How Much Money Does a Clothing Line Owner Make?

While you may have a dream to start your own clothing line, you also need to make enough money to follow that dream. So when you create that line, how much money can you expect to make in your first year as a small clothing line owner? 

How much does a clothing line owner make?

The average clothing line owner can make about $51,000 a year but can vary from about $24,000 to upwards of $140,000. 

Considering the average is about $51,000 per year, it’s important to consider the breakdown of that cost. What should you be budgeting for in your business, and what costs may come up in the future? How do you increase those profits not just now, but as you continue your business? Read on to find out what you need to be spending your money on—and how you can increase those profits before your first year is even up.

Your Budget

So what goes into your budget as you consider creating your own clothing line? This is something you should include in your business plan, which needs to be finalized or nearly finalized before you open your doors. It’s not just decisions on business name or structure, but should outline all your finances as well.

What do you need to spend money on? These are the important things you should budget for as you create your business:

• Your product. You can’t do anything without having some sort of inventory, whether you decide to make your own product or purchase it from a manufacturer. This can greatly vary depending on what you decide to do with your inventory—if you decide to produce them yourself, you will need funds for supplies. If you decide to go with a manufacturer, note that those manufacturing costs can vary from business to business and even country to country. You may be faced with product costs and raw material costs as well. 
• A point-of-sale system. Whether it’s your cash register in your store or an online website that functions with a store app, you need a way to make sales and take payments. 
• Marketing. For many, marketing does include a focus on free advertising, so you may have that opportunity with free social media apps. That being said, you still need an online presence in the form of a website, and in many cases, you will have to make a purchase for that to occur. You don’t just need to advertise on social media for it to count as marketing—discounts, samples, etc. can help drive traffic to your business whether you’re online or in a store. 
• Photography and modeling. A new idea for most starting out in their business, to entice people to purchase your items you will need models and good photography of your inventory. Consider enlisting a professional photographer—these are the first images your customers see of your products if you are selling online. 
• Staffing. Whether you plan on hiring people for your business or just plan to go it alone, you still need to budget for your own salary. 
• Insurance and business permits. If you plan on setting up shop online, that’s something as simple as making sure you have some liability insurance on your products. If you plan on making your items in your home, you should also have insurance covering that. If you have a physical store that you work out of, that requires a different type of insurance. Your business licenses and permits also fall in this category and are required. Talk to your legal counsel before making a decision or even considering budgeting this line item.
• Rent or utilities. Whether you’re working out of your home or not, you should budget this cost into your finances. 
• Delivery costs. Are you selling your items out of your home? If so, you’ll need a way to send your products, which means you’ll need to sort out how people pay for shipping, along with making sure you have the proper shipping labels and boxes. 

How much do you need to start this business? While it varies greatly with the decisions you make, you can start your business with as little as $1,000 if you limit your inventory and sell your products out of your home. For most cases, creating a smaller clothing line will run up to $10,000. If you find yourself looking to start a line with an established designer, though, you could be starting your business with a cost of $50,000 instead. Consider your options, your financial choices, and your investment before deciding your direction. 

Top Clothing Line Ideas. (and how to find them)

How can I increase my profits?

Are you looking to make more in your business, not just for your own pocket but so you have enough capital to expand? There are several ways you can do that. 

• Learn more about the industry. The more you know about the clothing industry, the better—find the niches that may be underserved. Are there people who aren’t getting the type of clothing they want out of existing providers? Is there a community that can’t find the sizes they want? Consider your demographic and make your decisions based on that information. 
• Create a plan. Whatever you decide to do, make sure you write it down. That business plan is your guide to the future, and you don’t have to waste time making decisions later—it’s already in your plan. 
• Keep a tight budget. Choose three to five items in your budget that you know you need to have. Marketing, additional products, even a physical location are all advantages and disadvantages when creating your small business—find out what works best for you and focus all your efforts and finances into those items. One downfall of many clothing lines is trademarking your designs too early—it can be extremely expensive. If you find your business getting more and more popular and then have the fear of someone stealing your designs, that’s the time to consider trademarking— not at the start of your business. You should also familiarize yourself with the cost of your products—and make sure you always know who has the best quality for the lowest price.
• Market directly to your target demographic. People can’t buy what they don’t know about, so reach your demographic through your social media posts or advertising. Make sure your website is easy to navigate, so people can easily purchase your clothing. Make sure you have a marketing plan—if you plan on using social media, set up a post schedule so people know when to look for your posts. 

• Don’t have too much inventory. If you have too much inventory, you’ll waste all your money in that and then not make a profit. Consider waiting lists or pre-orders to stop this waste. In the same vein, make sure your existing product is something that people want. Get feedback on your designs to make sure people are buying.
• Provide incentives to purchase more. Whether you’re selling online or in person, give people a reason to spend more. Providing coupons or coupon codes seems to be the tried-and-true method for most clothing stores.
• Trade your talents. If you find yourself struggling to make ends meet, consider talking to people in your network about trading talents. If you need a photographer, considering finding someone that may need additional portfolio work or may need your assistance in return. 

When it comes down to asking how much a clothing line owner makes, the hard number of $51,000 is an estimation based on the successes and budgets of many businesses. While this can give you an idea of what you can expect as you develop your business, note that all profit comes from hard work. Make sure you know your limits, provide quality items, and trust yourself. If you put your energies and efforts into creating the best brand you can, along with making sure people know about you and what you stand for, you could increase that average salary exponentially. Make sure, though, that this is something you’re passionate about. If it is, that hard work will make that salary worth it. 

How Much Money Do You Need to Start a Clothing Line?

RELATED QUESTIONS

If I am purchasing my inventory, where can I get it?

For most larger stores, they will purchase their inventory through wholesalers. If you are interested in starting your shop with a boutique vibe, consider checking out clothing trade shows, talking to manufacturers directly, or talking to other boutique owners. If you decide you want to hand-make your clothing, that is an option too, although many retailers have stopped that in recent years. 

Is starting my clothing business online better than having a physical store?

Because of the Internet age, more and more businesses are going strictly online. While there are advantages to having a physical store—people can try on your items, browse easily, and you can hold events and provide more incentives for them to purchase more in person—so many businesses are focusing online as they do not have the overhead in a physical storefront. If you are just starting out and want to be budget conscious, creating an online store is more cost effective. 

For more information on how to start your own fashion clothing line checkout my course and startup documents here

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.