How Much Does It Cost to Start A Clothing Line in 2023
The cost of starting a clothing brand in 2023
In this article, we will break down the costs you can expect to incur when starting a clothing line in 2023. We’ll cover everything you need to know, and summarise what we think is a reasonable cost to start a brand in the current market.
Firstly, it’s important to consider that there are a lot of nuances which will affect the overall cost of starting a clothing line, so there is no “right” number or answer.
That being said, there are some common areas that most brands starting it will incur costs and we can use these categories to further elaborate on general expenses to provide an idea on the overall cost.
These include; design, manufacturing, marketing, warehousing, legal and general business expenses.
Design and development
When considering designing for a brand, there are really two routes you can go:
- You hire an in-house designer to assist with the creative process
- You outsource this process, or hire freelancers to assist
Most start-ups will go down the second route. The reason for this is because hiring in-house staff is expensive and running a payroll has more costs than just the salary (i.e. national insurance contributions, pension contributions, insurance, PAYE and so on)
Second to which, when starting out, you probably won’t have enough demand, cashflow or work to keep a full-time, payroll designer busy. For this reason, we’re going to focus on the average cost of outsourcing design.
The actual cost of designing for a clothing line will really depend on the number of styles you’re producing.
That being said, if we look at the below price list from White2Label Manufacturing, who offer competitive UK based fashion design work and assume you start with 5 styles, we can see the cost of design would be:
£720 - £1,000
However, there are ways you can cut some costs during the design phase - the first being doing some of the design work yourself.
Articles like The Ultimate Guide to Tech Packs In Clothing (2022) break down how to build your own tech pack and show real-time-examples of what specification should look like.
Manufacturing is going to be your single biggest cost when starting a clothing line.
That being said, there are multiple different routes a brand can take when it comes to manufacturing. The main ones being
- Print on Demand: This method of manufacturing is where a manufacturer will print a product upon receipt of an order from one of your customers. As a brand, you hold no inventory and only pay the supplier once the sale has been made.
- White Label Clothing: This method of manufacturing is where a supplier will use pre-made garments and customise these to meet your branding requirements. This method of production often carries lower MOQs than a bespoke service, so overall spend is likely to be less than that of a custom clothing manufacturer service.
- Bespoke Manufacturing: This is where a clothing manufacturer will create custom pieces, tailored towards your brand's specifications. This method of production usually carries higher MOQs and longer turnaround times.
The main differences between the three methods of clothing manufacturing listed above is the cost associated with bringing a brand to market using any of these methods.
For example, brands utilising a print on demand service might incur no physical overhead, or production costs other than those associated with sampling.
Brands utilising a white label clothing service will have costs associated with sampling and production, but the costs might be lower than those with a bespoke service due to the lower MOQs and therefore, overall spend.
Lastly, brands using a bespoke manufacturing service will likely incur the highest costs due to higher minimums and therefore, overall spend. They’ll also have more associated costs like design, sampling, trims and hardware production and so on.
This section of creating a brand can really vary depending on what the collection looks like, how many styles the brand wishes to produce, the market they’re looking to target and the levels of quality they’re looking to achieve.
Therefore, the total cost of production alone can be a big range, within:
£3,000 - £20,000
Marketing and sales
Something to consider in your cost analysis is the cost of building, developing and maintaining a website, as well as the time it takes to build.
Similarly to design, there are one of two ways you can go during this phase; those being:
- Building the website yourself: lower cost, more time
- Having a designer build your website: higher cost, less time
The best route for you and your brand will heavily depend on how much time you have spare to devote to learning the basics of building a website.
It is recommended to at least learn the basics, so you can troubleshoot if required later down the road.
Websites themselves can vary in cost depending on the requirements of the site. However, you can open up a basic shopify plan which costs £19 p/month (billed annually) and this will provide you with the CMS to build your website
After you’ve built out your website and developed your product, the next stage of the process is to decide on your marketing strategy.
Similarly with the above points, there are a couple of ways you can approach this and the two main routes are
- Organic marketing; i.e. marketing that costs you no money to run. Examples include content on social media, giveaways, reels and so on.
- Paid marketing; i.e. routes of marketing you go down which require you to pay to acquire a customer. Examples include Facebook, Instagram, TikTok and YouTube ads.
Organic marketing is the cheaper route for startups and by definition, means you’ll only incur the cost of creating the content in the first place. However, this is a slower method of acquiring customers and due to its lower barrier of entry, is quite competitive.
Paid marketing on the other hand does require some skills and experience. Beyond media buying, you need to do considerable research into winning creative strategies and continue to test new creatives and tailor each to a specific audience, on a specific platform.
This means that although paid marketing is both faster and more scalable in the short term, there is a considerable amount of cost involved to find winning strategies to acquire new customers.
To summarise, the expected cost you can incur for marketing and sales would be anywhere between
£200 - £5,000 (to start - however, there will be recurring costs)
Inventory and warehousing
Earlier on we discussed the cost of manufacturing your inventory, but this is only one part of your operational cost. After it has been manufactured and shipped, you now need to consider the cost of storage, warehousing and fulfilment.
To start off with, most brands usually stock their styles in their houses, apartments and fulfil themselves and whilst this can work for some, it isn’t always the best use of time, resources and money for the owner.
If you’re starting out with a larger stock on hand, or once you reach a certain scale, you may consider using third party logistics businesses (3PLs)
3PLs are storage and fulfilment businesses who specialise in helping e-commerce companies stock, organise and fulfil their stock.
The way this works is that you will send 3PLs all of your stock, they will hold it and merge your ecommerce website with their system. When a customer places an order on your site, they will receive the information and then pick, pack and ship this order for you directly to the customer.
Every 3PL works slightly differently and the cost of outsourcing to a 3PL will vary depending on total amount of stock, number of SKUs, location, average shipment size and so on.
However, starting out your costs of warehousing and fulfilment can be anywhere from
£0 - £500
Legal and business expenses
Last but not least, you’ll have legal, business and miscellaneous expenses when starting your clothing business which should not be overlooked.
This section includes your general costs incurred such as business insurance, accountancy fees, business registration, domain purchasing, gmail setup and so on.
The final cost of these will vary between the following range
£50 - £300
As you can see, there are a lot of costs you might not have fully considered when starting a clothing line. The specific cost of each section will vary depending on the brand you’re trying to build and other factors, but below are the main areas you will incur cost when starting out
- Design and development
- Marketing and sales
- Inventory and warehousing
- Legal and business expenses
Factoring in all of the above, we expect the final cost of starting a clothing brand in 2023 to be between
£4,000 - £25,000
- How profitable is a clothing brand?
Clothing brands generally net anywhere from 4-10% after all costs are considered. It is therefore considered and this is the norm across a lot of industries.
- How much does it cost to start a clothing brand in 2023?
Whilst the final cost can vary, it can cost you anywhere from £4,000 - £25,000 to start a clothing brand in 2023.
- How do I start a clothing brand with little money?
There are many ways you can start a brand little money. This includes
- Friends and family loans
- Pre order systems
- Print on demand
- White label clothing services
- Angel investors
- Small business grants
- Can you start a clothing business with no money?
You can, but it will be very hard. You will need some money to invest into the website, sampling and so on.
- Is it cheaper to make your own clothes in the UK?
Manufacturing in the UK is always going to be more expensive than doing so overseas.