EDX
- Pricing- Coursera, Udemy
- Shipping-Shopify, BigCommerce
- Inventory Management- TradeGecko, Unleashed
You can also use YouTube videos to learn almost anything these days.
Step 3: Clothing Line Name
I can’t stress the importance of the name you give a clothing brand. It will communicate what the line is all about. Keep reading for best practices when naming a clothing line.
Does the name explain the clothing?
Portland Gear communicates that it is focused on Portland and sounds way better than Portland Clothing, but the name could be confusing at first sight. It could also be the name of a company that manufactures gears for mechanical products or camping gear. The easier it is to identify what the company is focused on, the easier it is for your target audience to find it, while preventing wasted spending on industries that use similar wording.
Is it easy to spell?
Make sure your business name is easy to remember when using a search engine. A crazy name like Quasimodo Couture makes searching for your business difficult. Register domain names for common misspellings and forward them to your website to make it easier for customers to find you..
Including your state, county, or city identifies you as a local business. For example, Portland Gear is obviously focused on…
Does your name fit your branding? Some business owners focus on visuals ideas for a logo before a name. Portland Gear’s logo looks like this:
As you can see, it has their name and the “P” is designed in a way that looks similar to many sports clothing fonts. This helps people recognize the logo as a clothing company.
An example of how a logo can communicate what a company does is the Great Outdoors‘ logo. It uses a deer head to represent that it is focused on hunting apparel and accessories.
Register a .com
Find a name for which the .com domain is available. It’s the most recognizable. You can conduct a search by clicking here.
Give it a go!
See how people like it. Make sure to check what happens if people shorten it. You wouldn’t want to name a business Super Lazy Urban Boots because it would get shortened to SLUB, which creates an awkward appearance that could be intentional or unintentional.
Step 4: Write a Business Plan
You need a business plan to help define your vision for the clothing line objectives and strategy. It’s purpose is to drive the direction of your business by guiding decisions, securing financing, and developing partnerships with other businesses.
Marcus told us,
“We started by setting up at Portland events in our old Volkswagen Van and expanded from there.”
Having a flexible business plan that is constantly evolving is a great approach to the process and allows for businesses to pivot when necessary. Here’s some resources to help with this step.
We’ve searched out business plan templates to help you develop your business plan. Here are some of the best:
- One-page business plan
- U.S. Small Business Administration (SBA) Business Guide
- State-specific templates
- Business Plan Template for a Startup Business
It gets better! Here’s some free and low cost education on business plans:
- How to Write a Business Plan
- SCORE’s free business plans and startup assistance resources
- The Complete Business Plan Course (Includes 50 Templates)
Step 5: Establish a legal structure
You’ve created a name and business plan. Now you need to establish the legal structure for your clothing line. For best results, hire legal representation that has experience starting a business like an attorney, accountant, or tax specialist. They’ll help you get your business started quicker so you can start selling clothes faster.
Licenses, permits, and tax forms
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your clothing brand needs. Keep reading for information on different legal structures.
A sole proprietorship is the easiest way to start a clothing line. The clothing brand doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose your home as well as your business. This structure should only be used if you cannot afford an LLC because clothing lines have work and materials that can cause injuries to employees or customers..
Limited Liability Corporation (LLC)
An LLC is the most common business structure used in the United States because the company protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. You can find your state’s requirements here. People may register in specific states due to the cost of doing business. Delaware and Nevada are common states to file an LLC because of their business friendly laws. Here’s a blog on the top 10 states to get an LLC
Partnerships and corporations
Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations here.
There are several opportunities to purchase clothing printing franchises. Franchising.com has two franchise opportunities in the United States that allow you to start a clothing printing business using a reputable company’s name and business processes. This makes it where an entrepreneur can benefit from the reputation of an established clothing printer that has already worked out many of the kinks of starting from scratch.
Step 6: Getting Ready for Customers
Your clothing brand is now an entity, but there’s more. The order you do the rest of the steps will depend on the resources you have, your skill sets, and the type of clothing store you are running.
