How Much Does It Cost to Start a Fashion Brand?
How much will it cost to start my fashion brand? I hear this question all the time from cost-conscious entrepreneurs eager to fulfill their dream of starting their own brand but wanting to understand the full investment from the start. There are SO many variable factors that go into the cost of starting an apparel brand which is why it’s impossible for me to provide an exact quote of all costs.
Instead of giving an exact amount, l can break down a range of costs you can expect for each step in the brand-launch process. This can give you an understanding of what costs you will need to consider and when the investments will need to be made. I’ll also give you some tips to streamline processes and save money.
Creative and Technical Design
This is the most exciting part of the launch process where you get to translate all of your thoughts into actual designs for you brand! In this step you’ll work to define your style, design your products and create technical specifications which give the factory specific instruction on how to build your products. Technical design is a very important step in the process to achieving an approvable sample quickly which will in turn minimize costs to develop the product later in the process.
Many of the clients I have worked with have done their own creative design with sketches and inspiration from samples they have purchased. Others hire fashion designers to turn their ideas into products. Regardless of how you decide to design your products, if you hire this out to a designer make sure they can offer you both creative and technical design. It will be cheaper and take less time to hire the project out to one vendor instead of two. Designers vary greatly in their fee but usually charge around $75-$150 per hour.
Most domestic manufacturers require tech packs which are a full technical design and specification package. I have found that many of these tech packs are full of information that is not necessary for production so you end up paying for extra hours of design that you don’t need. Ask technical designers to look at sample tech packs they plan to create and how much detail they are planning to execute per style. You can confirm how much detail is required with your manufacturer so you don’t overpay for technical design. I have also found that factories work much better off of inspiration samples so if you have a physical sample to show them along with a concise tech pack, you will be set up for success.
In this step, you will bring your designs to life and start to involve production partners into the process. You will be creating a prototype sample for each style in which you will review design, construction and fit until you get to an approvable sample for the factory to follow for production. Once approved, your vendor partner will also create patterns and graded measurements of all the sizes you are offering.
Many domestic factories offer product development packages by style which include many of these necessary steps. The cost of this can vary based on the complexity of the style with the average cost being $1,000 per style. So, for example, you may be able to develop a t-shirt for around $500, but a fully lined blazer could be around $2,000 per style. It is all based on how many hours of work need to go into developing the style.
Be sure to fully understand what is included in these per-style product development charges. This varies greatly by vendor partner. Unfortunately, some factories take advantage of the fact that you don’t now all of the necessary steps that need to be taken to get production-ready. It could exclude patterns and grading which are also costly but necessary. The fee could also only include one round of prototype samples. Getting a 100% approvable sample after one try is very rare so you should understand what the costs are for addition prototype samples in case you need to sample two or three times to get the product exactly how you want it.
Another cost in this stage is purchasing your sample materials and trims so your vendor can create these prototype samples. This cost is specific to the fabric and trims you sourced for your products. To come up with an estimated cost I would assume five yards of fabric per style and include trim costs. Also include shipping costs in getting these materials to the factory and try to consolidate shipments where you can. If you are producing internationally, these costs are included in the cost you are paying for production and handled by your production partner.
If you are producing in the US, you will need to order and ship all of your production material and trims to the factory in order for your production to start. This cost is based completely off of the trims and fabric you sourced and selected for your products along with how many styles and colors you have. It isn’t just the fabric and zippers or buttons, you will also need to factor in material costs like interlining, branded labels and hangtags, and fabric printing for example.
If you choose to produce overseas, the factory sources, purchases and ships all of the production material for you and is factored into their production cost. Even with these costs included, the cost for international production is still much cheaper than producing in the US.
You will also need to pay for the production of your garments. Generally, production is paid for with 50% of the total cost to start production and the balance 50% due upon completion. This is a standard practice in the US and overseas so if a factory is requesting you pay for everything up front, I would ask more questions to understand their reasoning.
There will always be surprises along the way, but this should provide you with a roadmap for building an initial launch budget and deciding if you are ready to chase your dreams. Understanding the necessary steps along with what you are paying for will help you to minimize costs during this start-up phase and invest in the right services.
Don’t be afraid to ask questions and find people who can help you along the way. You can do this!