Circular business models
Rethinking business models for a thriving fashion industry
Circular business models for fashion, which allow companies to make revenue without making new clothes, represent a significant opportunity for new and better growth in the fashion industry. These business models, which include resale, rental, repairs and remaking, can provide considerable greenhouse gas savings, and could be worth USD 700 billion by 2030, making up 23% of the global fashion market. However, there are four key actions businesses must take to achieve this.
Now is the time to explore a new way of doing business in fashion
In recent decades, the amount of clothes the fashion industry produces has grown and grown, while at the same time, profit margins have shrunk and the impact on the environment has increased. Between 2000 and 2015, clothing production doubled, while over the same period utilisation – the number of times an item of clothing is worn before it is thrown away – decreased by 36%.
This trend led to the global fashion industry producing around 2.1 billion tonnes of greenhouse gas (GHG) emissions in 2018 – 4% of the global total. On top of this, due to ever lower prices and lost revenues – from overstock, stockouts, and returns – profit margins of the world’s leading apparel retailers decreased by an average of 40% from 2016 to 2019. This was exacerbated in 2020 by the impacts of the Covid-19 pandemic, which highlighted the fragility of fashion’s supply chains and saw the industry suffer a staggering 90% profit decline compared to 2019.
Growth of clothing sales and decline in clothing utilisation since 2000
Circular business models decouple revenue from production and resource use.
By decoupling revenues from raw material production – through business models such as resale, rental, repair and remaking – greenhouse gas emissions, pollution, and biodiversity impacts can all be reduced.
Resale, rental, repair and remaking are already worth more than USD 73 billion – and growing. Since 2019, and despite the global Covid-19 pandemic, seven resale and rental platforms – Depop, Rent the Runway, The Real Real, Vinted, Poshmark, Vestiaire Collective, and ThredUP – have reached billion-dollar valuations. These business models have the potential to grow from 3.5% of the global fashion market today to 23% by 2030, becoming a USD 700 billion opportunity, while providing significant environmental savings from increased use and reduced production.
Categories of circular business models
Circular business models can be created by considering and combining the following three categories
More use per user
Enabling a user to wear a product more and for longer. This could include designing products to be physically and emotionally durable, providing services to support long-term use, and empowering users to use their products more and for longer.
More users per product
Designing and providing platforms and/or services that facilitate the movement of products from user-to-user so the products can be used more. Products can pass from one user to another after any period of time and on a ‘one-off’ or periodical basis.
Beyond physical products
Designing and developing non-physical, digital products and/or services that replace, enhance and complement users’ fashion needs and aspirations.
Today, there are four main business models that circulate products and materials in the economy
This includes one-off rentals peer to peer by private owners, as well as large scale rental and subscription models by multi-brand platforms or individual brands.
This includes peer-to-peer sale of second-hand items (online and offline), third-party marketplaces (online and offline), and own-brand re-commerce and take-back (online and offline)
This is the operation by which a faulty or broken product or component is returned back to a usable state.
This is the operation by which a product is created from existing products or components. This operation can include disassembling, re-dyeing, and repurposing.
Circular business models can provide better product margins and competitiveness
Circular business models offer both revenue and cost benefits. They provide multiple revenue streams by enabling businesses to offer new services, such as restoration, customisation and tailoring. Revenue benefits include increased loyalty, access to customer and product use data and increased customer base. At the same time, costs can be reduced due to savings from better resource productivity and risk reduction (e.g. improved inventory management).
Currently, booming models like resale and rental do not always result in environmental benefits
To successfully develop circular business models, their revenue must be decoupled from production and resource use. Currently, while they have great potential, these business models do not always achieve this decoupling and the environmental benefits that come with it.
There are many barriers to this decoupling. Firstly, the way the industry measures success is often based on sales volumes. So, for example, a business measuring its success this way might incentivise product take-back for resale, remaking or recycling by offering vouchers for new products, which results in growth of the linear business. Secondly, products are not always designed to withstand the level of use circular business models require. For example, an occasion dress offered via a rental model that looks faded or out of shape after it is cleaned twice will not provide a viable option, economically or environmentally. Thirdly, current supply chains are optimised for predictable, one-way production and distribution, whereas circular business models require local and global networks that facilitate services such as cleaning, repair and remaking. In addition to these, businesses in the fashion industry miss out on further economic and environmental opportunities by not combining or exploring other, perhaps new, business models that could decouple revenue streams from production and resource use.
Four key actions for businesses
To make sure their business models are circular, and to maximise the positive outcomes, businesses, supported by policymakers, can take four key actions.
1. Rethink performance indicators, customer incentives, and customer experiences
Shifting to a circular business model means adopting practices that increase the use of clothing,...
2. Design products to be used more and for longer
To maximise the economic and environmental potential of circular business models, businesses need...
3. Co-create supply networks
Today, the fashion supply chain and its infrastructure are designed for a one-way flow of products....
4. Scale a wider range of circular business models
Rental, resale, repair and remaking have gained the most traction to date, but they are not the...
Circular business models is available in: English
To quote this study, please use the following reference: Ellen MacArthur Foundation, Circular business models: redefining growth for a thriving fashion industry (2021).
Circular business models: Executive summary
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The Ellen MacArthur Foundation works to accelerate the transition to a circular economy. We develop and promote the idea of a circular economy, and work with business, academia, policymakers, and institutions to mobilise systems solutions at scale, globally.
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Business Model of Fast Fashion Brands
Fashion standards have changed on a daily basis in response to trends , customer preferences , supply and demand . To maintain a favourable result, fashion enterprises should keep an eye on the market every day by manufacturing new designs that could bring good results.
Have you heard of Paris Fashion Week , where celebrities and models dress up and walk the catwalk to show off the latest fashion collections from designers? In simple terms, well-known celebrities such as Gigi Hadid , Kendall Jenner , Adriana Lima , Cara Delavigne , and others walk the runway by introducing new low-priced stylish clothing that was designed by well-known or up-and-coming designers to influence a new line of clothing/accessories to retail stores that can create trends and boost purchase-power among audiences.
Fast fashion business developed in the late 1980s , with the market-based model by bridging the gap between creation and consumption by positioning this as a quick, low-cost, and disposable item.
Where do Fast Fashion Brands Operate? Main Products and Services Target Audiences Fast Fashion Business Model What's Unique About the Business Model of Fast Fashion Brands?
Where do Fast Fashion Brands Operate?
Fast fashion retailers such as ZARA , H&M , Gap , UNIQLO , Louis Vuitton , Shein , and many more operate on a seasonal basis, with new outfits and accessories arriving in stores every four to six weeks, often more often than the rest of the fashion industry.
Furthermore, it varies by company; for example, ZARA receives new clothing supplies twice a week. In Australia , Brazil, China , France , Germany, India , Indonesia, Japan, Russia , South Korea, The United Kingdom , and The United States , fast fashion is usually sold through physical stores or online auctions. Aside from that, the top nations for sourcing fast fashion clothing and accessories are India , Cambodia , Vietnam , Indonesia , and Turkey .
Main Products and Services
Fast Fashion became so ubiquitous and successful that you could buy runway clothes or upcoming trends apparel from popular brands such as H&M, Zara, GAP, and others in advance at a discounted price before they hit the stores. From creating mass production of new clothing lines, selling them at low prices, standardizing fashion styles in advance, earning tons of money out of it to making a trend in the future- fast fashion businesses benefit a lot.
Fast fashion businesses usually cater to consumers who value fashion above all and can buy the product. Even persons with a middle-class income may afford and buy clothing from fast-fashion labels.
Fast Fashion Business Model
Before the 1980s , fast fashion businesses were product-driven , but by the late 1990s , they had evolved into a market-based business strategy . The fast-fashion industry, in particular, embraced two strategies: Management Style and the Quick Reaction Approach . Fast fashion management is used to meet people's demands for aestheticism by wearing the newest and most fashionable clothing styles promptly. In the textile business, quick reaction methods are used to improve manufacturing techniques to remove time from the production system. Fast fashion is also linked to other market categories, such as premium and luxury, that use a supply chain acceleration and continuous supply approach.
What's Unique About the Business Model of Fast Fashion Brands?
A company's profit strategy is referred to as its business model . It specifies the items or services that the company intends to sell, as well as the target market it has identified and any expected costs. For both new and existing businesses, business models are crucial. They assist new and growing businesses in attracting capital, hiring top personnel, and motivating management and employees. Established companies should keep their business strategies up to date regularly, or they will miss out on future trends and issues. Investors use business plans to assess companies that they are considering investing in.
A business model is a high-level strategy for running a profitable business in a particular market. The value proposition is an important part of any business plan. This is a description of a company's products or services and why customers or clients find them appealing, ideally articulated in a way that sets the product or service apart from its competitors.
