How to start a clothing brand — Step-by step guide

Are you passionate about fashion and dreamed of starting your own clothing line? Launching a fashion brand can be an exciting journey filled with creativity, challenges, and rewards. However, it requires careful planning, strategic thinking, and dedication. In fact, let us start with the bad news first.

Do you know that over 80% fashion brands fail within the first 2 years of their launch. I am not saying this, it was the finding of McKinney’s research report. There are similar reports by other well-known organisations that point to a similar statistic across the fashion & apparel segment. To put this mind boggling statistics into perspective, let me ask you — if I told you that if you eat a certain variety of pizza, there is a 80% chance of you NOT surviving beyond 2 years — would you still eat that pizza? Probably not.

Yet, people jump in to start a clothing brand without proper planning and budgeting, hoping for either some miracle to happen or count on their ability to wing it along the way or a combination of both. But in reality, both the approaches are equally bad. While it is true that you will not have all the information when you are starting today and you are going to be forming your opinion as you climb up the learning curve but jumping in blindly without proper planning and budgeting is a recipe for a disaster.

It is very easy to get carried away by the glamor that the industry notoriously portrays but when you start peeling the layers and get a look inside, you will a solid, structured and well organised operational beast.

Launching a clothing brand is not something unique. It has been done successfully several times over the years and even decades. It is not like sending humans to Mars, that as a humanity “we got to figure this out together” — NO, absolutely not!

Several successful case studies exists, multiple successful playbooks exist and tons of lessons from brands that failed is already around. You just have to spend time digging into the rabbit hole of what works and what doesn’t so that you can plan well for your fashion brand.

If your looking for “how to start a clothing brand with zero money down” — do not read further, you will be severely disappointed. This guide is not a get-rich-quick scheme. Neither it is a print-on-demand, drop shipping, Etsy or some quick pump & dump scheme.

Building a fashion brand is all about blood, sweat, and tears and being broke for as long as you get to product-market fit.

In this comprehensive guide, we’ll walk you through the step-by-step process of starting your own fashion brand, from concept development to launch and the potential pitfalls in between. Starting a clothing brand is an incredibly complex process with multiple moving parts. It would be unfair to put together a blog post to make it look super easy to start a fashion brand.

There are books, YouTube channel, podcasts, resources, knowledge base and tons of other resources on the internet as well as on our website that I recommend you should dig further.

This guide is a broad overview from the book — How to Start a clothing brand. If this overview resonates with you, I would recommend that you go ahead and download the book and read it at one go. My goal to write the book was not to make money but to bring awareness and for that reason this book is part of Kindle Unlimited program, so if you have kindle unlimited, you can download this book for free.

Before we get started, let’s talk about you.

Step#1 : Self-Evaluation

Skill Evaluation

During the early days of your clothing brand, you should organise your business into two parts — make stuff and sell stuff. And you need to be incredibly good in at least one of these.

You should NOT start a fashion brand if you cannot do either.

If you do not have the expertise in either making or selling stuff, then either you learn one of these skills or both or find something better to do than starting a clothing brand.

When you bring in early employees, advisors, or consultants, ensure you can articulate their value addition in the make stuff category, sell stuff category, or both. If you cannot put that person in either box, you shouldn’t hire that person.

There are other support functions like tax, legal etc., but those functions should be distinct from the above two core functions. Internal Hiring can be either for making stuff or selling stuff. Period.

Avoid the ABCD trap

The Anybody Can Do It trap, or as it is popularly known as the ABCD trap, is a major challenge for any serious fashion entrepreneur.

What looks super easy from the outside is very complicated, and it takes over a decade to build an enduring fashion brand. It would take you at least a couple of years just to get a hang of things.

Did you see I put a special emphasis on the word — just.

Getting the hang of everything related to your fashion brand by the end of year 2 is your BEST Case Scenario.

So why do people fall for the ABCD trap? Because it’s a clickbait!

In a world full of Hermes (1837)and Louis Vuitton (1854), it is super exciting to hear — build a fashion brand in less than 30 days or how to build a fashion brand with zero investment.

Step #2 : Market Research

There is a wealth of information available on how to do market research and we will cover the details of doing specific product research in a different post. If you are interested to dig deeper into the market research part, I would recommend you definitely read the book — How to Start a Clothing brand. There is more than one chapter dedicated to conducting market research.

For this post, I am going to leave you with some frameworks, desired goal output that you should have, when you are conducting the market research for your clothing brand.

