How much does it REALLY cost to start a fashion brand?

 

Ok, so you’ve always had the dream of having your own brand.

And now it seems social media is full of influencers, celebs & even your ex colleague starting their own labels, and making a success of it!

But, how much does it really cost?

Read more to find out the minimum investment required to launch your label.

1. Design & tech packs

Before you’ve even reached out to manufacturers you will need to have your designs and tech packs completed, as well as some idea of fabrics you will be using.

It is imperative that these are of high quality, or you will end up with samples that resemble something your aunt Edith tried to palm off on you last Christmas, or no samples at all, as a lot of manufacturers don’t want their time wasted.

We always advise starting with a small and manageable collection, which can still be worked as a full wardrobe. 5-10 pieces is ideal.

Design costs from an qualified and experienced technical designer:

(Including trend research, competitor analysis, full tech packs and consultation)

5 piece collection: Est £3.5-6k

So, now you’ve got your tech packs… what next?

2. breaking down Production costs

In this section we are going to look into production related costs only.

So anything like marketing (which can be the majority of a budget) will be on top of this.

The equation for your initial production run will look something like this:

Production cost = Cost per item X Minimum Order Quantity (aka MOQ)

+ Shipping costs + Admin fees + Sampling fees.

A factory can usually give an estimate on cost per item from an accurate tech pack.

3. What affects cost per item?

Cost per item includes:

  • Fabric cost

  • Trims

  • Construction costs

  • Any additional machinery fee eg mould fee

  • Pattern costs

  • Packaging


Remember, cost per item is NOT your final product price (RRP/ recommended retail price) - We will cover pricing strategy in a later blog feature.


These variables listed above are why it is IMPOSSIBLE for a consultant to give an estimate on how much it will cost you to produce your collection. Depending on the technicality of design (ie innovative or super simple?) choice of manufacturer (ie Chinese bulk factory or Parisian atelier?) cost per unit could be anything from $10-$4000.


We look into a few of these factors :

  • Scale. 

As with all economies of scale, generally, the higher the MOQ the cheaper the unit cost.

However, if you go for a super cheap unit cost but end up with 2500 teeshirt you cant shift, you could end up sitting on stock, which can kill a startup's cash flow. As a new business, you want to start small, gain data quickly on what works and what doesn't and replenish rapidly. This requires a good relationship with your manufacturer. 

Factories willing to work with startups will usually have a MOQ of 300-500 per style, with surcharges for less than that. (MOCs - minimum order per colour can also come into effect here) 

Some factories do have lower MOQs, or could even work in a custom made to order manner-this is often the case for smaller UK manufacturers.

  • The type of manufacturer 

There are two types of factory- CMT and Fully Factored. 
CMT manufacturing units work as per the acronym, Cut the fabric, Make up the garments and then Trim the garment.

CMT units can often make much smaller quantities as they don't have to worry about the minimum order quantities that are placed on fabrics, as the client will send them all their fabrics.

 On the other hand, a fully factored manufacturer will take care of everything, from sourcing fabric to printing the fabric, to pattern making  the actual template pattern pieces that will be cut and sewn together) delivery handling, etc. These extra services will be added to the unit cost, pushing up production costs but saving headaches in other areas.

There are also many agents whose job it is to match make brands and factories, and they can also help in translating your needs, tech packs and questions if there is a language barrier. They will also chase on late sampling and help negotiate prices. They would also usually add their costs into a unit price. 

  • Cost Of Raw Materials

Yes, sustainable fabrics are still more expensive, but this can also vary wildly.

For example, fabrics such as Tencel Modal, made from tree pulp, are branded and will be more expensive as they are made by one specific well known fabric mill. Other more generic fabrics are cheaper as they can be easily replicated (although may not be as well respected due to lower quality).


Background checks must be made on fabrics to ensure you know exactly where they have come from and if they are in fact sustainable. There are a lot of different certifications that you can check for to ensure this knowledge. I have attached a document on fabric certifications.Recycled fabrics are usually the cheapest of the sustainable fabrics and most commonly available. 

The washes and softeners used on a fabric can also affect the price. For example, the brushed soft feel that some leggings have is usually caused by a chemical wash. This will have been an additional process. There are more and more eco-friendly options coming into the market now, for example enzyme washes, which use less water.

  •  Location

If you manufacture in the Far East the unit cost will often be much cheaper than in more developed countries or domestically. But then you’d also need to include additional costs such as flights to visit factories, International courier charges for samples, and possibly also an agent’s fees to handle everything for you to avoid the costs involved if there’s been some miscommunication with the factory and everything has been made wrong! 

  • Labeling, packaging 

The quality and type of labelling and packing you choose is also going to add to unit costs. Luxury packaging, or fully biodegradable packaging for example will come at an added cost. 

  • Quality Checking

 Are you going to have to take trips to check your stock? Will there be someone dedicated to this process? Quality checking of production is something that needs to be considered and is tantamount in a first run. This should be budgeted for.


Below are some helpful resources that may be of help :

 

With thanks to my sources:

https://graincreative.com/shirt-cost-breakdown/

https://seamapparel.com/blog/clothing-manufacturing-cost-sheet/

trends, what's new?, fashion design, Innovation, Sustainability, BusinessSarah Corderysarah denise studiofashion illustration, vogue, graphic design, art, artists, design, trend, forecasting, 3d, virtual, rendering, CLO, digital art, trends, tre, susainable, fashion industry, fashionComment