The business model for a new company should also include expected beginning costs and funding sources, the organization's target client base, marketing strategy, a competitive analysis, and income and expense predictions. The strategy may also include ways for the company to collaborate with other well-established businesses.
Successful firms have business strategies that enable them to meet customer needs at a reasonable price over time. Many organizations update their business models over time to meet changing market conditions and demands. When considering a company as a potential investment, the investor should learn how it earns money. This entails investigating the company's business model. The business model, however, may not reveal everything about a company's prospects. However, an investor who comprehends the company strategy will be able to make more sense of the financial facts.
There are as many different kinds of business models as there are different kinds of businesses. Traditional business strategies include direct sales, franchising, advertising-based, and brick-and-mortar storefronts, for example. There are also hybrid models, such as companies that combine online retail with brick-and-mortar stores or with sports leagues like the NBA. Within these broad categories, each business plan is unique.
Fast fashion, as the name implies, manufactures and rapidly produces new apparel products for audiences before they emerge in offline stores. Many reputable brands, such as ZARA, Calvin Klein, Louis Vuitton, Gap, Forever 21, and many more, sell their latest designed clothing lines to audiences at a cheap rate in advance during fashion week, which is then sent to shops as a mass-production to fulfil revenues and trends. Furthermore, a fast-fashion business advantages a company in a variety of ways, including purchasing the latest products ahead of time that creates timely trends, designing and varied styles of clothing availability, low-cost production, reasonable costs, and quick profits.
What is a fast-fashion business?
Fast Fashion is a term used to describe apparel and accessories that are created to follow current industry trends but produced with less expensive materials to keep the price low. Fast Fashion has been popularized among regular consumers by apparel companies such as H&M, Zara, and Forever 21 over the previous two decades. UNIQLO, GAP, Primark, and TopShop are among today's biggest fast fashion brands. While these brands were formerly thought to be radical low-cost challengers, Misguided, Forever 21, Zaful, Boohoo, and Fashion Nova are now even cheaper and faster alternatives.
What are the topmost fast fashion businesses?
Zara, H&M Group, UNIQLO, GAP, Forever 21, Topshop, Esprit, Primark, Fashion Nova, and New Look are all major players in the fast-fashion sector. Many businesses are both merchants and manufacturers, while the actual production of garments is frequently outsourced.
How do they make money out of it?
Fast fashion can only make money if it sells a large number of items, which it does. They enable retailers to provide their customers with current product offerings regularly. The global fast fashion market was expected to be worth $35.8 billion, according to fashion industry figures. Every sector was shaken in 2020, and we all know why. Fast fashion is expected to be worth $31.4 billion in 2020, showing a –12% compound annual growth rate.
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Starting a clothing business requires a passion for clothing design and fashion. But in order to create a successful fashion line that lasts, you also need a business plan. If you’ve ever wanted to break into the fashion business, you may want to check out our clothing and fashion brand business plans.
Shops, boutiques, clothing design, and eCommerce are all covered here to give you ideas and planning elements to successfully launch your own business.
Or to develop a more modern business plan, that fits your retail business perfectly we recommend you try LivePlan . It contains the same templates and information you see here, but with additional guidance that helps you spend less time planning and more time designing the next big fashion trend.
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How to write a fashion business plan
A successful plan will lay the groundwork for transforming an idea into a functional business, and help get investors on board.
What do fashion giants on Fifth Avenue and budding designers working in basements have in common? Before they started manufacturing dresses and hiring app developers, they all had a business plan. Perhaps you want to turn your creative vision into a fashion label. Or you’re ready to disrupt the old guard with a game-changing startup. But you have to start with a plan.
“The business plan should come before your designs,” says Hillary France, founder and chief executive of Brand Assembly , an organisation that helps emerging designers build their businesses. For fashion startups with resource constraints, a plan helps crystallise what, how and to whom you’re selling; establishes what makes you unique; identifies your competitors; and most importantly, shows that you can make money.
Research the market
For creative types, writing a business plan can feel a little overwhelming. But business courses and access to market research and competitive analysis are available. Aspiring fashion executives based in New York, for example, can apply for one of the 25 spots in the FIT Design Entrepreneurs annual programme. Market research firms like Euromonitor and NPD also regularly release reports about market trends and growth rates. While these can cost over $1,000, excerpts are readily available.
It can also be helpful to consult blogs written by venture capitalists like Fred Wilson and Brad Feld for advice on writing a business plan, says Sutian Dong, a partner at Female Founders Fund , which has invested in Rent The Runway and Eloquii . Not only do these provide general advice, but they’re also a window into how successful investors think.
But not all research can be done behind a screen. “It’s about doing the legwork,” says Haeni Kim, founder of direct-to-consumer womenswear label Kitri . Kim thought she had a niche as a “bridge between high street and contemporary”, so she visited bricks-and-mortar shops to gather data and experiences from sales associates to confirm her hypothesis. Kaelen Haworth, the designer behind direct-to-consumer womenswear brand Second Sight , cold-emailed designers who found success in a similar space for advice and found that they were happy to help.
Use family and friends
When raising funds for a business, don’t forget that everyone consumes fashion. “Using people around you is very helpful and very eye-opening,” says Kim, who polled her friends and family via Survey Monkey to develop her deck of consumer insights.
That’s also the case when doing the actual work of plugging numbers into a business plan. Haworth suggests recruiting a friendly MBA student, either as a favour or for a minimal fee, to help create financial spreadsheets. “I’m much more visual, so for me to plug in a number — like, ‘I make 25 of this, what happens to my potential for profit?’ — is hugely helpful,” she explains.
But fashion is ultimately a visual business, and the plan could then lead to a prettier, summarised “pitch deck”, which is used to present the business plan to investors when asking for funding . The pitch deck can also be used to solicit advisory board members, who can use their experience to test a design vision against reality. J eanette Nostra , executive-in-residence at FIT’s Design Entrepreneurs programme, suggests pulling together an advisory board, which could consist of designer mentors, past professors and friends and contacts with experience in law and finance.
All of this requires patience. Kim and Haworth both estimate that putting their numbers and business plans together took around a year before launching their brands. Here’s a template, which should be organic and fit your business.
This section covers the “elevator pitch” for your unique idea as well as a one-sentence mission statement. Summarise your brand and explain what differentiates it. Also, quickly outline your target market, target revenue goals and timeframe. The executive summary should be written last — after all the numbers have been run. It should be no longer than two paragraphs.
Here is where a brand presents its founders’ relevant experience: education, past jobs and unique skills. Also include the form of business entity , based on your location, and list any appropriate partners. Detail your product specifications and manufacturing process. Plus, include how often you will fulfil orders and where/how you plan on distributing and selling. Finally, list the significant challenges you anticipate facing.
This is a chance to show off meticulous market research: identify and detail the opportunity and size of your specific market, your competitors and your target customers.
Manufacturing process and operations
Determine and identify manufacturers and suppliers required to produce your line and detail the costs. Remember to include the costs of samples and account for currency fluctuation if suppliers and manufacturers are based overseas.
Marketing and distribution
Lay out what channels (wholesale, department stores, boutiques, direct-to-consumer) you will use to sell your product while detailing the launch timeline and marketing efforts. If you plan on hiring a showroom or distributor, explain that relationship and costs. Also, how will you scale the brand?
Whether calculated via Excel, Quickbooks or another number-crunching format, this section is crowned by the income statement, which lays out your revenues, expenses and profits and losses over a specific period. Also, present your three-year sales projection to illustrate annual growth plans and a cash flow statement to break down liquidity and assess funding needs for the future. Lastly, include a sheet detailing initial startup costs.
Fashion Business Manual by Fashionary: A visual, step-by-step guide to launching and scaling a fashion label.
Blue Ocean Strategy by W. Chan Kim and Renée A. Mauborgne: Instead of battling your competitors, the authors describe how to identify and tap whole new areas for growth.
Employees First, Customers Second by Vineet Nayar: As a creative, Rokh designer Rok Hwang says this book was “essential” for understanding how to build and manage his business.
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BY Vogue Business
Jan 06, 2022
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4 Direct To Consumer Business Models For Fashion Brands
I love the direct to consumer model. I suggest it to almost all my clients. The control you have over your presentation is a great reason. The margins are high. You can connect with you customer in a more intimate way and create a strong brand experience. Also you can really get a handle on what your buyer wants, needs, and what they say about your line. The education is invaluable for making your product even more relevant for your shoppers. What options can you consider?
- Mobile/On Line – Selling through your website is a great way to sell your product. The cost to set up is relatively inexpensive. You are open 24/7. And you can make a website that looks very high end.
