How to start a hat business: blanks, decoration and costs

How to start a hat business

A hat business sells caps, beanies, bucket hats or other headwear under its own name. Decorating blank hats bought from a wholesale supplier is the cheapest way in, because it needs little money and no pattern work. Cut-and-sew hats, made in a factory to your own shape, fabric and labels, come later, once a few designs sell.

The steps below are the hat-specific part. Naming the brand, registering the business and setting up sales tax work the same way as for any clothing brand.

1. Pick a hat style and who it is for, such as dad caps for a running club or beanies for a ski town.
2. Choose blank hats or cut-and-sew production.
3. Choose how the design goes on: embroidery, a patch or a print.
4. Order samples in each closure and size you plan to sell, and wear them.
5. Check whether any label rules apply, which depends on the fiber and on whether the hat is for children.
6. Price from your real cost per hat, including decoration, labels, packaging, shipping and platform fees.
7. Launch with a few designs in one or two colors, and reorder what sells.

Blank hats or cut-and-sew: how to start a hat brand

The first choice for a hat brand is where the hat itself comes from. Blank hats are finished hats from a wholesale maker that you or a decorator then embroider, patch or print. Cut-and-sew hats are made to your own specification, from the crown shape to the fabric, the brim and the inside tape.

Blank hats let you test designs with small orders and no pattern work, but your hat looks like other brands' hats with a different logo. Cut-and-sew gives you a shape and details nobody else has, at the cost of factory minimums, longer lead times and money paid before anything sells.

Ask any blank supplier for its spec sheet. It lists the fiber content, the crown profile, the closure and the panel count, which you need for your listings and for any wool label.

Embroidery, patches and prints: decorating hats

Decoration is where a blank hat becomes your product. Embroidery and patches need a setup step before the first hat, so the cost per hat falls as the order grows.

Embroidery needs your artwork converted into a stitch file, called digitizing. Ask each decorator whether digitizing is a one-time charge per design and how the stitch count changes the price per hat. A small logo with few colors costs less to stitch than a large filled design. Ask for a sewn proof before the full run, because thin lines and small text can blur in thread.

Patches suit a new hat brand because one patch order covers several hat styles and colors. You can sew or press them onto blanks as orders come in, instead of embroidering a full run of each color.

Hat sizing and closures

Fit is the main thing a buyer cannot check before a hat arrives. Adjustable hats are the simplest start, because one size covers most adults and you hold less stock.

Decide the crown height and shape for your customer, too. A low, unstructured crown reads casual; a high, structured front panel holds embroidery better and suits a streetwear look.

• Snapback: a plastic snap strap at the back. One size for most adults, and common on flat-brim and trucker hats.
• Strapback: a fabric or leather strap with a buckle. One size, and common on dad caps.
• Stretch fit: an elastic band sewn into the crown, sold in two or three ranges such as small to medium and large to extra large.
• Fitted: closed back sold in exact head sizes. The best fit, but you have to stock every size of every design.
• Beanies and bucket hats: beanies stretch to fit; bucket hats usually come in a few sizes, so list the head measurement for each.

Put a short measuring guide in every listing: measure around the head just above the ears and eyebrows, then match the number to your size chart. State the crown height and brim length so buyers can compare with a hat they own.

Label rules for hats

Hats are treated differently from other clothing under federal label rules. The FTC's Textile Act rules cover Clothing, except for hats and shoes, and the FTC lists Headwear, including hats, caps or anything worn exclusively on the head among the products the Textile Act does not cover. The Care Labeling Rule also exempts shoes, gloves and hats, so a hat does not need a sewn-in care label. This is general information, not legal advice, and rules vary by state and city.

Wool changes this. Hats are covered by the Wool Act and Rules if they contain any wool, so a wool beanie or a wool-blend fitted cap needs a label. Wool labels must identify fiber content, country of origin and either the company name or the Registered Identification Number (RN). The FTC issues RNs at no charge.

Made in USA claims are strict. Under the textile and wool rules a label may say Made in U.S.A. only if the hat is made completely in the U.S. of materials that were made in the U.S.. So a wool hat embroidered in the US on an imported blank cannot carry a plain Made in U.S.A. label; wording such as “Made in U.S.A. of imported fabric” shows the imported part.

Even where no label is required, most hat brands sew a woven brand label inside and add care advice to the listing. It tells buyers how to clean the hat and makes returns easier to handle.

Flammability and hats for children

The federal flammability standard for clothing textiles does not apply to Hats, provided they do not constitute or form part of a covering for the neck, face, or shoulders. A hat with a neck flap, a balaclava or a hooded scarf can fall back under the standard.

Hats for babies and children carry separate federal rules. A children's product is one designed or intended primarily for children 12 years of age or younger, and children's products are required to undergo third-party testing and to have a written Children's Product Certificate (CPC) demonstrating compliance. If your sizes, designs or listings are aimed at that age group, read the CPSC's list of children's product rules before you sell.

How much does it cost to start a hat business?

How much it costs to start a hat business depends mostly on the production method. Print on demand needs money only for samples. Decorated blanks need a first batch of hats and decoration setup. Cut-and-sew needs pattern, sample and factory minimum costs before any sale.

Example: with the figures above, a hat brand selling decorated blanks spends about $776 before the first sale, plus the store plan. A print on demand start spends only the sample cost.

Where to sell hats and what each platform takes

Example: one $30 embroidered hat sold online. Own stores such as Shopify and Big Cartel charge card processing, and you bring the shoppers. Marketplaces bring shoppers and take a larger share.

How to price a hat: a worked example

Example: an embroidered dad cap from the batch above costs $12, and shipping it in a mailer costs $5. Sold for $30 with shipping included, that leaves $13 before fees. On Shopify the card fee is $1.17, plus the monthly plan spread across all orders; on Etsy the fees are $3.30.

Example: the same cap from print on demand might cost $20 including embroidery, which leaves $5 after shipping and before fees at the same price. You hold no stock, but the margin per hat is much thinner.

How to start your own hat company: the shared brand steps

Starting your own hat company also needs the steps every clothing brand takes: a name you can use, a business registration, and a seller's permit if your state collects sales tax on hats. Check the name against federal trademark records before you order labels and patches, because both carry it. A federal trademark application starts at $350 per class.

Rules vary by state and city, so check with your state revenue agency and local business office. This is general information, not legal or tax advice. The clothing brand guide in the Start section covers these shared steps in full.

Where Nation fits

Questions about starting a hat business