Retail Dogma

How to Start a Clothing Line? Detailed Tips From a Retailer

In 2008 I started my own private label brand and later on worked at Victoria’s Secret, and have seen the big difference between how small entrepreneurs (like us) think about starting a clothing line, vs. what it actually takes in real life to succeed and become a big name one day. In this article I am going to explain how to start a clothing line, based on all the details I have learned, working in the retail industry for over 10 years.

1. Choosing Your Brand Segment

Fashion Pyramid

Before you start a clothing line, you need to decide on your brand segment.

Fashion brands are segmented into different types based on price, creativity and quality. The reasoning behind this is that each brand segment also serves a different market segment and customer profile. That’s why it is very important from the beginning to decide on your brand segment.

The Different Brand Segments for Clothing Brands Include:

  • Haute Couture
  • Ready-to-Wear
  • Diffusion
  • Bridge
  • Mass Market

Read More: The Fashion Pyramid

Determining which brand segment your clothing line will belong to will affect many different things down the line. This will include:

  • Your Brand Name & Logo
  • Your Pricing Method
  • Your Marketing Strategy
  • Your Packaging Materials
  • Your Clothing Line Designs
  • Your Buying Strategy

That’s why it is important to decide before you start a clothing line, whether you want to be a value, premium or luxury fashion brand.

Value brands in fashion are in the mass market segment.

Premium brands are in the bridge and diffusion segment, although a lot of premium brands, such as Zara and Nike address the mass market.

Luxury brands are in the RTW and Haute Couture segment.

Value Clothing Brands

Value clothing brands are characterized by giving good value to their customers at the most affordable price. Their price is always competitive, even if it means sacrificing on the quality side.

Value brands often have a bigger customer segment to serve, and so they make money by manufacturing and selling big quantities. Their gross margins might be low, but due to the scale the numbers add up at the end.

An example of a value clothing brand is Fashion Nova. They depend on creating designs according to the latest trends, but at a much more “affordable” price, and shipping them in huge quantities across the globe.

Fashion Nova Clothing Line
Image Source: Fashion Nova

Value brands will always make sure to highlight their price and the “affordability” factor in their marketing message. It is their selling proposition.

affordable clothing line
Image Source: Google

Customers of value brands do expect to compromise on quality and they don’t mind it, since they are getting it at cheap price.

I once had a conversation with an executive at one of the biggest value brands in the Middle East and he told me “our products are made to last only for 4 washes“.

Premium Clothing Brands

At higher price & quality levels will come premium brands. These brands will be targeting a narrower market segment, but a more affluent one.

Premium brands will put a big focus on marketing to make sure to create this higher perceived value effect.

Perceived Value

It is not necessary for a brand to have different product features or even much higher quality to sell it at higher prices. In fact, when it comes to fashion you will find that a lot of brands circle back to using the same materials and factories in China to produce their products.

value clothing line pricing
Basic T-shirt at Amazon Fashion
premium clothing line pricing
Basic T-shirt at Zara

Here is where marketing & branding will come in play to create this higher “perceived” value effect, that will in return reflect in the price of their premium products.

Luxury Clothing Brands

luxury clothing brands
Image Source: Google

Luxury brands are all about exclusivity. They target a very narrow segment, but don’t really need the scale since their prices & margins are high enough.

Read Also: What is Luxury Retail?

In fact, luxury brands will always try to maintain a level of scarcity when it comes to their product releases or collection launches, so that they create this urgency for acquiring their products and be able to charge higher prices. This also reassures their customers that the product is somewhat exclusive.

Read Also: Prestige Pricing

2. Choosing Your Clothing Segment

The next thing you will need to decide on before you start a clothing line is the clothing segment itself. The apparel retail segment is further categorized into different sub-segments.

You might choose to start a line in one of the following:

  • Women’s Clothing
  • Men’s Clothing
  • Kids’ Clothing
  • Family Clothing

Which segment do you want to serve?

Just like the brand segment, choosing your clothing segment will determine your brand identity, marketing strategy, designs, packaging, …etc. That’s why you need to decide on this early on.

For example if you decide to be a kids clothing line, your logo will look much different that a women’s clothing line.

Niching Down

We always recommend niching down for a small independent retailer. That way you will be able to control your operation better, save money on marketing and build an authority in your niche.

For example if you decided to be in the women’s clothing segment, you might want to niche down to:

  • Maternity Clothing
  • Lingerie & Lounge Wear
  • Plus Size Clothing
  • Swim Wear
  • Workwear / Office Wear
  • Sportswear

Which particular segment do you want to serve?

Of course you might want to stop at the previous step and choose a broader segment to serve.

3. Creating Your Brand Identity

Now that you know exactly who you are going to target and what segment you will be competing in, you will start creating a brand identity that represents all that.

Brand Name

You will start with a unique brand name, that is relevant to your product and market segment and also easy to remember.

Brand Logo

Then you will create a logo that represents your brand identity and is according to your brand guidelines (see below)

Digital Presence

Once you decided on your brand name, you can go ahead and reserve a domain name and social media handles that you will use later on in your digital marketing.