- Own retail stores – This is a more expensive method. You have the overhead of the store plus the cost of building the store. You also have to have enough product to fill the store. A retail store will give you terrific exposure. You can design the environment to enhance your product and contribute to the brand story.
- Trunk shows /In house parties – This is one of my favorite methods. It involves going to people homes or businesses to present your product. You can do this one on one or with groups. I believe that this model will continue to gain momentum. Consumers more and more are gravitating to brands where they have a personal connection. What can create a more personal experience than having a one on one with your customers in their own settings?
- Events/Fairs – This could mean many things. From street fairs to rock concerts. Usually you buy a table or booth and sell your wares. I know a young women who sells her t-shirts at comic-cons. She rents a table for about $300 and sells on average $5,000 in product. Of course there are no guarantees your product will generate that much volume but it is another option to consider.
These days it is very difficult to get a store to buy a new brand. By going direct to consumer you can develop your customer base so that when you are ready to sell to stores you have a history of success you can show the buyers.
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The Slow Fashion Business Model In A Nutshell
Slow fashion is a movement in contraposition with fast fashion . Where in fast fashion, it’s all about speed from design to manufacturing and distribution , in slow fashion instead, quality and sustainability of the supply chain are the key elements.
Table of Contents
A quick timeline of how Slow Fashion came to be
By the 2000s, a company building up its supply chain for decades had become the mammoth of fashion.
That company was Zara. Zara epitomized the fast fashion industry, as its business model sat on top of a few key principles (like the fast following, low price, and variety) and a core objective: speed.
By fast following fashion trends, shortening the manufacturing cycle, and setting up just-in-time logistics serving its flagship stores, Zara became a behemoth:
As the 2010s came, a new trend started to shape the fashion industry.
That was the social commerce trend. As in countries like the UK, the penetration of e-commerce was high; some UK players, like ASOS , led the way in this transformation, from fast fashion to ultra-fast fashion :
The ultra-fast fashion business model was epitomized by ASOS, among others, and it further prioritized the supply chain’s speed and efficiency with a strong online twist. In short, no more flagship stores to operate.
The money that other fast fashion players like Zara were spending to operate these stores were instead used by ultra-fast fashion players to run their online operations and further optimize manufacturing and logistics to serve a global audience:
From there, another, further evolution, this time headed by China, came with real-time retail , a further “improvement” from the ultra-fashion business model, where timing from idea/fashion meme to distribution got shortened further:
Among the players that most mastered this business model, SHEIN led the way:
In parallel, an opposite movement has been developed with the fast fashion business models from the 1990s to the 2020s.
A player that highly emphasized the slow fashion movement is Patagonia, which, as it highlighted in its Sustainable Apparel Coalition :
An apparel industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities.
The Slow Movement evolved in parallel with the fast fashion movement as an alternative business practice. Indeed, as explained on the Patagonia website :
Since 1985, Patagonia has pledged 1% of sales to the preservation and restoration of the natural environment. We’ve awarded over $140 million in cash and in-kind donations to domestic and international grassroots environmental groups making a difference in their local communities. In 2002, founder of Patagonia, Yvon Chouinard, and Craig Mathews, owner of Blue Ribbon Flies, created a non-profit corporation to encourage other businesses to do the same.
How does this translate into practice in terms of the supply chain? As Patagonia highlights :
The purpose of Patagonia’s Supply Chain Environmental Responsibility Program is to measure and reduce the environmental impacts of manufacturing Patagonia products and materials. We implement our program at supplier facilities all over the world and cover a broad range of impact areas, including environmental management systems, chemicals, water use, water emissions, energy use, greenhouse gases, other air emissions and waste.
The attempt to build a more sustainable supply chain moves along a few key areas, what Patagonia calls a “ 4-Fold Approach to Supply Chain Decisions, ” which, as the company highlighted:
This process includes screening potential new suppliers for the ability to meet our (1) sourcing, (2) quality, (3) social and (4) environmental standards.
To execute this, Patagonia built a Social and Environmental Responsibility team (SER) to ensure these practices are implemented.
- Slow fashion is a counter-movement to fast fashion, focusing on ethical, sustainable, and environmentally responsible practices. It advocates for a departure from the rapid cycles of design , production, and distribution that characterize fast fashion.
- Zara and H&M revolutionized the fashion industry in the late 1990s and early 2000s. Their core principles included speed, variety, and affordability.
- Fast fashion brands leveraged shortened design -to-market cycles, often measuring production in weeks rather than months. This allowed them to quickly respond to emerging trends and consumer demands.
- The 2010s brought the rise of social commerce, with ASOS being a prominent example. The shift to online operations enabled ultra-fast fashion.
- Ultra-fast fashion emphasized mobile e-commerce, short sales cycles, and rapid response to trends. Flagship physical stores became less relevant as online platforms took precedence.
- China led the way in real-time retail, a progression beyond ultra-fast fashion. This approach further compressed the time between a trend’s emergence and its appearance in collections.
- SHEIN became a notable player in real-time retail, rapidly transforming fashion trends into clothing collections within days or a week.
- Patagonia emerged as a leader in advocating for slow fashion principles. The brand shifted the focus from speed and profit to environmental responsibility and community impact.
- Slow fashion promotes ethical practices, fair labor conditions, and reduced environmental harm in the production process.
- Patagonia’s Supply Chain Environmental Responsibility Program aimed to mitigate the environmental impacts of manufacturing its products.
- The “4-Fold Approach” scrutinizes potential suppliers based on sourcing, quality, social responsibility, and environmental standards.
- Patagonia’s commitment to sustainability extended to allocating a percentage of sales to environmental preservation and restoration. This approach encouraged other businesses to adopt similar practices.
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How to Start a Clothing Line or Clothing Brand: The Definitive 2024 Guide
Will your business idea succeed? Take our quiz - completely confidential and free!
Thinking about starting your own clothing line or brand ?
While it might seem like a walk in the park, the reality is, it requires more than just a flair for fashion. Successful clothing brands result from passion, business savvy, and an understanding of marketing, manufacturing, retailing, and more.
For the past fifteen years, crowdspring has been the catalyst for thousands of businesses, including countless clothing brands. We have honed our insights and tips on initiating, branding, and running a successful business.
Whether you’re a budding designer or an entrepreneurial maven ready to dive full-time into the fashion world, this guide is your launchpad. Get ready to explore the A-Z of setting up a thriving clothing line, from design and production to building an online presence and securing potential partners or investors.
Let’s dive into the bustling, vibrant fashion world and turn your dreams into reality – all with industry-tested advice from seasoned professionals.
How to Start a Clothing Line in 11 Steps
- Develop your fashion design knowledge and skills
- Carving out your unique brand identity
- Understand fashion trends but dance to your own beat
- Choose a business model, crunch the numbers, and write a business plan
- Find partners or investors
- Design your clothing line
- Establish clothing production and manufacturing
- Set your pricing
- Launch your line: approaching fashion retailers
- Build your online store
- Market your clothing line
- Frequently asked questions (FAQs)
Let’s get started.
1. Develop your fashion design knowledge and skills
A knack for fashion design, akin to the self-taught legends like Vivienne Westwood, Alexander McQueen, Coco Chanel, and Dapper Dan, can be a strong starting point. They discovered innovative ways to bring their fashion ideas to life.
But even if you don’t naturally have fashion skills, don’t worry. We now live in a digital age, where learning to reassemble an engine or customize a t-shirt is a YouTube tutorial away. It opens up endless possibilities to learn and hone your design skills even without stepping into a classroom.
While it’s feasible to jumpstart your fashion line without formal schooling, pursuing structured education can open doors to the current industry know-how, hands-on practice with tools, networking with like-minded peers, and mentorship from industry veterans.
For instance, Stella McCartney amassed substantial knowledge and industry insight by studying at Central Saint Martins while learning from her time at Christian Lacroix and her brand. Gaining real-world experience is invaluable for understanding the ins and outs of running a successful clothing line.
Learn about fashion design
Whether you choose a brick-and-mortar institution or prefer virtual learning, there are abundant educational resources to fit your needs. Prestigious schools like FIT in New York and Istituto Marangoni in Italy have earned their stripes for world-class fashion programs.
Many fast-track or online courses can fill the gap for those fueled by passion but constrained by time or budget. Your local community colleges offer flexible digital or part-time programs that can be adapted to your schedule and financial plan.
Online learning platforms like Coursera, Skillshare, and LinkedIn Learning offer fashion design courses taught by industry stalwarts like Diane von Furstenberg. These courses equip you with knowledge and provide forums for collaboration and feedback.
Additionally, services like crowdspring provide budding entrepreneurs with affordable, custom clothing design and naming services.
