How to start a clothing brand: steps, label rules and costs

How to start a clothing brand in eight steps

A clothing business, fashion brand or streetwear brand starts in the same order, from the idea to the first sale.

1. Pick a niche you can describe in one line

   Decide who the clothes are for and what sets them apart: a fit, a fabric, a graphic style or a community. A narrow niche makes later choices easier.

2. Choose a production model

   Print on demand, decorated blanks or cut and sew. The table below compares what each needs before the first sale.

3. Order samples before you order stock

   Wear and wash every sample, and check the fit across sizes and how the print holds up. A fix at sample stage costs one garment instead of a whole run.

4. Register the business

   Pick a structure, file the registrations your state and city require, and get an EIN if you need one.

5. Label every garment

   FTC rules require most clothing to carry a label with fiber content, country of origin and the identity of the manufacturer or another business responsible for marketing or handling the item, plus a care label. The label section below lists the details.

6. Price from your real costs

   Add the garment, decoration, labels, packaging, shipping and platform fees for one unit, then set a price that leaves a margin.

7. Pick where to sell

   On your own store you find the shoppers yourself. A marketplace has its own shoppers and takes a larger share of each sale, as the fee table below shows.

8. Launch with a small drop

   Release a few designs in a limited size run and reorder only what sells.

How to start a clothing line: three ways to make the clothes

The production model decides how much money you need before the first sale and how much of the garment you control.

The label rules apply whichever model you pick: they cover anyone who manufactures, imports, sells, offers to sell, distributes or advertises covered products. A print partner or factory may sew the labels in, but as the seller you are still covered.

The labels every garment needs

The FTC enforces two sets of label rules for clothing. Under the Textile and Wool Acts, most clothing needs a label listing fiber content, country of origin and the identity of the manufacturer or another business responsible for marketing or handling the item. The Care Labeling Rule adds care instructions.

• Fiber content: generic fiber names with percentages by weight, in descending order of predominance. Percentages may be off by up to 3%, but there is no tolerance when the label states the product contains one fiber.
• Country of origin: an imported garment names the country where the product was processed or manufactured. On a garment with a neck, the origin goes on the front of a label at the inside center of the neck.
• Made in USA: a label may say Made in U.S.A. only if the product is made completely in the U.S. of U.S.-made materials. A shirt sewn in the US from imported fabric needs a qualified label such as Made in U.S.A. of imported fabric.
• Who made or sells it: the label carries either the company name or the Registered Identification Number (RN). A name has to be the full name under which the company does business; it cannot be a trademark, brand or designer name, unless the company does business under that name.
• Care: the care label is attached permanently and securely, stays legible during the useful life of the product and gives at least a washing or drycleaning instruction. The FTC requires a reasonable basis, meaning reliable evidence, for every care instruction and warning, so wash-test samples before you write the label. Care labels are not needed on shoes, gloves and hats.
• Language: required disclosures are in English.

Online product pages have a rule of their own: each description needs a statement that the product was made in the U.S.A., imported or both.

An RN is a number the FTC issues that a label can show instead of your business name. The FTC says an RN is not required to do business in the United States, and RNs are not issued to businesses based outside the United States.

Flammability and children's clothing rules

The CPSC's clothing rules start with flammability. The standard for clothing textiles is 16 C.F.R. part 1610, and it covers all wearing apparel, except some hats, gloves, footwear and interlining fabrics. Under it, Class 3 fabrics are prohibited for use in clothing.

Two groups of fabric are exempt from testing: plain surface fabrics weighing 2.6 ounces per square yard or more, and fabrics made only of acrylic, modacrylic, nylon, olefin, polyester, wool, or a combination of these. The CPSC notes that the exemptions remove the testing requirement, not the flammability requirement. It also lists terry cloth, fleece, corduroy and flannel as common raised surface fabrics, so a cotton fleece hoodie usually fits neither exemption.

For adult clothing, the maker or importer needs a General Certificate of Conformity (GCC), but adult clothing does not need to be tested at a third party, CPSC-accepted lab. Under a CPSC policy statement, CPSC will not pursue firms that do not issue a GCC for adult apparel exempt from testing.

Children's clothing has stricter rules. A children's product is one designed or intended primarily for children 12 years of age or younger, and clothing for that age range must meet these requirements:

• Testing: children's clothing must be tested by a third-party, CPSC-accepted laboratory.
• Certificate: a Children's Product Certificate (CPC) issued by the domestic manufacturer or importer.
• Tracking labels: permanent marks on the product and its packaging that show the manufacturer or private labeler and the date and place of manufacture, among other details the CPSC lists.
• Lead: paint and coatings are limited to 90 ppm lead, which covers painted buttons, zippers and snaps, and printing that hardens on the fabric, such as screen printing. Accessible parts are limited to 100 ppm total lead, though textiles are not required to be tested for total lead content, unless treated with something other than dyes.
• Drawstrings: hood and neck drawstrings on children's upper outerwear in sizes 2T to 12 are a substantial product hazard. Waist and bottom drawstrings are limited to 3 inches outside the channel, in sizes 2T to 16.
• Sleepwear: children's sleepwear, other than infant and tight-fitting garments, has its own standards: 16 C.F.R. part 1615 for sizes 0 through 6X and 16 C.F.R. part 1616 for sizes 7 through 14.

If you plan kids' sizes, get a quote from a CPSC-accepted lab before you order stock.

Register the business, protect the name and check sales tax

The structure, state filings and local licenses for a clothing brand depend on where you live. Rules vary by state and city, and this section is general information, not legal or tax advice.

An EIN from the IRS is free, and the IRS warns that you never have to pay a fee for an EIN.

Registering a trademark is not required; a registered mark gives broader rights. The USPTO's base application fee is $350 per class of goods or services, and additional fees may apply based on the completeness and complexity of the application. In the USPTO's own example, golf shirts, dress shirts and t-shirts fall under one class, while a clothing line that also offers custom t-shirt printing pays $700, $350 for each of two classes. TM may be used for goods even before an application is filed.

Check how your state taxes clothing before you set prices. New York shows why: clothing and footwear sold for less than $110 per item or pair are exempt from the state sales tax, but local sales taxes still apply unless the county or city elects the exemption. Check also whether you need a seller's permit before you start selling.

How much does it cost to start a clothing brand?

The cost depends mostly on the production model. Example figures in the table are labelled, use stated assumptions and are not supplier quotes.

Example: a print on demand start with the five samples above and one month of Shopify Basic needs $125 plus $39 a month before the first sale.

How to start an online clothing store: what each platform takes

Example: one $40 t-shirt sold online, at each platform's published rates.

Platform rules that matter for a clothing brand

A few platform rules beyond the fee on each sale change which one fits a new brand.

• Etsy's Offsite Ads charge a standard 15% on orders they bring in, and shops under $10,000 in sales over the past 365 days can opt out.
• Depop has zero selling fees, but US sellers pay 3.3% + $0.45 for processing, and a 12% boosting fee can apply when a boosted listing sells.

Where Nation fits

Questions about starting a clothing brand