4. Creating Your Brand Guidelines

One of the things you also need to decide on is your brand guidelines. This will include your color scheme that you will stick to in your marketing materials.

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You will need to choose which colors will represent your brand, as well as which fonts you will be using.

These guideline will then be used in your different brand properties, i.e your website, brochures, business cards, packaging materials…etc.

Maintaining a coherent brand identity will increase the perceived value of your brand and serve as a nice aesthetic on your properties.

5. Creating a Product Portfolio Outline for Your Clothing Line

The next step will be creating a product portfolio outline.

You have decided to be in the women’s apparel business, but what are the products you want to make? You don’t need to make all the products in that segment. So you can decide what you will start with first.

You can start by creating a merchandise hierarchy, where you will plot down the different product categories you want to carry and subsegments of those categories (class, subclass).

Merchandise Hierarchy

Department or Category

Example for a women’s clothing line :

  • Tops
  • Bottoms
  • Accessories

Class

Example for a women’s clothing line under “Tops” department :

  • Shirts
  • T-shirts
  • Blouses

Subclasses

Example for a women’s clothing Line under “Tops” department and “T-shirts” class :

  • Short Sleeve
  • Long Sleeve
  • Sleeveless

It should be noted that the categorization is flexible and doesn’t have to stick to a specific industry script. The main thing is to maintain it consistent over time.

6. Choosing The Designer of Your Clothing Line

Now that you have an idea of what you will create, down to the class and subclass level, you will then start creating your first collection.

Here you want to decide about who will design your clothing line. If you are a designer yourself, then it is solved, but chances are, you are not.

You should know that the designer is going to be the most important person on your team, and his talent, or lack-of, can make or break your clothing line. So it pays to invest in a good, creative, designer from the start.

Designing the First Collection

Your designer will start working on your first collection. This collection is your introduction into the market, so you want to make sure you are getting everything right, especially the below points:

  • Different Style Options
  • Coherent Color Story for Visual Display
  • Using In-season (Trendy) Materials & Fabrics

In fashion we always talk about a “story“. The collection should be able to tell a certain story that is coherent and flowing from one style to the other. There is a certain common inspiration behind each collection. It shows in the color palettes, in the choices of materials, and of course in the end products.

Watch some fashion shows online or read industry publications and try to see how each collection or season tend to tell a story through the different products.

You want your collection to do the same.

7. Choosing a Clothing Manufacturer

When choosing a clothing supplier there are several points that you should be ready to discuss and go through.

Supplier Due Diligence

The most important part of choosing a supplier is to conduct a thorough due diligence and make sure this supplier is capable of filling your needs. There are a lot of sources to find suppliers, but that also means a lot of bad choices can happen.

The best way to establish a relationship with suppliers is to actually fly and meet them !

Yeah, I know you might have been expecting a simpler option, but if you want to compete with big brands you will need to be prepared to put in the work.

Read our article about Bargaining Power of Suppliers and How to Reduce it

Minimum Order Quantities

One of the first things a supplier will ask you about is your quantities. Almost all manufacturers that will manufacture specially for you will require a minimum order quantity (MOQ).

This is because below this MOQ the operation will not be profitable for the supplier. So be prepared to crunch your numbers and your buying budget to know how much you can order.

Our online tools will crunch all the numbers for you and allow you to stay on top of your finances. Learn how to price your products for best profitability and calculate your buying budget correctly every time !

It should be noted here that, based on the MOQ, some suppliers might refuse to manufacture for you, so my advice if you are planning a trip to meet some suppliers is to get this point straight with them at the initial e-mail stage. In this case you will make sure you are traveling to meet people who are ready to serve you.

Order Lead Time

The next point that you will need to find out, and also evaluate your suppliers based on, is order lead time. You wan to make sure that your supplier timeline can align with your timeline of creating and delivering a collection that is ready for trade.

This is especially important in fashion due to the seasonality of our products. After all, you don’t want to receive your summer collection in September, right?

Shipping & Payment Terms

Once you have agreed on the basics with your suppliers, you will then negotiate some final terms that will be included in the contract.

It is important to understand the different kinds of shipping terms and payment terms because this will affect the price and your end profitability. Read our articles on that for more details.

8. Placing Your First Order

You are now ready to place your first order and here there are two things to consider:

How Much Inventory to Buy?

How much inventory you will need will depend on your expected or budgeted sales. You can calculate this through the Open to Buy process, which you will then maintain over time. You can use our OTB calculation tool for this purpose.

The OTB process will give you a high level budget by category, which you will then breakdown further into styles and options, depending on the different styles available in the collection.

Understanding The Size Curve

Now that you know how much you will order per style, you must decide on how many pieces you order per size for that particular style.

If you are new to the fashion world you might assume that you can just order equal quantities for each size. For example if your budget is 100 pieces you order 25 small, 25 medium, 25 large, 25 Xlarge.

However; you will find out after launching that some sizes are selling out, while other sizes are not moving at all. This will result in loss of sales opportunities.