There are six areas of business you will need to focus on to get you running:
- Location – Where will you be working?
- Inventory – What will you have in stock and how will you pay for it?
- Employees – Will you have employees and how will you make sure it is a safe environment?
- Finances – How will you keep track of transactions and financial records?
- Insurance- How can you protect what you are building?
- Marketing – How will you find customers?
Finding a location will vary based on the clothing. For instance Marcus started “with a pop-up shop out of my 1970’s VW van.”Over time he has added multiple stores, kiosks, and has plans to open a shop in the mall.
When deciding to rent a space for a clothing line consider:
- How will I store equipment and inventory?
- Is there space for a home-based office?
- Will customers be coming to my location?
- How much inventory will I have?
- How much display space do I need?
- How much space is needed to store inventory?
- Am I going to be having popup shops?
When opening a clothing store, you will probably need to rent space in your area. Whether the space is a kiosk at a mall, your own store, or a mobile space to take to festivals and other events, you’ll need to plan ahead to make sure you have the proper setup.
Marcus told us,
“When I was looking for a location, I came across an old dry cleaning location that had the equipment still in it and I thought it would be a real differentiating factor.”
With popup shops, spaces are typically limited to no more than 10’x10’ or 20’x20’ and the location will normally want to be able to see what the setup will look like beforehand.
To find spaces to rent in your area contact a local commercial real estate agent. You can search for them by your area here.
Know the local ordinances
Each city and state has different requirements for where a business is allowed to be located. Local ordinances might not allow a clothing line to be home-based. How am I supposed to start my shop with so many rules about clothing brands? Just search Municode Library to find your city regulations.
Finding a good spot
When looking for a space to rent, take into consideration your ideal client and what stores they might frequent. For instance, a clothing store next to a hair salon would likely get traffic from the hair salon.. Finding the right place will take some research which will be much easier after considering your marketing efforts.
Inventory, T-shirt Printing Machines, and Product Displays
A new clothing line requires inventory. You’ll need the clothing you’ll be selling, product display stands, registers, and mannequins. Fortunately you can start light and build up as the brand grows.
Marcus started Portland Gear with virtually no inventory and sold out the first day. By starting small, he was able to make a profit quicker and reinvest the money to grow the business.
Startingaclothingline.com offers a list of manufacturers by location and type of clothing. It’s a great place to start when looking for manufacturers.
Used printing machines and product displays
Printing machines and product displays can often be found at huge discounts if you buy them used. You can find printers and product displays through most online markets, pawn shops, going out of business sales, and other places. If you are considering buying an existing business, they should be included in the purchase price. Learn more about valuing an existing business in our guide about buying businesses.
Marcus emphasized the importance of keeping the different types of employees well connected:
“We invested in the people.”
“One of the things we’ve done to keep symmetry of the business is we keep the warehouse, office, and store real close together so everyone can be on the same page.”
An open clothing store might need employees. Depending on your financial position when starting, you can work all the hours yourself or hire employees. Either way there are some things you’ll be required to do. Keep reading for more info.
Tax filing and withholding
Federal and state tax filing requirements apply to new employers. You must keep records of employment taxes for at least four years, including special forms and accounting for state taxes. Don’t worry! We’ve got you covered! Check out the IRS guide for employers here.
Federal employment and labor law posters
All employers must display Workplace Posters, which you can download from the website.
Other requirements include:
- Employment Eligibility Verification (Form I-9)
- State’s New Hire Program
- Worker’s Compensation Insurance
- Disability insurance, varies by states
- Occupational Safety and Health Administration (OSHA)
Hiring people requires posting “now hiring” signs and posting on prominent job boards. Some places you can start posting job requirements are:
Having a prepared list of questions for interviews can make hiring the right people easier. Indeed offers a variety of resources to help you make better hiring decisions. Read their guide, How to hire your first employee.
