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How to Start a Small Clothing Business From Home In 6 Simple Steps [2023 Update]

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Do you want to sell clothes or start your clothing line but don’t know where to begin?

Starting a clothing business can be challenging and costly due to the competitive fashion world.

However, technology now enables anyone to launch a fashion business idea, thanks to e-commerce platforms and social media.

If you want to launch your online store, this guide breaks down how to start a small clothing business from home in six simple steps.

With this guide, you’ll be well-equipped to run an online business, from crafting a clothing line business plan to marketing your clothes.

How Profitable Is Owning a Small Clothing Business From Home?

The clothing industry is a competitive market, but it offers a large consumer base globally.

Despite the pandemic’s impact on retail, the apparel market gained approximately $1.53 trillion in 2022, and the Consumer Market Outlook foresees this amount increasing to $2 trillion by 2027.

Since clothing is a basic need and never goes out of fashion, tapping into this market is lucrative.

Regarding profit, ZipRecruiter reports that boutique owners generally receive an income ranging from $32,000 to $160,500 annually in the US, with incomes reaching as high as $248,500 per year.

Industry analysts say that the retail industry has 4-13% profit margins.

However, it’s 4.54% higher than the industry average.

Ultimately, the high demand for clothing, especially trendy products, makes these numbers possible.

What You’ll Need to Start a Small Clothing Business From Home [& Associated Costs]

Even if you’re selling clothes online, you must prepare the required documents and the fund needed for your products as well as marketing and advertising efforts as a business owner.

You’ll need the following to set up your business from home.

1. Business Registration

Choose your business type and small business name, and have it registered. The cost depends on your business structure and state.

Cost: $5 to $100.

2. Trademark Registration:

Register your name with the US Patent and Trademark Office to avoid having others get the same name and keep your brand unique. Making your brand a trademark also allows you to sue others for infringement.

Cost: $250 to $750.

3. Bank Account

Separate your personal funds and expenses by creating a business bank account. Depending on your bank, you’ll usually need to pay monthly fees and maintain a minimum balance of around $1,500.

Cost: $10 to $50 per month.

4. Manufacturing

Find and work with a manufacturer to produce your garment products. The cost greatly varies depending on fabric type, trims, labels, packaging, shipping, and more. Cost: $500 to $1,000.

5. Website

Building an online store requires you to set up and pay for a domain name, hosting site, SSL certificate, and other e-commerce functionalities.

Many platforms offer free plans, but you must pay for more premium features, especially if you want to scale your website.

Cost: around $1,000 to $100,000 per year.

6. Sales, Marketing, and CRM Software

Invest in sales and marketing software to turn a potential customer into a buyer.

These include software for SEO, CRM, email marketing, content marketing, social media, analytics, and Google Ads.

Cost: $2,000 to $50,000 per year.

7. Business Insurance

Your small business may be online, but you must still protect your company as you invest time and money.

The types of insurance include general liability, business interruption, cyber liability, and more.

Cost: $14 to $340 per month.

Do I Need a License or Certificate to Start a Small Clothing Business From Home?

Yes, but you’ll need fewer requirements to operate your online store legally. This includes a general business license and a sales tax license.

Check with the Small Business Administration (SBA) to ensure you have all the licenses and certificates required in your city or state.

Why You Should Consider Starting a Small Clothing Business From Home As a Side Hustle

An online clothing business at home makes a good side hustle since you can manage everything at home.

Plus, here are other perks:

  • Sell worldwide: Reach a global target audience, tap into various customers and markets, and increase your sales.
  • Work anywhere, anytime: Manage your online business anywhere in the world via your laptop, and set your own work time.
  • Start with a low budget: Pay a lower upfront investment than starting a brick-and-mortar store. 
  • Grow your business easily: Expand your operations easier since you don’t have offices or physical stores to build.

How to Start a Small Clothing Business From Home in 6 Simple Steps

vector graphic showing an illustration of a woman learning how to start a small clothing business from home

Starting a clothing business is quick and easy with the proper guidance.

Here are six steps to starting your clothing business in the comfort of your home.

STEP 1: Understand Your Market

If you have no background in starting a clothing line or running a business, start by researching the industry’s target market.

Creating market analysis and research will give you insight into the consumer’s needs and preferences.

It’ll also help you see a product’s viability and learn about the different niches, like print-on-demand t-shirts and baby clothing.

You can conduct research by reading trends online, studying pricing strategies of big brands and competitors, and conducting surveys, interviews, or focus groups.

The goal is to see what potential customers want and what you can give.

STEP 2: Determine Your Business Model, Niche, and Products

After identifying your target market, their needs, and your unique selling proposition, draft a business plan detailing your full business strategy, model, niche, and products.

