How to Start a Clothing Line in Canada? A Guide for New Designers
The Canadian apparel market is estimated to go beyond $28.5 billion in 2024.
Getting a piece of this market pie sure seems promising. And if you’re a fashion guru, it is probably your dream job as well.
We’ll go through every tiny step on how to start a clothing line in Canada, explaining the benefits and downsides of this career opportunity.
Let’s dive in!
How To Start a Clothing Line in Canada?
Before you get down to the details and actual sewing, you must take a few other steps.
Understand Your Niche
Understanding your consumer’s habits and needs is an important part of your niche.
This can be done by observing the work of some of Canada’s most popular clothing brands. You can even check your nearest potential competition and learn from their shortcomings or implement some of their successful strategies. They’ve already achieved what you’re about to, so it’s a great starting point.
Additionally, you may find useful information on your specific industry niche by reaching out to some popular market research companies from across the globe.
Do Pre-Demographic Research
Doing deep background research on your potential customers is crucial to your business plan. Think about their budget and how you can cater to their spending limits and shopping behaviour.
An important aspect of your research should be your consumer’s habits. Is your target audience shopping online or likes the old-fashioned way of trying out clothes? Considering around 75% of Canadians turned to Ecommerce in 2022, the thought of selling clothing online in Canada sounds rather promising.
Develop Your Creative Skills
Creativity is a must-have skill for fashion designers. But designing your own iconic style can be a bit difficult with the massively expanding market. Instead, you can also find inspiration in other trends and designer brands that thrive to be the next big thing.
Inspiration can’t be pushed, it’s rather something that needs to come naturally. But despite this, push yourself to start drawing some designs and work on your sewing skills.
Make A Business Plan
Making a business plan is essential in building your own clothing line business. Here are the most popular business models in the apparel industry, rated from lowest up to the highest costs:
- Print on demand
- Wholesale / Private brand
- Clothing manufacturer for a small business (custom cut-and-sew)
- Drop shipping
Some of these business models can’t operate without a retail shop or boutique, so you’ll have to consider all the additional expenses, such as rent.
On the other hand, a drop shipping service or a print-on-demand online boutique will require home employment tax in addition the regular sales tax.
Choose Your Clothing Items
Despite your wish to sell different types of clothes and make an overall style imprint on the world, you should think about starting small. Pick a collection of products easy to sell online, for example, something that doesn’t require fitting. As your store progresses, you can add more items.
On another note, selling seasonal items is not the greatest idea, as you can only make profits during a specific season. Instead, opt for selling essential pieces of clothing that are in demand all year round.
Build Your Brand
Building a brand means thinking about your brand’s values and putting them on paper. What’s your mission? Are you standing for reducing carbon emissions? Do you create apparel from sustainable and eco-friendly resources?
Figuring out what you stand for and your setting brand guidelines will help retain your customers after discovering what you stand for. The same goes for potential business partners.
Furthermore, these brand guidelines are the starting point of your future marketing campaign, website design and will set the tone of your social presence and behaviour.
Register Your Business
Taking care of the necessary paperwork before actually selling is your next step. Here’s what you need to do to register your business in Canada.
- Choose your business entity type – will your store exist as a sole proprietorship or a partnership? Do you plan on expanding as a corporation, or is a company with limited liability enough?
- Register your business – the documents needed for the registry will vary depending on the entity type and the province/territory of your stay.
- Get permits and licenses – a general business license is absolutely necessary, but if you’re going to operate your business from home, you might need additional permits and cover your home business tax expenses.
- Get an employee ID number (optional) – If you’re registering a business that sells cross-borders, including the USA, you must obtain an EIS with the American IRS.
Design and Develop the Clothes
Once your licensing is all set up, it’s time to get down to business and design your pieces. When it comes to production, you can choose from two options:
- In-House production is when you set up a home-based studio and work by yourself or hire a small team. Make sure to always have enough room and storage, and make it a bundle of inspiration by adding design prints and inspiring designers on your walls.