This is why all fashion buyers order based on a size curve. The size curve will depend on the target customer profile for your store or products, so there is really no right or wrong size curve to maintain. It does however look pretty much like a bell curve, where the majority is in the middle sizes and minority is in the extreme low or high sizes. Again, it depends on your market and could be skewed towards bigger or smaller sizes, so do your research.

A size curve could look like this:

1 : 2 : 2: 1

This simply means that for every 1 piece you order of small size you order 2 pieces of medium, 2 pieces of large and one piece of x large.

You take your own size curve and apply it to the quantity you want to order for each style.

Read More: Size Curve

9. Pricing Your Products

Pricing is very critical.

That’s because once you set a price range for your collection, it will also position you in a certain brand category (read above value vs. premium vs. luxury) and this will also dictate the market you are going to compete in.

In step no.1 you have already identified that brand segment your clothing line will fall into. This in itself will dictate your pricing level, and the expectations of your target customers.

In order to price correctly you need to start learning about the different types of margins. Read about intake margin vs. realized margin in our article, and see how pricing is going to affect your end profitability.

Our Pricing Guide will take you step-by-step into the right pricing method for an entire product portfolio, and give you the tools and resources needed to master your pricing from the first time. You will also need to have a projection of sales & profits for your business, in order to create your own pricing strategy, and all this is included in our tools.

10. Photoshoots

The first thing you will do when you receive your order or your samples is shooting your collection.

Creating high quality images for your collection is going to be very important for your marketing and brand building. This is especially important in the fashion industry, so be prepared to hire a good photographer to create a nice shoot for you.

11. Choosing Distribution Method for Your Clothing Line

When you start your clothing line you will have multiple options to distribute and sell your collections.

Your Own Store

You might opt for your own store and have control over the entire value chain, from start to end. But you will also find here that you have other options.

Brick & Mortar vs. Online

If you go for your own store, you will have the option of trading solely online or at brick & mortar shop, or you can choose to combine both worlds for maximum reach.

We have written an article for a cost comparison between brick & mortal retail vs online retail, so please check it out.

Department & Consignment Stores

Another option is to sell your collections at other retailers. This could be on a consignment basis or the buyers at those retailers might buy your collection in advance.

If you succeed in getting orders before actual production, this will be great for your finances and cash management, since you will not commit to producing anything that will not be sold at wholesale.

When you sell at other stores, you will be expected to help them with marketing materials to provide the best representation for your brand on the sales floor. Be prepared to share with them your different photoshoots and online marketing materials, so they can use it on their platform as well.

12. Integrating Different Distribution Channels for Your Clothing Line

You might find it is better when you start a clothing line to actually integrate both, the online and offline worlds, and maybe also sell at big department stores.

The key here is to master your supply chain, to make sure you will be able to keep a consistent supply to cover all channels without shortages.

Another thing to consider when selling across different channels is the consistency of pricing. Of course you cannot really control how much retailers will price your products at, but usually this is done through a “suggested retail price” that you give the buyers.

This is critical because the price is closely connected to your brand value and brand segmentation.

13. Continuous Product Development

When you start a clothing line you should expect it to be a continuous fully active business process . You will need to be in a constant product development mode, where every year you are coming up with new designs and patterns.

Attending Trade Shows & Industry Events

Since you are going to be doing this professionally, expect to attend fashion shows, trade shows and different industry events to build a name for yourself.

Especially if you want to sell your clothing line at department stores or boutiques, attending trade shows will be a great source of leads for you.

Seasonal Collections & Drops

Expect to be constantly under the pressure of meeting deadlines for new season launches and product drops.

If you want to maximize your revenue and returns, you need to deliver more products, consistently. You might decide not to stick only to the traditional Spring/Summer, Autumn/Winter collections, but to actually have additional drops in between, for example a “holiday special” or “valentine’s collection”.

If you fall behind on product development you will start losing traction with your customers and the buyers at big retail might drop you.

14. Monitoring & Managing Performance of Your Clothing Line

When you start a clothing line you will need to learn about what it takes to run a profitable fashion business. This business will require you to monitor the financial performance consistently and optimize it to get the best out of it, and also to be able to continue and grow.

This will include understanding Inventory Management, Financial Statements, P&L Management and Cash Flow Management.

Read our Retail Financials section for everything you will need to know

15. Growing Your Clothing Line Business

Now that you have successfully started a clothing line and have been running it profitably for a while, it is time to start thinking about expanding your fashion business.

Retail business expansion will come in different forms:

  • Market Penetration
  • Product Development
  • Market Development
  • Diversification

We explain the growth strategies in detail with real-life example in our article about How to Expand Your Retail or Ecommerce Business. Please read it.

Bottom Line

If you want to start a clothing line, be prepared to get engaged into different kinds of business functions at the same time. From product development, to branding, to marketing, to sales management and supplier negotiations. It is definitely a fulfilling journey for anyone who is passionate about business and fashion in particular.

Read more topics on Retail Dogma that will cover the different aspects of running such a business..

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