#a. Understand your Platform:

If you are starting a fashion brand in 2024 and beyond, e-Commerce should be your go-to strategy without thinking twice. Opening an offline retail store is resource intensive from money and time perspective and until and unless you are not part of a large business group with substantial capital to deploy (read over $100mm in capital overlays), then you should refrain from starting a clothing brand via offline medium.

The book — how to start a fashion brand is dedicated to starting a clothing brand with ONLY E-commerce in mind. We have not only covered the step-by-step guide on how to conduct market research but also covered a plethora of tools by their end-use and application.

So for now, let us just focus on two large e-commerce distribution platforms : Amazon and Shopify

First, let us compare Amazon marketplace with Shopify:

Amazon is the one-stop solution for ecommerce, but it is a closed platform, which basically means that you have to provide your inventory, and Amazon takes care of the rest.

Shopify, on the other hand, gives you a building block and lets you integrate with other service providers and tools to deliver a similar experience to Amazon. Essentially Shopify gives you more control over your brand experience compared to Shopify.

There are pros and cons for both Shopify and Amazon, and it would be completely out of scope for this post to compare both the platforms. Go and read — 7 points to remember when doing product research for your clothing brands for Shopify platform.

#b. Understand Your Pricing

Once you have decided which platform to focus on, it’s time to consider pricing.

Long ago, pricing was determined by the cost+ approach. This approach meant that the retail price was determined by how much the product costs to make, and then there was a markup to cover the overheads and margin.

In retail, this changed further, and today, pricing is not determined by the cost+ approach but by what your competitor is selling. Modern-day retail pricing, at least in the fashion category, has nothing to do with cost, although cost multiples still play an important role in benchmarking.

Usually, retail prices are 4X to 5X depending upon the product, the brand position, and various other factors. Some brands can even command a 10X markup, but I recommend having at least a 4X markup; otherwise, you will be at a loss.

You must be thinking, how could a brand charge 4X markup on cost price and yet incur a loss? Here is an explanation with a breakdown.

Let’s say you sell a dress at a retail price of $40 on Shopify. Assuming a 4X retail price means your product price is $10.

Now if you have a rock-star performance marketing lead or you are one yourself, you know how hard and challenging to achieve even an ACos of 25%:so; your best case marketing cost / CAC is 25% (of $40) which is again =$10

You have another $7-$10 in fulfilment cost whether you are doing FBA or any other delivery network. Let us assume the fulfilment cost at $8. Adding up all these costs leaves you with a $12 net profit in a best-case scenario.

Retail Price per Unit= $40

• Cost of Product (COGS) =$10
• Cost of Acquiring Customer (CAC) = $10
• Logistics & Fulfilment Cost =$8
• Total Variable Cost = $28

Total Unit Net Profit = $12

If you have a potential competitor with deep pockets and under-pricing a product, then it is better to avoid getting into the same product category head-on.

#c. Understand your customers and — your competitors

Your customers and competitors go hand-in-hand. In fact, your customers are a function of your choice of the e-commerce platform you choose for distribution, and often this important aspect needs to be noticed by most fashion entrepreneurs.

Entrepreneurs from design or creative backgrounds often fall into the trap of build first, and they will come — which never happens, and as an entrepreneur, you should always avoid this fallacy.

It is not a straight-line process but a constant iterative process that you should learn over a period of time to perfect your product offering.

It starts with a product hunch — this product you feel has enormous potential, yet nobody or only a few competitors are going after such a niche.

So you follow these steps to verify your hunch –

1. Learn everything about your product.
2. Finalize your target country.
3. Finalize your target platform (Amazon or Shopify etc.)
4. Once you have finalized your target platform, you should evaluate your top 5 or 10 competitors; we have covered in depth on how to analyse your competitors in this book — How to start a clothing brand, so it is worth the read.
5. Once you finish evaluating your customers, you should establish your price band. For example, some competitors may sell a product for $50 while others might sell in the $15-$20 bracket.

Your job at this stage is to identify which price band you should go after, and you should have very solid reasoning to choose a specific price band and not vague reasoning. Your choice of cost (ASP — average selling price) will determine the type of customers and competitors you are going to face.

Step#3 : Design

If you are from a fashion design background, you may find some of the information in this step very basic. If that’s the case, you can skip directly to the next (step#4 — Merchandising Plan).

For others who need to become more familiar with fashion design, you need to know a few basic things to get around.

You can always hire an experienced fashion designer who specializes in your niche, but you must know the key elements in the design that you should look for when giving a design brief to your designer.