- Clothing manufacturers are usually the best if you plan on increasing your output or starting out big. This option will cost you more since you pay another factory and order designs. The best idea is to seek an offshore manufacturing facility, where the workforce is cheaper than in Canada.
However, if handmade components are the key to your brand identity, you will always be directly involved in producing your clothes, even when you start outsourcing and expanding.
Pitch To Retailers
Selling your products and brand designs to other retailers is a stepping stone for small clothing brands. Pitching to retailers in fashion includes two basic approaches:
- Consignment – If you’re trying to put your brand name out there, this is the step to take. It’s a way easier and less risky option than wholesale, because the retailer doesn’t purchase your products upfront. However, in this case, you only get paid when your product gets sold.
- Wholesale – This concept allows a retailer to buy your products at a wholesale price. The buyer is, however, limited to a number of product pieces, and they obtain it upfront and later sell it. In this case, the risk is on them, but you are also selling for less.
Make a Brand Website
Whether you want to sell clothing online in Canada, or even consider opening a physical store, a website is your key footprint in the digital society we live in.
Whether you’ll be selling directly through the webpage, or selling in physical stores or other marketplaces, your website will build customer loyalty. Buyers want to know who they are buying from, and your brand’s webpage will give some confidence and help buyers get familiar with your brand’s idea.
Additionally, it can help expand the reach of your clothing line. By having a central location for all information regarding your business, buyers can easily access your products and be alerted on new products and sales.
Launch and Promote Your Brand
Now that you learned how to start a clothing brand, it’s time to launch it. Here are the basics.
- Social Media
Being present on Instagram and Facebook is a must. However, Twitter and TikTok have also been gaining popularity in the digital marketing world. Still, juggling multiple social media posts might be overwhelming, so it might be better to have someone do it for you in the beginning.
- Market Your Brand
Marketing and sales are the most common challenges of an online business. Especially in the oversaturated fashion industry.
This is why it’s more important to have a clear value proposition that will help in defining your ideal customer base. Then, you can use content-driven marketing and keyword optimization to answer their needs.
- Take Good Photographs
A picture of your apparel will attract the most customers. This is why it is important to make it stand out and give it a retouch. To get the best results, invest in a professional camera or phone.
Creating a strong marketing campaign is a critical element of running a clothing business. That said, the best move is to start promoting your business before launching it to draw the most attention.
Open a Retail or Pop-Up Store
One of the first things you’ll need to do is find a suitable location for your shop. If you’re going with a brick-and-mortar shop, you’ll need to find a place that is large enough to accommodate your inventory and has enough electrical outlets.
If you’re opening a pop-up store, you should be on the lookout for an easily accessible and visible location.
Physical stores cost more than a pop-up or an online store. Nevertheless, some customers prefer the in-store shopping experience, as they can try on their favourite designs on the spot and find their perfect size without bothering with returns.
How Much Does it Cost To Start a Clothing Line in Canada?
If you’re not careful, the overhead costs of starting a clothing line can quickly eat into your profits.
When you sew your own clothing that is made-to-order, you don’t have to keep a lot of inventory on hand. Although, it’s important to invest in equipment (like sewing machines, needles and strings..,) and buy large quantities of fabric, to be more cost-efficient in the long run.
Other associated costs include shipping materials (envelopes, notes, packing style), labour and production costs.
That being said, labour and production costs will vary mostly on the fact whether you’ll be involved in hiring manufacturers from the very beginning. This will seemingly increase your overhead expenses, considering you’ll have to pay for the overall production and the employees in the manufacturing facility.
On the other hand, if you want to start a boutique, you will pay fewer employees, but more for rent, heating and electricity.
But the highest cost of starting your own clothing line in Canada is the marketing expenses. The pre-launching and overall marketing campaign of your brand may cost anywhere between $3,000 to $15,000.
Here is how much starting a clothing line in Canada usually costs.
|Clothing Line Size / Business Model||Startup Costs|
|Small Line or Print-on-Demand Store||Up to $500|
|Medium Sized Clothing Line||$1,000 – $5,000|
|Private Label Clothing Line||Starting from $2,500|
|Custom Cut and Sew Clothing Line||Starting from $10,000|
|Large Clothing Line (with manufacturing costs)||$25,000 – $50,000|
To make the most out of your business, it’s best to start small in order to get rich progressively.
