Although the cost of starting a clothing line with a private label manufacturer is cheaper than creating a whole new brand, it is essential to note that the exact amount it costs will vary depending on many vital factors.
However, unlike selling a new product, working with these manufacturers makes the whole process less challenging and faster because you don’t create the products from scratch.
Private label clothing describes apparel manufactured by a third-party manufacturer to be branded and sold by another business or company.
A good number of enterprises provide private-label clothing to fashion businesses that are managed by a retailer for sale in a specific digital or brick-and-mortar store or chain of stores.
These third-party manufacturers are becoming quite popular in the fashion industry because they optimize production depending on consumer demands, organize and control the supply chain, and redirect or limit advertising costs.
It also means that clothing line businesses don’t always have to invest in capital-gulping manufacturing facilities, creative designers and quality assurance personnel, or a specialized supply chain.
Factors That Determine the Cost of Opening a Clothing Line With a Private Label Manufacturer
Just as it was explained above, the exact amount it costs will vary depending on many vital factors. Those factors include;
This is, without doubt, the primary expense that will determine how much you invest to start your clothing line with a private label manufacturer.
The manufacturing cost will indeed be the primary focus of your business plan and will work to determine the size of your business coupled with your target market.
As such, take your time to verify that your production cost and target price align. You should also make sure that you verify production costs according to your niche.
When working with these professionals, you would want to know that cost decreases as order quantity increases and this applies to all manufacturing, not just to garment or apparel manufacturing. Private label manufacturers are known to charge less when you are ordering massive quantities.
Note that how much you spend will also depend on the manufacturer’s location especially since they will have to cater to the labor fees that come with making your apparel.
The cost that comes with making low quantities and minimum order sizes (MOQs) tends to be quite high in Western countries.
This is why countries such as China, Bangladesh, and the Philippines have become quite popular as manufacturing locations, especially in comparison to the US and other European countries.
You should also consider the costs of raw materials when analyzing how much it will cost to leverage a private-label manufacturer.
Note that the raw materials needed for your clothing business remain one of the major costing factors. Expenses for materials encompass things like fabric, packaging, labels, etc.
When calculated together with the labor cost depending on the production location and the order quantity, this makes up your manufacturing cost.
In this modern age, businesses have learned to leverage social media as a form of free marketing. Nevertheless, if you want your clothing line to go toe to toe with other well-known brands out there, then you have to invest in marketing.
However, regardless of how you advertise yourself, don’t forget to create a plan and the right budget for your marketing campaign.
Most often, clothing lines that work with private labels tend to accrue design costs as they have to pay graphic designers to come up with clothing designs.
Please note that the designs of your apparel remain a valid factor when starting a clothing line. If you have graphic design skills, then you would not have to bother with professional graphic designers.
Nevertheless, always remember that you won’t continue to do it alone, and will at some point need the help of graphic designers.
Licensing or business permit
This is very important especially since you will want your business legalized to carry on operations. In the United States, you can’t start and operate a business if you are not adequately registered. Also, note that there are expenses that come with processing a business permit and paying taxes.
You might as well have a budget for the license acquisition and not wait till it becomes an issue that impacts your business success.
You will most definitely need to have a staff working with you including third-party service people (such as fulfillment) that will become a very important component of your operations.
Always ensure to pay these employees handsomely to ensure that you can get quality work from them. Workers who are underpaid barely work up to the right level expected from them.