So whether it’s improving your sewing skills, learning about color theory , or crafting your brand identity, remember: there are resources to help you every step of the way.
We recommend these resources:
- Six Important Reasons Your Fashion Brand Needs Good Design
- How to Start a Successful Online T-Shirt Business: The Definitive Guide
2. Carving out your unique brand identity
‘Brand’ is more than just your company logo design ; it’s the heart of your fashion label. It captures your mission, your values, and the essence of who you are. It narrates your story and what you stand for. That’s why it’s so crucial to take the time to build a compelling brand.
Our choices often mirror our personal identities, becoming an expressive extension of our self-image. Hence, the brands we prefer and the labels we flaunt play a significant role in how we perceive ourselves and project ourselves to the world.
This connection with brand identity is particularly potent among millennials, who crave an authentic bond with their chosen brands. As noted by Fabrizio Moreira:
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…
The new-age consumers seek brands that offer an ‘experience’ and resonate with authenticity.
Thus, crafting a compelling brand message and consistently maintaining its authenticity is a potent way for small brands to carve a niche in the highly competitive fashion industry.
Developing brand guidelines can be a game-changer. They can serve as your north star, guiding everything from your visual aesthetic and website design to your marketing campaigns. These guidelines can even help you decide who to partner with, which retail outlets align with your vision, or who to bring on board your team.
A vital part of this brand-building process is leveraging social media. It’s the perfect platform to create a rich tapestry around your brand’s lifestyle. Show your followers what inspires you, share glimpses of your creative process, and tell the unique story behind your brand .
Consistency is the cornerstone of any successful social media strategy. This doesn’t just mean posting daily but ensuring your content is constantly engaging, true to your brand, and offers something valuable or interesting to your audience. This might mean showcasing travel inspirations, sharing snippets of your new designs in the making, or even throwing in fascinating facts and stats about your brand’s growth.
In the end, building a strong brand is about creating a universe that resonates with your audience, where every element – from your designs to your Instagram posts – weaves into a cohesive, captivating narrative.
So, before you pour your creative energy into sketching your first design, pause and reflect on the following critical questions:
- Is my biggest challenge understanding how to start a clothing line or finding a unique clothing line to design and launch?
- What persona do I envision for my clothing brand?
- Who is my ideal customer? What is my target demographic?
- How saturated is the market for my type of clothes?
- What unique value does my brand offer that customers can’t find elsewhere?
- What sets my clothing line apart? Is it high-end luxury or affordable style?
- Is there a pricing strategy that will appeal to my target market?
- What key elements shape my customer’s experience?
Your responses will form the foundation of your brand and influence your brand strategy . All future branding decisions should align with and expand upon these core concepts. Everything from your business name and logo to your website design and custom email address should reflect the brand identity established here.
- Brand Identity: The Definitive Guide to Building a Strong, Consistent, and Memorable Brand Image
- Branding: Mastering the Art of Building a Powerful Identity and Lessons from Leading Brands
- Grow Your Small Business with Consistent Branding
3. Understand fashion trends but dance to your own beat
Picture this: models walking down the runway in your outfits. They echo the latest trends but also have a unique twist.
Here’s the thing about fashion – it’s a wild party, with trends coming in like the latest dance craze. But just like at any great party, you don’t have to do the Macarena if you’re more of a Twist and Shout person.
Yes, design school will teach you how to make everything from the slinkiest lingerie to the swankiest ball gowns. But the real magic? That’s in finding your groove, focusing on it, and making it your own. That’s how all renowned designers made a name for themselves in the fashion industry.
Keeping your finger on the pulse of fashion is essential, but it’s equally crucial to remember to stay true to your brand’s spirit. It’s not just about hopping onto every trend train but about translating these trends into your unique design language.
Consider the athleisure trend. You may not have sports gear in your collection, but how about designing a cool woven crop top that would look rad with yoga pants? That’s how you make the trend dance to your tune.
During the global pandemic, many designers swiftly switched gears, adding fashionable face masks to their collections, turning a grim necessity into a style statement. And guess what? Those masks didn’t just fly off the shelves; they also became repeat customers and expanded the market for the brands’ other clothing.
So, where do you find inspiration for your unique fashion dance? Fashion publications, style influencers, fashion newsletters, and podcasts are a treasure trove of ideas and often forecast trends before they hit the runway.
Looking for some real-world examples of how to find your unique groove? Check these out:
- Sophia Amoruso turned vintage clothing into a cool, edgy fashion brand with Nasty Gal. She carved out a space for trendy, affordable fashion that spoke to young, independent women.
- Yael Aflalo started Reformation to make sustainable fashion sexy. It responded to the fast fashion crisis and resonated with environmentally conscious consumers.
- Rebecca Minkoff has made a name for herself by focusing on accessible luxury. Her bags have found a sweet spot between high-end and affordable.
- Brunello Cucinelli has made a brand that revolves around “humanistic capitalism.” His luxury brand focuses on his workers’ fair treatment and compensation, appealing to the ethical luxury market.
- Sara Blakely founded Spanx to fill a gap in the market for comfortable and invisible shapewear. Her products revolutionized the undergarment industry and became a staple for many women.
- Oliver Tezcan launched The Idle Man to respond to the lack of dedicated online spaces for men’s fashion. His brand caters to the modern man, aiming to make stylish clothing simple and accessible.
- Waris Ahluwalia founded House of Waris, a jewelry brand that blends traditional craftsmanship with modern aesthetics. His designs have a unique identity that merges his Indian heritage with contemporary fashion.
- Suzanne Collins brought inclusive sizing to high-end fashion with Universal Standard. Her brand focuses on making quality, fashionable clothing available to women of all sizes.
- Rihanna transformed the beauty and lingerie industry with Fenty Beauty and Savage x Fenty. Her emphasis on diversity and inclusion in shades and sizing set new industry standards.
- Eileen Fisher created a clothing line focusing on simple, timeless designs using sustainable and ethically sourced materials. Her brand appeals to consumers looking for long-lasting, eco-friendly wardrobe essentials.
Remember, in the end, it’s not just about following the fashion trends; it’s about making them follow you.
4. Choose a business model, crunch the numbers, and write a business plan
Embarking on a fashion venture involves far more than having a keen eye for style. The fashion world shares considerable common ground with the world of business.
Setting up a clothing line involves many of the same steps as launching any business.
You must consider factors like startup costs, seeking capital, sourcing external assistance for legal, financial, production, and distribution matters, and determining where and how to manufacture your garments. Let’s delve into these details.
Deciding your business model
This guide focuses on those keen on creating their unique clothing brand and collections. However, if you’re drawn to the fashion industry but lack interest or skills in design, other viable options include reselling by purchasing wholesale or exploring dropshipping .
If you’re designing a clothing line from the ground up, this is the stage where you decide the nature of the business you want to establish. This choice will inform your required time, effort, and initial funding.
Here are ten business models you could consider for a clothing business:
Bespoke or made-to-order business model.
This involves creating unique, custom-made clothing for individual clients.
- Higher profit margins due to premium pricing.
- Enhanced customer satisfaction as products are tailored to individual tastes.
- Minimal waste and lower inventory costs.
- Time-consuming production process.
- Requires skilled labor, often more expensive.
- High customer acquisition costs.
Most suitable for: High-end clothing businesses focusing on luxury items or occasion wear.
Print-on-demand (POD) business model
You design the graphics, and a third-party prints your design onto their products as orders come in. For example, these custom apparel companies will print t-shirts and other products on demand .
Your custom patterns or prints are applied to the appropriate garment and shipped out to your customers as the orders come in. So, you do not need to store inventory or manage fulfillment.
It’s one of the most effortless fashion business models to set up, but it also yields some of the lowest revenue since much of your profit goes to the third party fulfilling your orders.
- Typically, no setup costs or low setup costs
- High-quality prints (if you pick one of the top vendors)
- Unlimited color options (but remember that price increases with the number of colors)
- Ideal for small order quantities or one-off prints
- Many different clothing options (shirts, t-shirts, hats, jackets, leggings, socks, dresses, etc.)
- Not cost-effective for large quantities
- Few vendors offer volume discounts
- Minimal print product selection (you’re limited to what the vendor provides)
- Sparse finishing options (tags, labels, packaging, etc.)
- Longer shipping times.
- Limited control over product quality.
Most suitable for: Online businesses with unique designs or slogans, especially startups and small operations.
Private label business model (also known as a cut-and-sew business model)
You design the clothes and hire manufacturers to produce them in bulk.
- Control over the design, quality, pricing, and branding.
- Higher profit potential.
- Builds brand recognition.
- Requires significant capital investment.
