One of the questions I receive almost daily is, how much does it take to launch a fashion brand? The truth is, there is no clear-cut answer to this question. Much of your expenses in starting a label depend on a variety of things, which will ultimately factor into how much money you will need to get your fashion startup up & running.
YOUR BUSINESS GOALS MATTER
This is why you should write a business plan before taking any steps to design a collection. You must decide at the beginning stages, whether you want a small independent label following your own trans-seasonal calendar or become the next “Off White”. Will you launch a made to order business or produce your collection in advance in small quantities? Are you looking to produce in China, or must your products be “Made In America”? Is a brick and mortar store your vision or will your label be focused on e-Commerce only. Will you design your collection or sell second-hand clothing? All of these decisions are a must in order to determine at least a rough estimate of how much funding you will need to get started.
THE TYPE OF BRAND YOU WANT TO BUILD IS IMPORTANT
A T-shirt brand is one of the least expensive ways to enter the fashion game. On the other hand, if you would like to develop a premium brand, a luxury collection or a bespoke label, this is where things begin to get costly. Sourcing your raw materials & prototype creation can cost you hundreds, if not, thousands of dollars. Moreover, your overall expenses of bringing your products to market can cost you thousands of dollars before you’ve even sold your first unit.
DIRECT TO CONSUMER, WHOLESALE OR BOTH?
If you wish to wholesale, especially in department stores, you will in most cases need a minimum number of units to receive buyer consideration. In many cases, department stores & boutiques will only take your products on consignment, this means that you will need to produce goods in advance at your expense and trust stores to sell your items without any guarantees that you will receive your funds, once they have sold your goods. If you get your money, you will need to fork over an average of 28% and in some cases as high as 48% of those profits, before you can collect. Next, if you wholesale to department stores, your production process must meet deadlines for timely order fulfillment, in addition, there is a potential charge back fee, if the goods aren’t sold. Let me warn you now, charge backs can and will most often bankrupt a small brand. These fees are typically based on the amount of profit lost on what the buyer paid as well as the potential loss of profit, providing they sold as a markdown OR if they sold at all.
All of these questions and many more, can make launching a brand as low as $2500 or the industry average of $1,000,000 - $2,00,000 for a full-scale premium brand. When starting your company, it would be best to speak with a consultant to get a better understanding of what your potential expenses will be and how to make the best use of your funding, creating the greatest impact to advance your business.
Are you interested in launching your brand or do you need help on the next steps? Set up a free consultation with me here. What are your thoughts on launching a fashion brand? Leave your comment below. Follow me on Instagram, Pinterest, Facebook, Quora, & Twitter.