Choose from various business models for a clothing line like private label, print-on-demand, wholesale clothing, and dropshipping business model.

You can also design and make your own fabric and clothes for your online clothing store.

However, this option takes more time, work, and budget to build your clothing line.

Finally, specify the niche and products you want to sell according to your business model.

The industry offers a range of niches, from infant wear to costumes, so determine the clothes you want to sell to set you apart.

STEP 3: Accomplish All Legalities

Once you finalize your plan, register your clothing company name, and accomplish all licenses, permits, and certifications required by your city or state’s laws.

Note that your company structure (e.g., sole proprietorship, partnership, or corporation) will determine the requirements and process of obtaining all necessary legalities.

Also, remember that these requirements come with a fee.

Nonetheless, it’s a tedious but crucial step to comply with the law and operate your clothing line legally.

STEP 4: Find and Work With a Clothing Manufacturer

Finding a good manufacturer is crucial to a successful clothing line.
When contacting suppliers, consider whether you want to work with a local or overseas manufacturer.

Local suppliers usually produce high-quality materials and clothing at high costs, while overseas suppliers produce basic quality at affordable prices.

You can find domestic and foreign manufacturers on online directories, like Maker’s Row and Kompass, Facebook groups, industry meetups, and search engines.

Contact as many clothing manufacturers as possible, and compare each before choosing a manufacturer.

Also, always ask for a sample to see the quality you’ll be selling online.

STEP 5: Hire the Right People

Unless you’re confident in doing everything independently, hiring the right people makes it easy to delegate work, run your online clothing store, and scale it.

You can start hiring while setting up your clothing brand, so your team can help you launch it.

To hire the right people, take the recruitment process seriously.

Look for candidates with a proven track record and good character. However, remember that hiring seniors can cost a lot.

So, consider hiring someone with good background and potential that’s within your budget.

Ideally, form a team that can help your own clothing line grow.

STEP 6: Start Selling Your Products

Your sales and marketing strategy helps establish your business name and store’s unique brand identity, reaches your market, and drives sales.

When planning your sales and marketing strategies, consider the platforms or channels you’ll use to target customers.

Will you only sell on your own website or also tap online selling platforms, like Facebook Marketplace?

Also, utilize social media advertising, influencer marketing, and paid advertising wisely to drive consistent traffic, increase sales, and build a solid customer base for your online clothing business.

Things to Consider When Building a Small Clothing Business From Home

Before starting a clothing line, consider asking yourself these questions.

Can You Run a Small Clothing Business From Home By Yourself?

Can you handle being a sole proprietor?

Managing a business requires juggling multiple roles and responsibilities.

Without the right help, your clothing company could fail quickly.

So, consider your capacity and capability before establishing a company.

How Much Money Are You Willing to Risk?

When creating your business plan, think about how much you can shell out upfront and the amount you’re willing to lose.

Also, consider if you need a business loan to kickstart your company.

Will You Create Your Products or Resell Clothes?

Do you want to design and produce your clothes or dropship ready-made clothing? Your answer will influence your target market, operations, budget, hiring, and marketing plan.

How Much Time Can You Devote to Running Your Business?

Since you’re working from home and you’re your boss, how many hours can you give to running your business?

Moreover, if this is a side hustle, consider how you’ll manage your time, workload, and a full-time job.

INSPIRATION: Small Clothing Business From Home Ideas

Check out these examples to inspire you.

  • Clothing Rental: It provides rentals for formal outfits, costumes, casual wear, uniforms, or special occasions. It’s a small-scale business you can do at home part-time or full-time.
  • T-shirt Printing: This business focuses on selling print-on-demand t-shirts. Custom-printed shirts have high demand and are available for dropshipping, making them accessible and profitable.
  • Thrift Clothing: It involves selling used but well-maintained clothing and clothing accessories. It can be operated via an e-commerce platform and has a growing market that prefers sustainable fashion.

Frequently Asked Questions

Can Selling Clothes Make Money?

Definitely. An online clothing boutique owner can earn an average of $6,680 per month.

Plus, the industry’s large market creates a high demand for all clothing items, especially trendy ones, making it easy to make money from clothes.

Is a Clothing Business Profitable?

Yes. Thanks to e-commerce platforms, social media, and digital marketing channels, it’s easier to reach your target audience and sell your clothing line.

In fact, global social commerce sales in the fashion industry are estimated to reach $600 billion by 2027.

Similar Businesses to Consider Starting

If a clothing brand doesn’t suit you, consider choosing a different fashion business like the following:

Wrapping Up

Starting an online clothing store can be challenging, but these six steps above will walk you through the different aspects of running a fashion brand.

If this guide was insightful, don’t hesitate to let us know in the comments or share this article with others who might need help.

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