The basic design process should start with some inspirations translating to Mood boards if you are starting something from scratch. These mood boards should be well thought out and ideally structured around one master SKU and then you translate that mood board into a design brief, and that design brief gets translated into a tech pack which you can learn in this book — How to start a clothing brand.

What is a Fashion tech pack ?

Understanding of fashion Tech Pack becomes extremely crucial when you are focussed on starting an apparel brand. Tech Pack is short for Technical packet, basically the blueprint of your entire product (apparel, handbag, footwear, etc.) Your designer’s deliverables should be tech packs if you intend to manufacture them.

A tech pack is a set of documents with technical designs, sketches and images, measurements, a Bill of Material (BOM), care instructions, construction details, and even packaging instructions.

You would be working with an external supplier, and the tech pack becomes very important to bring all the stakeholders on the same page. Here is a screengrab from the tool Techpacker to give you a sense of how a tech pack looks like.

You can use software tools like techpacker or Adobe Illustrator for sketches and create the rest on a spreadsheet like Microsoft Excel or Google Sheets.

Measurements: Depending upon the product type, the parameters for measurements can vary.

In the above example, you can see that there are over 60 parameters of measurement to be considered for a very basic night suit set for young boys.

The more detailed measurement means a more specific body, and it would be better for your factory to follow the instructions.

In the above example — each line item (serial no.) is a point of measure (POM).

POMs are specific location from which measurements of the finished garment is taken. POMs not only allow you to measure the dimension and hence the fit but also allows you to measure the amount of variance that happens after the garment is cut and sew.

I suggest you read this guide -How to start a clothing brand for more details on this topic.

Here is an example of a detail page of the tech pack of Polo T-shirts

As you can see from this tech pack, that every little detail in this tech pack has a call out to emphasize the specific aspect of that particular element which is being called out.

Similarly, products with specific prints, designs, embroideries, etc. need a call-out. You even have a call-out for packaging instructions.

Step#4 : Build a merchandising plan

Until now — we learned the key elements of product research, design and product development in the previous steps.

In this step, we will dig deeper into the merchandising plan and how this merchandise planning ties up with your production planning and sales forecasting.

There is an entire chapter that covers the merchandising planning in this book — How to Start a Fashion brand

I am providing you with a broad overview of sub-chapters within the merchandise planning:

1. What is a merchandising plan?
2. The 5 Ps of a strong Merchandise plan.
3. What information do you need before creating merchandising plan?
4. Inventory Allocation types:

• Brand Activation & Giveaways
• Organic sales / Word of mouth
• Digital Marketing Push
• Promotions
• Re-orders
• Discounts
• Markdowns & Liquidations

5. Budgeting and Financial planning

What is a merchandise plan?

A merchandising plan is a detailed strategy that almost all clothing brands operating within the apparel & fashion segment use to ensure their products are placed across the right sales channel (like digital marketplaces like Amazon or offline retail and wholesale) at the right time and in the right quantities.

An effective merchandise plan maps back to the essential 5 Ps of marketing — Product, Price, Promotion, Place, and People.

While I have covered each of these factors in detail in the book, it is difficult and rather complicated to put out the entire contents of the chapter here. But I am going ahead and giving you a broad overview so that at least you can get started.

Most important aspect of your merchandising plan should be pricing -ASP (Average Selling Price). And this ASP pricing should be a factor of your inventory.

The unit landing price for your inventory should be AT LEAST 4X your unit selling price of the product. In fact, we recommend that you keep your mark up as at least 5X or more. And don’t get baffled, I will show you below how even with 4X mark up, you will barely break-even if you are lucky!

First, let us understand the definition of this inventory landing price. Inventory landing price is the total cost of product + transportation (freight by air, road, sea) + taxes and duties etc. + any other costs involved for getting the product from the supplier to your warehouse.

Let us understand this landing price in reference to average selling price of your product with the help of an example below

Let’s say you are targeting a dress that sells for $40; your product cost should be $10 or below.

Assuming your ROAS is 2.5X, your advertising spent must have been $16 or higher — let’s keep this advertising cost to $16 upper limit.

Your unit Profit & Loss looks something like this-

Note on ROAS

ROAS stands for Return on Ads Spent: this figure hovers around 2.5X to 4X for an established D2C brand. If you are just starting up, your ROAS will most likely hover around 2.5X

It must be noted that this unit profit calculation does not consider returns, damaged goods in transit or during fulfillment, marketplace fees (if you are selling on Amazon), a host of other subscription tools, and the salaries of your team working on this project.