- Risk of unsold inventory.
- Dependence on manufacturers’ reliability and quality control.
Most suitable for: Brands with unique product designs that are popular and have a high sales volume.
Dropshipping business model
You sell the manufacturer’s products on your website, and they handle inventory and shipping.
- Low startup costs and risk.
- No need for inventory management or storage.
- Wide range of products to sell.
- Low profit margins.
- No control over stock levels or shipping times.
- Difficult to establish a unique brand.
Most suitable for: Entrepreneurs who want to test the market without significant investment or have strong marketing skills but less capital.
Wholesale business model
You design and produce clothing in large quantities to sell to retailers.
- Large, upfront orders.
- The brand gets exposure through established retail outlets.
- Reliable revenue streams.
- Lower profit margins.
- Dependence on retailer relationships.
- High production costs and potential for unsold stock.
Most suitable for: Well-established brands with high production capacity.
Custom wholesale business model
Custom wholesale businesses purchase pre-made wholesale garments and then customize the clothing by hand. You can print, applique, embroider, or otherwise embellish the existing garments to fit your vision.
This model requires some time and financial investment. You’ll need to purchase the garments upfront and pay for the materials and labor to customize them. You’ll also need to store inventory and fulfill your orders.
- Very cost-effective in large production runs
- Most vendors offer substantial volume discounts
- Lower costs mean more significant margins for you
- Not cost-effective for big clothing lines with different items, colors , and sizes
- Limited to simple images and designs (for example, you can’t print photographs)
- Minimum orders typically require 10 to 25 units per color/size
- You’ll need to figure out how to manage inventory and shipping – the vendor will not do this for you.
Most suitable for: Well-established brands with lower production capacity.
Direct-to-consumer business model
You design, produce, and sell clothing directly from your online or brick-and-mortar store.
- Higher profit margins.
- Complete control over the brand image and customer experience.
- Direct feedback from customers.
- Requires significant investment in marketing.
- Managing all business aspects can be time-consuming.
- Logistics and customer service can be challenging.
Most suitable for: Brands with a strong, unique selling proposition and the ability to create a compelling customer experience .
Subscription box business model
Customers subscribe to receive a box of clothing items at regular intervals.
- Predictable and recurring revenue.
- Encourages customer loyalty.
- Opportunity for up-selling and cross-selling.
- Can be logistically complex to manage.
- Difficult to ensure each box satisfies all customers.
Most suitable for: Niche clothing brands with a target market that enjoys novelty and convenience.
Custom couture business model
Custom couture may be the riskiest fashion business model. Couture garments are handmade to fit each client. This level of detail is time/labor-intensive and expensive to execute.
This means that each piece will come with a very high price tag – the kind that is only accessible to the wealthy. This limits your potential customer pool.
However, if your designs catch the eye of wealthy clientele, your business could skyrocket.
- 100% custom product
- Tremendous perceived value from affluent customers
- Biggest margins
- Much smaller target market
- Requires you to have a strong brand
- It can take years to gain credibility as a couture brand
Most suitable for: Niche clothing brands with a target market that enjoys couture clothing.
Consignment business model
You stock your products in established stores and only pay the store owner once your products sell.
- Reduced financial risk as you only pay for sales made.
- Your products gain visibility in physical stores.
- Opportunity to build relationships with retailers.
- Little control over sales or presentation of your products.
- Risk of not being paid if the retailer encounters financial trouble.
Most suitable for: Startups and small-scale designers who are just entering the market.
Licensing business model
You allow other companies to use your designs or brand name for their products.
- Provides a passive income stream.
- Broadens brand exposure.
- Low risk as licensees handle production and sales.
- Less control over product quality.
- Potential harm to the brand image if the licensee’s product is poor quality.
- Legal costs and complications in securing licensing agreements.
Most suitable for: Established brands with a strong market presence and popularity.
Pop-up shop business model
You sell your clothing in temporary retail spaces.
- Lower costs compared to permanent retail spaces.
- Opportunity to interact directly with customers.
- Creates a sense of urgency to buy due to its temporary nature.
- Finding suitable locations can be challenging.
- Temporary nature may not provide a consistent income.
- Limited footfall compared to established retail locations.
Most suitable for: Online businesses looking to test a physical retail experience or for new launches and exclusive collections.
Estimating the cost of starting a clothing line
Once you have a concrete idea for your clothing line, you might be able to fund it yourself, incrementally investing as you progress.
Designing and sewing made-to-order clothing on your own eliminates the need for maintaining a substantial inventory. However, upfront investment in equipment and bulk fabric purchases would be required to make the venture cost-effective. Other expenses include shipping materials, website launch fees, and a marketing budget.
If you plan to collaborate with manufacturers for production, you’ll encounter high upfront costs to meet minimum order quantities. A robust business plan and detailed costing exercise will aid in determining the necessary funding.
In either scenario, anticipate needing thousands of dollars upfront.
When you start your own clothing line business, your startup costs will include the following:
- your fashion brand design (logo, business cards, and website)
- any license or permit fees
- deposits and rent for a physical work location if you plan to lease your workspace
- basic infrastructural costs like phone and internet service, invoicing software, etc…
- marketing and advertising costs
- sewing or design tools (sewing machines, scissors, rulers, pattern makers, fabric printing accessories, t-shirt templates, etc.)
- materials for your first clothing line collection (fabrics, notions, and embellishment decor)
- hourly wages to cover your design and construction time
If you plan to hire any employees, you’ll also want to budget their wages into your startup calculations. After all, a successful clothing line means that you’ll earn a profit after all expenses.
Once you know how much it will cost to get started with your fashion brand, compare that with the funds you have. Then plan how you’ll make up any difference. (See section 9 below to learn how to find a partner or investors.)
If you’re starting a Cut-and-Sew line, you’ll need to calculate how many yards of fabric are required to make your garments so that you can buy enough but not too much. If you plan to work with pre-made wholesale clothes , you’ll want to shop for the best prices at your quality point to hit your target price point.
Running smart calculations to determine how much it will cost to create your clothing line collection and the clothing items in that collection will allow you to plan and think about pricing.
Choosing your business structure
A critical step in establishing a clothing line is determining the business type .
You have options such as sole proprietorship, LLC, incorporation , or partnership . Consulting with a business attorney can provide insights tailored to your specific situation.
A sole proprietorship is the simplest form of business structure. In this case, you have complete business ownership and bear full responsibility for its assets and liabilities. If your venture is just taking off, this could be an appropriate choice due to its ease of setup.
For more protection, consider an LLC (Limited Liability Company) , which offers limited liability features in a corporation.
We discuss these structures, including the pros and cons of each, in great detail in our definitive guide on how to start a business .
Hire an expert to form your company and save time. Our trusted partners can help: Northwest ($39 + state fee) or Bizee ($199 + state fee) . We recommend Northwest. After evaluating the leading registration companies, Northwest stands out as our top choice due to its competitive pricing, exceptional customer support, and commitment to privacy. Pay just $39 + state fees and you'll get a free year of registered agent service, articles of organization, privacy, and client support from local experts.
After deciding on the structure, you must complete the necessary paperwork, including securing relevant licenses or permits.
In most states, a registered business must operate under its legal name. For example, if your LLC is named ‘Chic Designs, LLC’ but wants to sell under the name ‘Urban Threads,’ you must file a “doing business as” (DBA) certificate to register this trade name. This ensures you can legally operate under a name different from your registered business name. You can find comprehensive resources for DBA state requirements and filing guidelines online.
If you need assistance finding an ideal business or DBA name for your clothing business, consider using a clothing business name generator . These online tools can provide unique and fitting name suggestions for your brand.
Other important legal considerations
The hiring experts at Indeed recommend that you:
Get an Employer Identification Number (EIN) by applying on the IRS website (you’ll get your number immediately after applying!). Register with your state’s labor department. Fill out paperwork to withhold federal taxes from your employee’s wages. Set up workers compensation insurance if it is required in your state.
Hiring employees is a crucial step toward business growth but requires careful budgeting. Prioritize roles that will yield immediate benefits, focusing on areas that pose challenges or lack expertise.
Consider these options:
- Part-time assistant. A versatile, eager learner can offer valuable support. Knowing someone reliable is working alongside you can provide peace of mind.
- Marketing manager. If marketing isn’t your forte, an expert can help devise effective strategies.
- Manufacturing liaison. Understanding the manufacturing process is crucial – hire a specialist if this isn’t your area of expertise.
- Fulfillment manager. If managing orders is overwhelming, a fulfillment manager can help streamline processes. Alternatively, you can outsource fulfillment to a 3PL service provider .
Deciding between full-time and part-time employees depends on your budget and needs. Initially, part-timers may be more affordable and require less paperwork. As your business expands, consider increasing hours.