Employees are typically a company’s biggest expense. There are three common pay structures in business. Each fits different scenarios. Let’s take a closer look.
Flat weekly/monthly rate based on a person working a specific number of hours. This is typically reserved for owners, managers, and some admin roles. You might want to assign this to yourself for budgeting purposes.
This pay structure just tracks the hours an employee works and pays them a set hourly rate. This pay structure is solely based on time, not performance.
Typically used in sales to give employees a percentage of revenue. It is a strictly performance compensation model.
Hybrid models combine two pay structures for instance hourly and commission to compensate for time and performance. The hourly rate will typically be lower than an hourly rate without commission, but the commission should make it where good performing employees make more than they would without commission. These structures also help reduce the variability of pay from week to week.
Paying employees an hourly wage works for most positions for clothing lines, but depending on your business structure a commission or hybrid payment model might make sense. The article, “How to Create a Pay Structure That Promotes Team and Company Growth” offers some insights into thinking about pay structure.
A crucial portion of successfully starting a small business is managing the financial aspect of the clothing brand. Marcus emphasized the benefits of starting small
“You get quantity discounts the more of the same item you buy so it’s better to start small than have 100 different products.”
He typically aims for a 65% margin on the apparel.
You may need some extra funds to start your clothing brand. To find banks that work with small businesses, use this resource.
Let’s look at some tricks you can use to help your clothing line become profitable.
Get a Business Bank Account
Almost every bank offers business checking and savings accounts. Which one will work best for you depends on how you do business.
If all business is by card and you don’t need a branch nearby, online banks typically pay better interest, but going with the big players like Chase or Wells Fargo means you get a ton of support. Here are links to some of the best banks for a business account. Here are some of the most highly recommended business banking accounts:
- Chase Business Complete Banking– Great new account bonuses
- Radius Bank Tailored Checking– No transaction fees, cash back and interest on checking! That’s awesome! Online only though.
- U.S. Bank Silver Banking Checking– Excellent for use with ecommerce and Paypal transactions because you can send weekly deposits to avoid their catches.
- My Top Pick- Axos Interest Checking has higher interest payments for lower balances. I love it when they hook up the little guy!
- Wells Fargo– I was with Wells Fargo for the better part of 15 years, but when they had problems a few years back, it caused me a real headache because the nearest branch was 2 hours away and I couldn’t handle it via phone. Despite that, they normally have great customer service and seem to have gotten past all that.
Investopedia gives a more thorough review of each of these accounts. Ultimately, the interest on online banks tends to be meaningful if you don’t need to deposit cash.
Last time I took the time to review payment processors, they all seem to be basically the same unless you are doing hundreds of thousands of transactions. That being said there are some new players on the market due to the changes in the financial markets brought by cryptocurrency. The primary players in this field are:
- Paypal– We all know the company and use it frequently, but if you’ve never used it for business, be careful. They show a ton of love for customers, but not as much towards businesses. When I started my first business, they thought we were making money too quick and placed a 30 day hold on withdrawals. It was a pain. Once I got past that, it’s all good. They offer third party financing too.
- Square/Cashapp– Square has a ton of useful features and is constantly expanding its ecosystem. It’s a reasonable competitor to Paypal and I would recommend considering offering both.
- Authorize.Net– Visa owned payment gateway. If you go through a bank for your payment processor, this is typically who they use. The banks tend to charge a higher fee than going directly to them.
- Crypto.Com– Lower fees than traditional processors, but still hasn’t perfected the UI/UX experience. If you work with a bunch of cryptocurrency holders, you might want to have it available. I’ve personally added my own on my site. This may be the future of tech, but it’s still in its infancy.
Budget! Budget! Budget!
A budget is the most important tool you can use in business. Without it your clothing line might not make it through the first few years.
Marcus encourages people to “know your margins, reinvest in your business, and grow responsibly.”
Consider the many funding options
Starting a clothing lide doesn’t cost a fortune. Initial investment in owning a clothing brand can be less than $1,000.
