Many people wonder how much it would cost them to start their own activewear brand. We see many misleading articles on the internet telling people they could start with as little as 200$ or 500$. Unfortunately, these kinds of articles have caused way more harm than good to the people who read and believed them.
We also would like to point out that even people who decide to properly invest in their activewear brand may find themselves consistently falling into the sunk-cost fallacy and keep throwing their money into a bottomless hole with nothing to show for it.
This happens when you do not have your priorities in order and accept random bad advice on the internet. But do not worry, for we have come to you with the best advice possible based on our years of experience in the field.
In this article, we will share some information that we hope would give you a background and an understanding of how much it costs to establish an activewear brand in 2023.
Yet, answering the question of how much it costs to start your activewear brand is more complicated than simply writing down a number.
The answer depends on many factors relating to your specific niche, such as quality and features, and depends on your location.
But before we get into the expenses, one has to have a very clear picture of the market’s landscape. From the competition to target customers to determining what would set your business apart…etc.
If you are still in the process of figuring these things out, we recommend that you check out some of our articles that would help in guiding you in this process before reading this piece.
Now that you have a clear plan and have answered the primary questions about your business, we can now move forward with determining the expenses you would need to start your activewear brand. Notice that we will limit the discussion to only the things you need and cannot do without.
Design
Before you go to any supplier and before you start ordering, you need to have a comprehensive and detailed tech pack of your designs. Tech packs are also known as specification sheets. Your tech pack MUST be very detailed and include BOM (Bill of Material), grade, trim, pantones, sourced fabrics and trims, stitch method and construction. If your tech pack lacks details, no factory will consider working with you.
Why? Because factories like to quote a price and create a sample quickly. And in order to do that, they do need a very detailed tech pack. They do not want to spend time guessing the customer’s intention, because if they guessed wrong, then they would have wasted time, and time is very valuable! They say it is money!
So factories like to work with people who present them with detailed tech packs. This also shows them that the customer knows what they want and that they are serious about their business.
Moreover, whoever is going to create the designs and tech pack NEEDS to know which factory is producing the products, their capabilities and their skill base.
This person also needs to have a good idea of the costs for fabrics, trims, labour and components and creates the designs based on your desired RRP (Recommended Retail Price). Otherwise, you may end up with a nice design that would never become a marketable product.
For this, you need a designer with a good experience in the market. It often happens that people would hire a freelance designer and end up with a pretty design that cannot be sold to the target customers.
Supply
We can see from the prices above that the complexity of the design and the manufacturer’s location matter in creating the sample.
This may come as a shock but one of the main expenses of your activewear business is the goods you will be selling! Joking aside, this particular expense needs to be carefully considered because you need to have an edge over established brands.
Here we can see that the myth about starting with a very small budget crumples so easily.
Why? Because in order to compete with established brands, your price must be at least close to theirs. But factories have MOQs (Minimum Order Quantity). This means that the larger the quantity you buy the lower the price you get. So when you start with a very small investment, even if you get the same product as the established brands but you will pay a high surcharge. The difference may even be double or triple the price they are paying so pay attention.
You will probably face that regardless of your starting investment, but it will be worse if you start very small. The solution to this problem is to not compete directly with established brands but instead, find another angle to steal their customers.
Marketing
We reached the final point on which you need to spend money. Marketing may seem like a no-brainer to some. But you would be surprised at how many people neglect it and mess it up. Well, to be honest, it may not be that simple. So let us break down what you need to do so that you may spend as little as possible.
First, you need to design a website. A simple wireframe sketch of what you want the website to look like would do just fine. You may want to check platforms like Shopify and WordPress. These platforms will save you a lot of time, effort, and money.
Next is determining your marketing budget. You need to advertise your products on a regular basis. We suggest allocating 20-30% of your predicted turnover for marketing the brand in the first few years.
Marketing your brand and building the website need to be done by someone who understands your brand and has prior experience.
Conclusion
The above costs and expected revenue are an example of a business that chose, on average, the cheapest options possible.
We have limited the spending to only 3 essential points. And that is why it is highly recommended to not choose the cheapest options in at least these 3 areas. As we have said before, the cost will definitely vary depending on many factors related to the business vision and goal, but we hope that this article has shed some light on the costs you will need to consider more carefully.