So, did you see — establishing pricing at 4X product cost is the bare minimum for fashion & lifestyle brands, particularly if your distribution strategy is e-Commerce.

There are more nuances to the merchandising plan. I would recommend that you download our merchandise planning checklist to ensure that you cover all your bases when it comes to merchandising planning.

Step#5 : Product Development

In the above steps, you learned the key elements of fashion design and how to do sales forecasts and merchandise planning from — a top-down approach. Now you are going to learn product development.

Once your tech packs are locked and your top-level merchandise plan is set, we proceed to the next stage: Product Development.

A typical successful product development cycle consists of creating multiple samples, each with a significant milestone. The process looks something like this:

I suggest you read this guide -How to start a clothing brand for more details on this topic.

Download our pre-production checklist to ensure that you are covering all the important points before you are ready to place that production order for your inventory.

There are several other types of samples like FPT / GPT etc. which we talk in a lot more detail in the book — How to Start a Clothing brand — Step-by-step guide

There is an aspect of Brand identity which we are deliberately skipping in this guide but we have covered in a detailed manner in the book. Remember to download the brand identity checklist.

Your brand identity needs to develop when you are developing the collection, which means at the design stage. When you get to product development stage, elements of your brand identity needs to translate into physical manifestation during the product development cycle. Your brand’s identity should seamlessly sync in with your fashion brand’s merchandise and there is where importance of working with the experienced suppliers come in. Novice clothing suppliers often fail this step.

I would also recommend that you head over to hulaglobal.com and explore our resources, knowledge, collections, programs, catalogue and plenty of other useful pages to dig deep.

Step#6 : Brand Activation

Assuming that your merchandise magically appears in your warehouse (just kidding — we EXACTLY know how that “magic” happens) — we move to almost the last step before launch : Brand activation.

Brand activation is the most critical aspect of a brand launch, and it often gets lost because the founder and the founding team are pulled in so many different directions before the brand launch that they lose sight of the brand launch. In fact, just like this long post — by the time you reach this stage and ready for brand activation, you & your team is so drained out that you will most likely skip this part. By now, you have done everything right.

If brand activation is done correctly, you can create a very aggressive sales flywheel from very early on. Here are some strategies for brand activation:

1. Influencer Collabs: Influencer collaborations should be the core of your brand activation strategy whether you are launching your brand on a shoestring budget or executing a multi-million-dollar brand launch. You must allocate budget and resources to influencer collaborations if you are serious about brand launch via any digital channel.
2. Pop-up Stores: If you have a product that is unique and can help create a buzz if presented physically, then you can set up temporary pop-up stores in high-traffic areas to create buzz and generate free word-of-mouth marketing.
3. Social media activation: The influencer collaborations should start generating UGC (User Generated Content), and you can create ads along with UGC to build your audience.
4. Launch Event: You can host a launch event by inviting key influencers, media and industry professionals — this strategy depends on your budget.
5. Fashion Shows: This will probably be a much more expensive affair than a basic launch event, but it is a sure-shot way to generate a lot of buzz in a very specific niche micro-market.
6. Celebrity Endorsements : If you are launching the brand, you can partner with a celebrity who embodies your brand’s values and style to represent and promote it by leveraging their social reach. Try this one, only if you have budget or extremely close relationship with celebrity or their managers.
7. Brand Partnerships: It is vital to create brand partnership opportunities with complementary brands to reach audiences.
8. PR: Although historically, media & PR activation has not been a very effective tool for brand activation for a fashion e-commerce brand launch, if you can allocate some resources or even interns to create media kits and press releases and if you are lucky, you may be even able to get some media coverages with minimal effort. The keyword is minimal effort and “lucky”.

Step#7: Launch!

In the book, how to start a fashion brand — I have chapters, specifically dedicated on brand launch for three major distribution channel : Amazon FBA, Shopify and digital wholesale. But in the interest of keeping it short, I am summarising the KPIs for the launch below.

It is very important to build your key performance indicators (KPIs) and map them across specific timelines because it is easy to lose track of time when you get sucked in.

Due to word limit here on Medium, we recommed you read the KPIs and the full transcript of the original post — How to start a clothing brand : Step-by-step guide.

If you found this post informational and you want to dig deep, I recommend that you go and download the book : How to start a clothing brand : Step by step guide for in-depth research and make full use of our resources and checklists.