Marcus suggests beginners use:
- A print on demand company.
- Social media marketing of less than $500/mo..
Common funding paths include:
- Personal funds
- Loan from family or friends
- Business partner(s)
- Government programs
Alternative sources of funding include:
Click on each to find a list of the best offerings in each group.
Develop a pricing structure
How you price your clothing brand will impact how people view it. If your prices are too high, they’ll go elsewhere. Too low, you’ll lose money. Based on the rules of thumb presented by Marcus in his interview,
“Use a 65% markup, or half that if wholesale. T-shirts are typically $28, Hats $35, and hoodies Just under $70.”
Pricing Communicates Value
Shops will often sell their products or services for a lower price to bring in new customers. Be careful about this. If you sell your clothing for a discount and they tell others, you might have to sell more clothing for the same price. People love a good deal! Just make sure it is sustainable for your clothing brand.
Marcus told us, “You can go buy bargain basement tshirts for $10, but I’m selling a brand not clothing. I feel like $25 is really where people have to think about buying a tshirt. IF they have to think about buying it, they are more likely to wear it.”
Increase prices every year
Inflation occurs every year. To keep your business running, raise your prices 5% per year. It gives you room to increase wages and to make some extra money. Makes sense, right?
Sales Tax and Insurance
All but five states and some cities (or counties) require sales tax. You can find a guide on applying for sales tax on TaxJar. After you register to pay sales taxes, you will need to keep track of the sales to pay them according to state laws. I would highly recommend speaking with an accountant that specializes in taxes to help you comply with your businesses unique needs.
You’ll need some insurance depending on what kind of a business you are running. You’ll need unemployment insurance and workers compensation if you have employees. You may also want a general liability policy and cyber security insurance to protect against unforeseen events that could cause your clothing line business substantial losses.
Unemployment insurance protects employees from entirely losing income when they lose their jobs. It is paid for on both the federal and state level. The federal unemployment insurance is driven by a 6% tax on the first $7,000 of each employee’s income, a total of $420/year per employee.
Your state taxes can reduce the federal portion down to $42/year per employee, but each state has different requirements. You can find a full list of agencies that deal with UI on nolo.com.
Workers Compensation is for when people are injured on the job. There are both federal and state requirements. You can find both federal and state requirements at dol.gov. The policies protect against excessive costs when an employee is injured through acceptable business practices.
General Liability Policy
A general liability policy is not required, but it is highly advised if people other than employees will be at your location. It protects against lawsuits and other occurrences that may occur. Contact an insurance agent to get a quote.
Cyber Security Insurance
Cyber security insurance will protect your clothing brand against online store hacks. Given the average data breach is millions of dollars, this is highly recommended if participating in any kind of ecommerce.
Step 7: Marketing
You’re ready to start a clothing line. You have clothes to sell, but no clients!
How are you going to let people know about your clothing items?
Marketing is crucial for clothing businesses.
From a marketing standpoint, Marcus uses several strategies that he would suggest.
- Only sell what you love. Owning a business is hard work. If you don’t believe in it, it will wear you out.
- Be active within your community. Do pop up shops where your target market is.
- Keep your advertising budget low. Typically less than $500.
- Have certain dates you have sales and be prepared for them.
- Invest in photography!
One of the best ways to learn what works in marketing is to follow others who start a fashion brand. Some of the top influencers in the fashion industry are:
- Cole Sprouse– Movie Star, Photographer, and Western style fashion
- Chiara Ferragni– A model for LVMH, Giambattista Valli, Chanel, and Dior before starting her own clothing line.
Now that you know how to start a clothing line or clothing brand, take the next step. Start your own!
The truth is, all it takes is a great idea, some skills in design and a good marketing strategy to get started. As Marcus told us:
“If you like it there’s other people who will like it. You just have to find them.”
Let us know in the comments below if you have any questions, we’ll be more than happy to help!