Writing your business plan
A business plan is your entrepreneurial roadmap, guiding you to your goals. It’s crucial for securing investors and managing finances. Here’s how to craft an effective plan:
- Executive summary. Think of this as your company’s trailer, providing a brief but exciting overview of your goals and strategies. Though it’s the first thing readers see, it’s usually written last.
- Company story. Share your business’s origin story, explaining how your product or service solves problems, what makes your idea unique, and how your background prepares you to succeed. For instance, a marine biologist might leverage their expertise to create sustainable swimwear.
- Market analysis. This section outlines the competition, target audience , market trends, growth rates, and your business’s position in the market.
- Team & structure. Detail your team’s structure, business organization, risk management strategies, and qualifications.
- Mission & goals. Define your mission statement and SMART (specific, measurable, achievable, relevant, time-bound) goals, explaining how you’ll achieve them.
- Offerings. Describe what you’re selling, how it compares to competitors, the associated costs, sourcing methods, and product lifecycle.
- Background summary. Include a comprehensive overview of data, articles, and research studies showing trends that affect your business or industry.
- Business model. Outline how your business model can accommodate growth without significantly increasing costs, whether you’re considering subscriptions, digital products, or franchising.
- Marketing strategy. Detail your marketing plans , including a budget, campaign duration, and findings from your SWOT and competitor analyses .
- Financial plan. Provide your proposed budget, projected financial statements, and funding requests, demonstrating financial competence to potential investors.
- Exit strategy. An essential part of any plan, the exit strategy explains how you’ll maximize the business value when it’s time to sell.
- How to Write a Business Plan
- How to Hire Employees
5. Find partners or investors
Every new startup grapples with securing sufficient capital for sustainable growth. While self-financing would be ideal, most entrepreneurs require external assistance. This is where business partners or investors can prove invaluable.
Before proceeding, clarify your objectives:
Determine your expectations – are you looking for financial investment, leads, shared costs, or association with a renowned brand? Establish these goals before approaching any potential collaborators.
Identify the right type of relationship
Options for securing funds have evolved beyond traditional angel investors and venture capitalists. There are many small business finance loan options, for example.
Consider alternative channels like the following:
Crowdfunding. Platforms like Kickstarter and Indiegogo provide a means to generate capital without surrendering influence over your business. For instance, the fashion brand ‘Minaal’ successfully raised over $300,000 for their line of travel gear on Kickstarter.
Angel Investors and Venture Capitalists. These traditional routes require compelling evidence of your business’s potential profitability. Present a detailed business plan and be prepared for investors seeking substantial involvement in business operations. You’ll need to demonstrate that your clothing business has all the trappings of a successful business .
Partnerships. Collaborating with established brands, boutiques, or retailers can drive mutual growth. For example, a local retailer can host a charity event during the holiday season to generate brand exposure. Or you can partner with a complementary clothing brand for a pop-up store to drive sales during slower revenue periods. Remember, the success of partnerships depends on shared goals and complementary brand identities.
- 7 Things Investors Are Looking for in a Business Plan
- How to Make a Winning Pitch Deck for Startup Fundraising
6. Design your clothing line
Before considering the details of your first season’s designs, you must decide what clothing line you’ll offer.
Choose your niche
Before the fashion sketches take form and the sewing machine starts humming, you must pinpoint your brand’s fashion identity.
Ask yourself, what sort of apparel will you be creating? Is your label about sporty chic or vintage-inspired intimates? Is it going to be a men’s line, women’s, or perhaps, gender-neutral?
Remember, it’s nearly impossible (and pricey) to cater to everyone’s taste and style. You have a better shot at success if you create specific products for a particular audience.
Figure out early who your target demographic is and what core products will form the heart of your clothing line.
To give you a head start, here are a few niches you could explore:
– Athleisure – Women’s Formalwear – Men’s Formalwear – Women’s Casualwear – Men’s Casualwear – Swimwear – Sleepwear – Intimates
Within these niches, you have many clothing items to choose from, like:
– Tees (short and long-sleeved) – Trousers – Leggings – Hoodies – Dresses – Lingerie – Underwear – Socks – Ties – Belts
Whichever niche you choose to dive into, make sure it’s one you’re passionate about. Your passion will seep into your designs, and your audience will resonate with the authenticity of your clothing brand.
Sketch your first collection
Once you’ve picked your business model and niche, it’s time to breathe life into your ideas and start designing your first clothing line.
Your debut collection should encapsulate your brand’s ethos and showcase your unique design sensibilities. So, don’t stop referring back to your brand concept for inspiration.
Your design journey may take you on various paths later, but your first collection should give your audience a taste of what they can consistently expect from your label.
We can’t sketch out your designs for you – that’s your creative genius at play. But we can encourage you to stay true to your aesthetic.
And don’t be scared to embrace your uniqueness.
Being authentic and different will help your clothing brand stand out in the bustling fashion crowd.
But remember to maintain a cohesive brand theme across all your collections. Brand architecture is important to build customer loyalty and brand equity.
And if you have little or no experience as a clothing designer, check local community colleges for practical classes or learn through MasterClass (Marc Jacobs, the CFDA Womenswear Designer of the Year winner, has a terrific fashion design course there), Maker’s Row Academy , or Udemy .
Creating collections that captivate, regardless of the season
The fashion industry traditionally moves to the rhythm of the seasonal cycle, with Fall/Winter and Spring/Summer as its key beats. This implies that creating a new collection should commence a year or even more in advance, in alignment with each season.
Stay ahead of the game by having your collection ready for the next season at least six to eight months in advance. If your business model involves wholesale, remember that buyers want to preview your collection a month before fashion week.
But don’t let the concept of ‘seasonality’ rigidly define your collections. Focus on designs that defy seasonal norms, creating prints that maintain their allure regardless of the time of year.
A fitting example is KOTN, which has successfully built its identity around high-quality, sustainable basics, selling core items alongside its seasonal releases.
7. Establish clothing production and manufacturing
Unless you personally plan to sew every garment you sell (a business model that would be impossible to scale), you’ll need to consider how your collection will be manufactured.
In the initial stages of your business, you might not be producing high volumes that necessitate external help. This makes some of the clothing business models we listed above more challenging.
However, as your business expands, a manufacturing partner can alleviate some of your workloads, allowing you to focus on other business aspects and design.
Some exceptions do exist. If the handmade aspect of your creations is an integral part of your brand, you’ll always be involved in the production, even as you scale. Yet, growth generally implies outsourcing at least a portion of the work.
Here are ten different ways you can manufacture your clothing designs:
- One-of-a-kind and handmade by you. This method involves you designing and sewing all garments yourself. For example, a jewelry designer might handcraft each piece sold, making each item unique. A business like Yuliya Magdych, a Ukrainian brand, creates one-of-a-kind embroidered dresses that reflect traditional craftsmanship.
- P roduced by hired staff or freelance sewers in-house. Here, you hire a team of seamstresses or tailors to sew your designs in-house, maintaining control over the production process. For example, a business like Gamine Workwear creates in-house products to ensure quality and authenticity.
- Manufactured in your commercial production facility. This involves owning or renting a production facility where you can produce larger volumes of clothing. For example, American Giant owns its manufacturing facilities in the USA to maintain control over its supply chain and product quality.
- Outsourced to a local factory. In this case, you partner with a local manufacturing plant to produce your designs. For instance, Reformation, a sustainable fashion brand, outsources production to local factories in Los Angeles and ensures ethical practices.
- Produced at an overseas factory. Here, you might work with a factory overseas where production costs could be lower. Many larger companies like H&M and Zara utilize overseas production facilities.
- Dropshipping model. With this method, you work with a manufacturer who produces your designs and ships them directly to the customer when orders come in, like Printful or Printify . This model works well for graphic tee businesses or customized clothing lines.
- Print-On-Demand. This is similar to dropshipping but specific to printed designs. The item is printed and shipped to the customer when an order is made. This is useful for businesses selling t-shirts with unique prints or designs.
- Artisan or co-operative production. This model involves partnering with artisan groups or cooperatives to produce your clothing, often supporting traditional crafts and sustainable livelihoods. Companies like Ten Thousand Villages or Mata Traders use this method, supporting artisans worldwide.
- Fairtrade manufacturing. This model ensures ethical working conditions and fair pay for workers. A company like Patagonia, which places a high priority on ethical manufacturing, often uses this model.
- Sustainable or eco-friendly production. In this model, you use environmentally friendly materials and processes to manufacture your clothing. For example, Eileen Fisher, a women’s clothing brand, uses organic and recycled materials and prioritizes sustainability throughout their supply chain.