Advantages of Starting a Clothing Line
Aside from doing what love and designing your own clothes – there are numerous advantages of starting a clothing line in Canada. Let’s check them out!
Work From Home
Did you know that the average Canadian office lease rate is above $18? Working from your home and avoiding the high rents and electricity bills is a plus if you’re considering to start selling clothing online in Canada. You can find everything you need in your home – a PC and a stable internet connection.
Unlimited Income Potential
One of the best things in the clothing industry is that there are no limits to how much you could make. If you build strong business skills and invest enough money, time and energy into your business, you’ll earn much more.
Be Your Own Boss
If you’re striving to make it on your own instead of selling your designs, fashion is a promising niche.
With the expanding global marketplaces come endless income opportunities and business ventures, and you can take advantage of them by yourself. What’s more, you are going to be in charge for all operations and manufacturing, as well as the creative process. Sounds liberating, eh?
Sell Your Products Through Different Channels
Your website isn’t the only place people can buy your product. Aside from various advertising ways on social media, you can also partner with an online marketplace, such as Shopify, Kijiji, AliExpress, Wish and many more.
These advanced selling platforms can guide you from opening your virtual store to placing photos of your items and entering prices – all the way to shipping and returns.
Disadvantages of Starting a Clothing Line
Selling clothes and running your own clothing line also have their downsides.
Many people dream of opening their own clothing boutique. However, the oversaturation of the fashion industry can make this a challenge.
There are already a lot of clothing stores trying to succeed, and you’ll need to work hard to stand out from the crowd. It sounds almost impossible to create a style on your own which won’t be compared to something that already exists. Plus – be prepared for tons of negative commentary on social media.
Hefty Self-Employment Taxes
Tracking your income and expenses is the most important thing if you’re self-employed. It’s because of the self-employment taxes, which can be deducted.
However, this can only happen if you work with no profits. If you were successful, however, the CRA will take a greater portion of your profits compared to the ones you would pay as your income as an employee.
On the other hand, filing your taxes with NETFILE can be easily done from the comfort of your home.
Lack Of Income Consistency
Running a clothing business can earn you an entire paycheck in a single day, and even more. However, there will be days and probably even months when you’ll struggle to make ends meet.
So if you’re already aware of this and determined to run your own business, prepare to plan things in advance to avoid going bankrupt.
High Overhead Costs
Starting a clothing line can be a costly endeavour. Not only do you have to design and produce the clothing, but you also have to find a way to get it into the hands of consumers. With so many clothing brands competing for attention, it can be expensive to make your voice heard.
Additionally, most clothing brands rely on brick-and-mortar stores to sell their products, factoring in the cost of renting retail space, as well as the cost of hiring staff to man the store.
There are many things to consider if you think about how to start a clothing line in Canada. From choosing your name and developing branding ideas for your clothing items, up to documents and licensing – it’s a lengthy process.
However, it can all be done from the comfort of your home, without strict working hours and a tense working environment. And modern tools like Shopify will make the journey from fashion to monetization smooth and silk, helping you to place, advertise and sell your products.
After getting all your licenses and figuring out your initial material and equipment costs, the most important thing about starting a clothing line from home is putting up a website and selling on popular marketplaces.
Drafting a business plan and choosing a location which would be available to visitors and inexpensive is the first step in starting a boutique. If you’re not going to sell any of your handmade crafts, you should also pick a manufacturer or designer.
One of the best ways to start a clothing line with a small or no budget is by using the print-on-demand dropshipping method because you only pay for a product when a customer orders something, and there’s not much financial risk involved.
Typically, luxury brands are synonymous with high-end, expensive items that aren’t necessary but give the appearance of rarity, exclusivity, and prestige. So, start designing pieces that are very distinctive from what you see in casual boutiques and use quality materials like silk or cashmere.
Thorough research on the apparel and fashion industry, your competition and your targeted audience are the key steps to gaining some experience before starting your own business.