The Largest Expenses For A Clothing Company

Clothing is a mark of self-expression. We wear them daily, many with different designs, graphics, and styles that represent who we are because of our style. If you love clothing, the art of making it, and how it makes customers feel, you may be motivated to start a clothing company. 

The largest expenses for a clothing company are: 

  • Manufacturing expenses
  • The average cost of different clothing materials. 
  • Marketing costs. 
  • Design expenses. 
  • Labor costs. 

As we break down each expense, you can get an idea of the nature of running a clothing company from a financial standpoint. Pick out your best outfit and get ready to weave your clothing company’s destiny as you read on. 

Manufacturing Expenses

Manufacturing expenses will be the largest expenses for a clothing company. So much goes into creating a piece of clothing such as:

  • Measuring dimensions of the garment. 
  • Cutting out the pieces. 
  • Assembling all the pieces with a sewing machine. 
  • Packaging the garment and shipping them to stores. 

Let’s consider the costs of popular clothing items and their usual markups. 

The Definition Of A Clothing Line (What A Clothing Line is)

Costs and Markups

The Largest Expenses for A Clothing Company

The average cost of manufacturing a T-shirt is $2.10 per garment. However, the markup could be selling a T-shirt for about $5 to $10 depending on size, design, and graphics. If the shirt is a name brand or has a notable character printed on it, the markup will be even higher to accommodate the popularity of these well-known names and characters. 

For a pair of denim pants, it costs about $7.78 to manufacture per garment. Think about the denim, sewing, measuring, and other functions that go into making a pair of denim pants. The sewer or machine must cut the parts of the pants into one of four to six different sizes for that pant style and then sew them together according to their company standard. You may see a pair of denim pants marked up to $15 to $25 or even higher depending on where you shop. 

Consider the costs of manufacturing all the clothing styles in your company. Be sure to markup enough that you can earn your money back on manufacturing costs and glean a good profit with every sale. 

Where Will You Manufacture Your Clothes?

Manufacturing expenses will be higher in America than that in a third-world country. Take for example how Bangladesh’s exports come 77% from the clothing they send to America and other countries. It costs about $3.72 to manufacture a denim shirt in Bangladesh versus $13.22 for creating the same garment in the United States. 

Where you want to manufacture your clothes is all up to you. While you can save money by outsourcing your clothing manufacturing to a foreign country, this will take away jobs from Americans. 

However, if you have your clothes manufactured in America, you will have a higher production cost. Therefore, you will have to charge your customers a higher price to get the profit you need on each garment. 

Ten Fashion Business Management Tips

Average Cost of Different Clothing Materials and Designs

Of course, you may not use all these materials listed below to make your clothing. The most popularly used materials are cotton and polyester out of all the ones listed here. Let’s go over the average cost for each material so you can compare and contrast the costs to consider what materials you will use to make your garments. 

We will mention the average costs for:

The Largest Expenses for A Clothing Company
  • Chiffon.
  • Cotton.
  • Crepe. 
  • Denim. 
  • Lace. 
  • Silk.
  • Polyester. 
Chiffon

Chiffon is made of different materials such as cotton, nylon, and polyester. It mimics the feel of silk without actually being made from that material. On fabric.com, chiffon is anywhere between $4.50 to over $6 per yard. 

Cotton

Cotton comes from the plantations in the United States, the People’s Republic of China, Uzbekistan, and India. Depending on where you get your cotton, it can cost as low as $5 for each yard or as high as $20 for every yard. 

Crepe

Because crepe fabric is made from twisted yarns, it is resistant to wrinkles, which makes it a great material for fancy-looking tops and comfortable pajamas. On fabric.com, you can purchase crepe fabric for about $4.99 to $8.99 per yard. 

Denim

Denim is made from a twill weave that gives pants a trademark diagonal ribbing pattern. The material is most popularly used to make pants, but there are also jean jackets and denim shirts. Fabric.com has different types of denim from $7.98 per yard to almost $25 per yard. 

Lace

Different types of yarn or thread are expertly weaved together to create lace. Lace is usually about $5 to a little over $20 per yard. This depends on the color, brand name, and if there is a design on it. Designs take more work to put on the material, which means this comes with a higher price tag. 

Silk
The Largest Expenses for A Clothing Company

Silk is one of the most expensive fabrics on this list. It can cost as low as $8 per yard to as high as $80 per yard. The material is sourced from silkworms when they spin themselves into a silky cocoon that transforms from a worm into a silkmoth. 

Consider making garments out of a cheaper material before moving on to silk clothing. You can release silk pajamas as a new product line once you have built up enough capital to sustain this set’s manufacturing costs. 

Polyester

Polyester is a synthetic material sourced from petroleum. Cotton and polyester are usually mixed to make a blend that creates softer clothes for clients. Raw polyester fibers cost about $1 per pound but are mindful that prices fluctuate just like stock market prices. 

How Do Fashion Designers Make Clothes?

Marketing Costs

To get your brand name known to potential clients, you must market your garments. Here are some suggestions on how to market your clothing company and the costs associated with each avenue. 

Website and Social Media

Website hosting can cost anywhere between $5 to $20 per month or more. This depends on the web hosting company and the features package you choose. 

Constantly hyperlink your website pages on your social media pages. Do the same thing for websites by hyperlinking to your social media pages. For example, if you have a blog post on your website, link it on your social media page so both platforms engage your clients. 

Business social media pages are free to start, but if you want to get a specific post sponsored, it may cost a one-time fee to get it highly promoted to social media users. 

TV and Radio

Television and radio can be marketing types that you employ later in your company’s life as you build more capital. Television commercials can cost as low as $2,000 depending on props, actors, commercial length, and other factors. A quick radio commercial may only cost $200. Keep in mind that people prefer more visual than auditory representations when learning about new products. 

The Largest Expenses for A Clothing Company
YouTube Videos

Speaking of visual representation, if you do not have enough to get a radio or television commercial, you can make your own on YouTube for a much lower cost. You may have to make your videos for a while before considering hiring a videographer to help you. 

Labor Costs

Just like the manufacturing costs, labor costs are lower in other countries than in America. According to ZipRecruiter, the average wages for Apparel Production Representatives are $22 per hour and about $46,523 annually. In the 25th percentile, this same group of employees earns about $15 per hour. 

For best results in fair pay, choose a wage that is between the 25th percentile and the average number. This way, your employees can get a fair wage as you receive your profits. 

You want to pay your employees a fair wage and make sure that they are in a safe working environment while making your clothing. This will enhance employee morale and loyalty while reinforcing positive public relations. 

Final Thoughts About Largest Expenses For A Clothing Company

While creating a clothing company can take much time and money, it can be rewarding in the long run because it is all your idea. Consider all the costs that go into manufacturing clothing, marketing to clients, and what you should pay employees so they receive a fair wage. 

Pros And Cons Of Starting A Clothing Line

Related Questions

How much money do you need to start a clothing line?

Starting a clothing line could cost anywhere between $500 to $10,000. If you already have experience in the design industry, it could cost you a minimum of $25,000 to get started on a new clothing line. It would depend on how many garments you want to start within the line, the materials and production cost, and your marketing expenses. 

Is a clothing business a profitable business?

Average profit margins for owning a clothing business are about 4% to 13%, which is a little lower compared to running another type of business. If clothing is your passion, then it will be profitable in your eyes because you love what you are doing. 

To learn more about how to start your own fashion clothing line check out my 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.