How to Start a Clothing Business with Buying Wholesale in 6 Simple Steps [2023 Update]

Struggling to start a clothing store by buying wholesale?

Well, the starting point of such a business can be confusing for beginners.

However, with a few guidelines, you’ll clearly understand the steps you should take to launch your apparel business.

This post will give you a detailed answer on how to start a clothing business with buying wholesale.

How Profitable Is Owning a Clothing Business with Buying Wholesale?

The average profit margin for clothing stores in the US is 7%. This means that each $100 they invest, they get $107 in revenue. Given that, 7% is a healthy margin for a small business.

Still, the amount you can make depends on your business scale and how you manage and market your products. It also varies based on the pricing strategy you follow and the overall costs of your operations.

What You’ll Need to Start a Clothing Business with Wholesale [& Associated Costs]

The requirements for starting a clothing business that buys wholesale vary based on many variables.

Though, the following needs are essential for any closing business of this type:

• Business Registration and Licenses ($100–$150): You need to register your business to start buying and selling wholesale.
• Branding (0 to $100): You may choose the name of your business and design its visual identity yourself. Alternatively, you can hire a freelancer to help you with that.
• Photography ($20 per image): You’ll need high-quality professional photos for each item to showcase your products online.
• Business Plan: You need to make a roadmap for your following business movements in the upcoming one to two years.
• Store Location: If you open a physical store instead of only selling clothes online, you’ll need an attractive location with decent traffic. The cost will significantly differ based on the place and space.
• Samples Testing ($100–$250): The number of samples needed is based on the number of products you plan to sell.
• Initial Inventory ($1000–$3000): The number of units you need to get started depends on how large or small your niche is and your initial goals.
• Marketing and Advertising (Minimum of $200 a month): You’ll need to reach your customers and make them aware of your brand and offerings.

Do I Need a License or Certificates to Start a Clothing Business with Wholesale?

Yes, you need a license to be eligible to buy wholesale clothing.

The license’s name can vary slightly based on the state you’re running your business in.

To apply for a wholesale license, you need to have the following first:

• An IRS-registered business
• An employer identification number
• A sales tax license

Why You Should Consider Starting a Clothing Business with Buying Wholesale as a Side Hustle

There are multiple reasons why a clothing business buying wholesale is an excellent side hustle.

Here are some:

• Low set-up cost: Compared to other clothing business models that depend on buying retail units, your wholesale-based business is much less costly. This is because of the low wholesale price.
• The fashion industry is ever-growing: The clothing industry grew by %8.3 in 2022 in the US. Because of its continuous growth, there’s always room for satisfying profits for good vendors.
• Provides high flexibility: You can start by selling a limited number of demanded clothing items and then expand gradually. This will allow you to dedicate only a few hours daily to your business.
• You can achieve unlimited growth: Even if you start small with only a few items, you can later expand your business under the same brand name.

How to Start a Clothing Business with Buying Wholesale in 6 Simple Steps?

Here’s a step-by-step guide to help you plan and start your clothing business:

1. Choose a Profitable Niche

As a small business, you can only serve a limited number of customers.

So, you need to be specific and choose a small yet profitable niche to serve.  

There’s no hard rule for picking the best niche, but these three questions will help you:

• What type of clothing am I most interested in?
• What are the gaps in the clothing market that I can fill?
• What is the niche in which I can distinguish my brand?

Once you’ve picked a niche, research the audience as much as possible.

Try to identify the needs and expectations of the potential buyers deeply.

2. Create a Brand and Register Your Business

After choosing a niche and researching the target market needs and preferences, it’s time to create your brand.

Choose a memorable brand name and a logo that conveys what you offer.

You can do that yourself or hire a freelancer for it.

You also need to register your business and brand name legally.

This step is essential to ensure you won’t face any legal issues when running the business.

Registering your business will make contact with wholesalers easier as well.

This is because some ask for proof that you’re a registered business.

The registration procedures will vary depending on the state where you’ll start your business.  

3. Look for a Reliable Wholesale Supplier

After determining the type of clothes you plan to sell, you need to search for wholesalers to source your inventory.

Search the internet for wholesale vendors who sell the clothes you’re looking for.

Look at the ratings and feedback given by each wholesaler’s client.

This is to know what’s good and bad about each vendor.

You can also attend trade shows and get in touch with wholesalers there.

Contacting clothing manufacturers directly is another practical way to reach wholesale vendors.

Create a list of the potential wholesalers that match your requirements.

4. Test Samples and Evaluate Wholesalers

Contact the wholesalers on your list and request samples of their products to test.

The cost of testing product samples can be high, especially if the wholesaler is intranational.

However, testing the products is essential to ensure that the inventory you’ll order matches your required specifications.

5. Order Your Inventory

After testing the samples and choosing the wholesalers that provide the best products, it’s time to order your inventory.

Whether the wholesalers are local or international, you need to understand all the terms and conditions of getting supplies from them.

You also need to calculate all the costs associated with the process.

This includes shipping fees, taxes, and other expenses you might encounter when dealing with those specific wholesalers.

6. List and Market Your Offerings

Once you’ve received the inventory, it’s time to list them in your store.

This can be only an online store, or you can sell in a physical store as well.

To sell in a physical store, you need to pick an accessible and attractive location.

For online stores, you can launch your website or sell on social media.

Selling on Poshmark or Amazon are good choices as well.

Whatever the store location you’ll pick, marketing your products can make all the difference in your sales.

You need to set a marketing and advertising plan and budget.

Look for effective ways to advertise your clothing business both online and offline.

Things to Consider When Building a Clothing Business with Buying Wholesale

Here are a few considerations you need to be aware of when launching your clothing business:

Can You Run a Clothing Business with Buying Wholesale by Yourself?

Yes, you can run your clothing business by yourself if it operates on a small scale.

However, you need to be ready to take care of the different aspects of your business.

This includes managing the inventory, marketing the brand, and keeping track of financials.

Additionally, you have to provide the required support for your customers by answering their inquiries and handling their complaints.

How to Handle Shipping?

You need to create a list of all the well-reputable shipping service providers to pick one to take care of your fulfillment work.

Select the provider that can provide decent quality service in terms of speed, cost, and customer support.

How to Price Your Products?

Pricing can be challenging, especially for beginners.

So, you need to be careful when pricing your products.

To make the best possible pricing decisions, take these aspects into account:

• The total cost of the products
• The needed profit margin
• The prices of different competitors

INSPIRATION: Clothing Business with Buying Wholesale Ideas

If you’re looking for business ideas similar to help you decide on the type of clothes you’ll sell, here are some:

• Plus Size Clothing: The market is growing fast as demand for plus size apparel increases.
• Maternity Clothes: Many pregnant women search for comfortable and stylish clothing. Maternity wear is a lucrative niche with a market expected to achieve 4.4% annual growth.
• Cultural Clothing: You can target certain cultural groups in the US, like Asian or African,  and sell them their original hometown apparel.

Frequently Asked Questions

Similar Businesses to Consider Starting

If you’re looking to launch a fashion business similar to this one, these posts can come in handy:

• How to become a personal stylist online: This guide provides actionable steps to kick off a promising career as a personal stylist.
• How to start a clothing business: Whatever type of apparel business you want to start, this post includes all the guidelines you need.
• How to start a boutique business: If you’re interested in running a highly specialized apparel business, this guide will help you begin your clothing boutique.

Wrapping Up

Purchasing wholesale clothing is one of the best strategies to achieve profits by “buying low, selling high.”

With good management of your apparel business, you can achieve immense growth.

Please let us know in the comments if you have any questions or thoughts. Share this post with someone interested in starting a clothing business.