Partnering with a manufacturer
When you reach out to a manufacturer for the first time, they will have questions you should be equipped to answer. If you take the time to establish your budget, understand the production timeline, understand the manufacturing process, and know your designs inside and out, then you’ll be ready for them.
When you finally meet potential manufacturers, put your most professional foot forward. Jennifer Philbrook, the co-founder at Stitch Method, suggests :
Look at this meeting as a partner meeting and walk in with a smile! Not only are you looking to see if this factory is a good fit for your brand, but they are looking to see if your brand is a good fit for them! You don’t want to assume they automatically want to work on your project.
Of course, walking into that meeting prepared will go a long way toward convincing a manufacturer that you are a worthwhile prospect. Having worked on the clothing industry’s design and production side, I can tell you that manufacturers love a designer who knows their business.
On the same token, nothing is more annoying to a supplier or manufacturer than a designer with lots of ideas and no understanding of the manufacturing process by which those ideas are made real.
Look for a clothing manufacturer that has a fashion designer on staff. That could give you a competitive advantage because an experienced fashion designer can anticipate problems you might not notice when you share your tech pack (a blueprint for your designs), especially if you’re new to the clothing industry and just starting your clothing brand.
If you can, visit the manufacturing facility to observe the scale, employees, and manufacturing process. If you can’t visit a facility in person, ask for a short video that can help you to understand your potential manufacturing partner better.
Before committing to a full-scale run, order a few samples from several manufacturers to evaluate the quality, adherence to the manufacturing process they claim to have, and their work speed. For example, if you’re screen printing on your clothing, examine the quality of the print. Examine the labels to make sure they contain the information you require.
Once you’ve evaluated your options and reviewed samples, choose the manufacturer that will serve your business best.
Questions to ask manufacturing partners
Here are ten questions that you should ask when choosing a production method and manufacturing partner:
- What are your brand’s mission and values? This is the most crucial question, setting the tone for all your other decisions. Your choice of production method should align with your brand’s values.
- Do you plan to scale? Your long-term goals for your business will significantly affect your choice of manufacturing. Consider if you plan to remain a small, artisan brand or aim to grow and expand your business.
- How large are your production runs? This will help determine whether you can handle production in-house or if you need to outsource to handle larger volumes.
- What is your budget? You need to know how much you can afford to spend on production. This can help decide between options like overseas production, which might be cheaper, versus local production, which might be more expensive but allows for more control.
- Is “made in America” or “made locally” important? Some businesses prioritize local manufacturing for its benefits to the local economy or for its control over the production process.
- Are you more concerned with ethical manufacturing or the lowest cost? This is about where your priorities lie. If ethical manufacturing is a cornerstone of your brand, you’ll want to ensure your manufacturing processes align with these values.
- How hands-on do you want to be in the production? Some business owners prefer to be involved in every step of the process, while others may focus on other business aspects.
- What level of quality do you want to maintain in your products? Higher quality often requires more expensive production methods, so balancing your quality standards with your budget is essential.
- Do you have any specific material or production requirements? For example, if your brand is focused on sustainability, you must ensure your manufacturing processes align with this commitment.
- What is your timeline for production? This can impact whether you manufacture locally (which may be faster but more expensive) or overseas (which might be cheaper but take longer due to shipping and customs).
8. Set your pricing
Creating a robust pricing strategy for your clothing line involves understanding your cost-per-unit (CPU) and incorporating other business costs to ensure profitability. Here’s how to go about it:
- Determine CPU. As a starting point, find out how much it costs to produce each clothing item. Businesses in the apparel industry typically use a cost-based pricing strategy. For instance, if it costs you $30 to make a t-shirt (including material, labor, etc.), this is your CPU.
- Include business costs. You must also account for the cost of running your business (utilities, rent, salaries, etc.) in your clothing prices to sustain your business over time. Let’s say your monthly business costs are $5000, and you plan to sell 500 t-shirts a month, you’d add $10 ($5000/500) to your CPU, making it $40.
- Consider profit margin. Marking up prices at least 30%-50% above expenses to ensure profit. So, if you add a 50% markup to the $40 CPU, the final price would be $60.
- Analyze competitors and the market. Be aware of the pricing trends in your market and what your competitors charge. This helps set a competitive price point that resonates with your target market. If similar t-shirts are priced around $50-$70, your $60 t-shirt is competitively priced.
- Evaluate perceived value. This is how much a customer believes a product is worth. Factors contributing to this include your product’s appearance, quality, branding, and competitors’ prices. If your t-shirt uses high-quality fabric and has unique designs with excellent branding, customers might perceive its value to be higher.
For more pricing and clothing line financial planning information, check out this online mini-course by Indie Source.
- Pricing Strategies: Proven and Effective Strategies and Discounts That Attract More Customers
9. Launch your line: approaching fashion retailers
Choosing the proper sales channels for your clothing line is crucial as it influences many future decisions, such as promotional strategies.
Online selling, your physical store, or featuring your collection in local boutiques are all valid options. Each choice has advantages and disadvantages, and the most suitable option will depend on factors such as your brand, target market, and financial resources.
On the other hand, if you are more inclined towards selling in a physical store, starting with established boutiques before opening your store can be a wise financial decision.
This approach allows you to access established payment systems and postpones the need for finding and financing a physical location. However, choosing boutiques that align with your brand identity and cater to your target audience is vital. For instance, if your line features biker leathers for motorcycle enthusiasts, a boutique known for yoga wear might not be the best fit.
In the fashion industry, there are primarily two methods through which you can distribute your clothing line to other retailers:
This mode of operation is a mutual win for both you and the retailer. It facilitates the exposure of your clothing line in a physical store with no upfront financial risk to the retailer.
Take, for instance, a new designer entering the industry. By placing their items in a boutique on consignment, they can attract potential customers who may not yet be familiar with their brand, thereby broadening their reach and customer base.
However, the drawback of this approach lies in its payment scheme. As the designer, you will only receive payment when an item is sold. If a piece doesn’t sell, it may be returned to you without any profit made.
This method entails retailers buying a certain quantity of your items upfront at a wholesale price. This price is usually significantly less than your retail price, providing the retailer with room for markup and profit.
To illustrate, consider an established fashion brand selling its newest collection to a department store. The department store purchases the collection in bulk at wholesale prices, enabling the store to manage the retail pricing and earn profit margins. This approach is more risky for retailers as they invest upfront without guaranteed sales. Therefore, you might need to build your reputation and demonstrate market demand through consignment before a retailer is willing to engage in wholesale agreements. This is especially true for emerging designers or new fashion lines where demand is still being established.
Stitch Method’s Philbrook shared this advice on selling wholesale to boutiques:
If you plan on selling wholesale to boutiques it is important that you have merchandise ready to sell during the correct buying season… You need to figure out when you need to have production ready to ship to stores or customers and then work backwards from there through the development stages (leave enough time!) to make sure that you are working on the correct season.
Pro Tip: Always schedule your meetings with boutiques in advance. Customers always come first in retail, so cold calls and drop-ins are terrible.
10. Build your online store
Your website is one of your clothing line’s most important ambassadors. So, put this vital business tool to work for your clothing line.
A professional online store performs two functions:
- It provides a platform to sell directly to your potential customers.
- It is a dynamic lookbook you can present to buyers and media.
Start by ensuring that your website design truly embodies your brand. Visitors should understand who you are and what your fashion brand is about as soon as they arrive.
Your website’s visual design and marketing copy should project your brand’s voice and identity. Here are some suggestions:
- Use your brand’s colors.
- Prominently feature your logo.
- Write marketing copy with your target audience in mind.
- Use complementary font combinations .
- And showcase your fashion design aesthetic.
Besides serving as a brand ambassador, your business website is also an excellent venue for showing off your clothing designs to a broad audience.
Establishing your online store
Most template-based web design services offer some form of e-commerce platform functionality that lets you quickly launch an online store and execute your DTC growth strategy . And some, like the Shopify eCommerce platform and Pixpa Fashion Store , are built specifically for e-commerce. Among other features, these platforms will let customers pay by credit card (you won’t need to get a particular merchant account because the platform will already provide this functionality).
However, it’s essential to bear in mind that maintaining your unique branding is critical to standing out in the competitive fashion industry. Using a common template for your online store could detract from your brand’s distinctiveness. Therefore, it may be beneficial to consider self-hosted e-commerce services like WooCommerce, Magento, or Open Cart, which allow you to have a bespoke web design.
Making your website more presentable is a great way to attract more visitors and grow your online presence. Adding short brand videos to your site makes it easier for potential customers to learn more about the company and its products. This will also help build trust and credibility with potential customers, leading to more future sales.
You can make a video online and edit it with more graphics and animation to look attractive and add it to your website for a more engaging experience for visitors. You can use your garments’ picutres and build video collages, even if you don’t have video content.
Consider sharing an online lookbook featuring your fashions and traditional product shots. This will allow your audience to see the styles in action, provide inspiration, and enable customers to relate to your designs.
If your lookbook resonates with a visitor, the chances are that they’ll purchase your items – or, at least, wish they could. A fully custom design is the best way to get a unique website. But if your budget is limited, you can also work with WordPress themes and modify those to suit your unique brand.
To effectively reach your target audience, don’t overlook the potential of online channels such as Instagram and Facebook Shops. These platforms offer built-in communities and potential customers who can instantly interact with your brand.
Similarly, your clothing line could be an excellent match for online marketplaces like Etsy, which cater to a large demographic seeking unique and handmade products.
You can also create a unique shopping app. With a custom app, you’re offering more than just another buying option; you’re giving your brand a direct, personal, and convenient way to engage with your customers. Here’s a guide to help you learn how to create a shopping app , ensuring you stay competitive and meet the evolving shopping needs. Keep it innovative, stay connected, and align your brand with modern expectations.
Invest in professional photo shoots
Investing in professional photo shoots can significantly enhance your brand’s visual appeal when presenting your clothing line.
You might be tempted to take these yourself if you’re just starting. But blurry or poorly lit photos can work against you. So, if you can afford it, hire a professional photographer to ensure excellent results.
These images will be used on your website, social media marketing, and advertisements. So, keep your brand and target customers in mind and style them accordingly.
But most importantly, make sure your styles are the stars of the photos – simplicity is vital to keep accessories and background elements to a minimum.
However, if you are operating on a tighter budget, consider utilizing a simple lighting kit, a DSLR camera, or even a smartphone, along with some industry insider tricks to yield professional-grade DIY shots.
Remember, capturing the nuances of your clothing line – like the fabric texture, trims, and closures – is vital to conveying the quality of your products. And don’t worry if the image background isn’t perfect. You can use a simple background remover tool and place the image on a new background.
Moreover, conducting a lifestyle shoot can produce various content, including material for your website, marketing campaigns, press kits, and lookbooks. By presenting your clothing on models, you can demonstrate the drape of the garments and offer valuable styling tips to your customers.
Make it easy for visitors to see what your clothing brand is all about by featuring those fabulous photos of your line in a Facebook album .
For instance, if your clothing line is vibrant and bohemian, featuring your clothing on models in a colorful, outdoor setting will resonate with your target audience. Or, if your clothing line is minimalistic and modern, a clean, well-lit studio shoot could better convey your brand’s ethos.
- 10 Essential Elements of Modern Web Design (And Web Design Trends You Should Know)
- Psychology in eCommerce Web Design: How to Increase Sales
11. Market your clothing line
Marketing and driving sales are the most common challenges for online brands across all industries.
The fashion market is highly saturated, so having a strong brand with a unique value proposition can help you focus your efforts on your ideal customer instead of wasting resources.
While you may begin with a modest budget, several innovative and organic fashion marketing strategies can be used to grab attention:
- Invest in content marketing. Create high-quality content tailored to your audience’s interests. For example, if you’re launching a vintage clothing line, you might create a video showcasing how to style vintage pieces or blog posts on the history of vintage fashion trends. SEO-optimized content will drive more organic traffic to your website.
- Pre-launch email list building. Begin gathering an audience even before you launch by building an email list . Promote your upcoming clothing line on social media and encourage email sign-ups by offering early-bird discounts or exclusive sneak peeks through a welcome email . For example, ‘EcoFit’ offered a 20% discount code for signing up pre-launch.
- Collaborate with complementary brands. Partner with businesses in related fields for joint ventures. For instance, if you’re starting a swimwear line, collaborate with a sunscreen brand for a photoshoot. This helps expand your audience and boosts exposure.
- Influencer marketing. Work with influencers who align with your brand ethos. For instance, ‘EcoFit’ partnered with fitness influencers on Instagram who promote sustainable living, enhancing brand reach and credibility.
- Paid advertising. As your budget grows, consider investing in paid ads on platforms like Facebook , Instagram, or Google. These platforms provide targeted advertising capabilities that can increase your brand’s visibility. For example, ‘EcoFit’ ran Instagram ads targeting users interested in fitness and sustainability.
- Hire a PR Firm. A PR firm can help get your brand featured in the media, increasing your reach and credibility. For example, when ‘EcoFit’ launched its new collection, it hired a PR firm that secured them a feature in a popular fitness magazine.
- Do PR yourself. Apart from using e-commerce marketing tools , a great way to get started is to compile a list of local fashion editors and media outlets (radio, television, and online blogs). When you are ready to launch your clothing brand or line, you can notify these resources via press release. Take it one step further by creating an entire press kit. Check out this article from PR Couture to learn how.
- Participate in fashion events. Showcasing your collection in local fashion shows or smaller Fashion Week events can boost brand visibility. ‘EcoFit’ showcased their line at a local eco-friendly fashion show, gaining substantial media attention.
- Utilize social media platforms. Harness the power of different social media platforms for your business. Instagram is great for visual promotion, Twitter can be used for customer engagement, and Pinterest can drive significant traffic to your online store.
- Offer limited-time promotions. Regularly offering discounts or sales can pique customer interest and encourage purchases. For example, ‘EcoFit’ offers a ‘Deal of the Week,’ creating a sense of urgency and boosting sales.
- Sponsorship or partnership with events. Partner with local or relevant events that align with your brand. This could be anything from a music festival to a charity run. Sponsorship can create a positive association for your brand and attract potential customers. For instance, ‘EcoFit’ sponsored a local eco-friendly marathon, increasing brand visibility among their target audience.
- The Definitive Content Marketing Guide
- Social Media Marketing: The Ultimate Small Business Guide
Before you hit the catwalk
Venturing into the fashion world by launching your clothing line is thrilling and rewarding.
It may be intricate, demanding, and sometimes overwhelming, but success is more than achievable with a clear vision, diligent planning, and unrelenting passion.
Remember, a successful clothing brand involves great designs, strategic marketing, efficient production, a strong web presence, and beneficial partnerships. So take a step forward, let your creativity run wild, and create a fashion brand that’s uniquely yours.
Frequently asked questions (FAQs) on starting a clothing brand:
What is the first step in launching a clothing line.
Begin with a unique concept and identify your target audience. This will aid in creating a brand that stands out. For instance, entrepreneur Maria launched her clothing line EcoFit, targeting fitness enthusiasts looking for eco-friendly activewear.
What licenses are required to start a clothing line?
Depending on your location, you'll need various licenses, including a permit to sell and collect tax and an apparel registration certificate. For example, EcoFit had to register as an LLC and obtain business insurance in Portland.
What are the costs involved in starting a clothing line?
Costs vary but include materials, labor, shipping, rent, and equipment. Ongoing costs such as website maintenance and marketing should also be considered. For instance, Maria's initial investment in EcoFit was around $5000.
How should I name my clothing brand?
Your company name is an essential part of your brand identity. In the fashion industry, it can make or break a clothing line. You can use your name, which is common in the fashion industry. Or you can get help from naming professionals to develop a unique and powerful business name .
Can I put my label on wholesale clothing?
If the wholesaler's policies permit, you can add your branded tags to wholesale clothing. This is known as private labeling. EcoFit, for instance, sourced wholesale activewear, added their brand tags, and resold them under their brand name.
What is a reasonable number of designs to start a clothing line?
Starting with ten to twelve different styles gives your customers a good variety. Each style should ideally have multiple pieces. EcoFit initially launched with ten styles, each available in three different colors.
How to determine the price for clothing manufacturing?
The cost varies based on the complexity of the design and the materials used. For example, a simple t-shirt might cost $5.50 per unit, while a long sleeve sweater could cost up to $75 per unit.
What factors should be considered when pricing clothing items?
Consider manufacturing cost, business overhead, target market, and competitor prices. EcoFit, for instance, priced their items at a 40% markup from the manufacturing cost, keeping them competitive yet profitable.
What's the best way to sell my clothing line?
Multiple channels can be used, including an online store, pop-up shops, local markets, or wholesale to other retailers. EcoFit started selling online before moving into pop-up shops and local fitness events.
What is the importance of branding in a clothing line?
Branding differentiates your clothing line in a crowded market and creates a connection with customers. EcoFit's branding focused on sustainability and fitness, attracting eco-conscious fitness enthusiasts.
How important is a business plan for a clothing line?
A well-drafted business plan outlines your vision, target market, marketing strategy, and financial projections. It helped EcoFit secure investment and guided their strategic decisions.
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