How to Start Clothing Business in India 2021 – Best Strategies to Execute the Business

How to Start Clothing Business in India 2021

India is going to become the Sixth Largest Garment Manufacturer Industry holding country in 2022 by touching the market worth of $59.3 Billion and it’s a focused sign that anyone willing to start a business can jump into this with industry with certain strategies.

The Garment Industry is too large in itself, but the business model of the garment and apparel industry is too easy to understand.

Hence it depends on which kind of business you want to start in the Garment Segment, there are many segments like Men’s Wear, Women’s Wear, Kids’ Wear, and many more.

Garment business contains 4 Types of Business Nature, Manufacturing, Wholesaling, Retailing, and Reselling.

First, you need to select the type of business which you want to start, and then after you need to plan further for the selling and marketing strategies.

The scope of starting a clothing business in India is very broad, initially, you must concentrate only on one segment.

With a proper analysis of your interest, expertise, financial strength, backup, holding capacity, areas, and requirements, come to a conclusion that which segment is beneficial for you for now.

Having a stable expansion of the current segment of the clothing business, you can start with the other segment slowly.

For Example, if you decided to start the business of men’s garments, focus only on the men’s garment selling or manufacturing instead of including the women’s and kids’ garments.

As long as you achieve scalability and sustainability in the men’s garment segment, you can think about starting women’s or kids’ garment selling or manufacturing.

Manufacturing of Garments

How to Start Clothing Business in India

The garment Manufacturing Business in India requires a huge investment to start, as it consumes one-time investment and recurring expenses as well.

The location doesn’t matter for establishing the apparel-making business because you are not supposed to attract walk-in customers for your business.

You are supposed to manufacture the garments in bulk and export them to the wholesalers and resellers, so the location doesn’t matter.

But you need a space to establish the manufacturing unit, equipment, experienced employees, and CA for accounting and tax management.

Hiring a Marketing team is beneficial instead of doing the marketing yourself because you will be dealing with the buyers meanwhile.

In order to make garments, you must have a strong tie-up with the fabric provider and also must have an experienced team or person to choose the best quality, designed, and trendy fabrics.

In the current duration establishing a big customer base is not a big deal for the Manufacturer, you can tie up with B2B business sites that interact with the buyers on behalf of you.

Manufacturing of Garment business is a long-term investment business which will need the patience to get a proper revenue as a return profit.

Minimum Order Quantity

As you are going to deal with Wholesalers mostly and retailers a little bit, you are not supposed to provide a single piece to anyone.

To cover the profit and the making expense, you need to set a Minimum Order Quantity (MOQ)for each buyer.

For example, you will not be selling a lot of fewer than 500 pieces, because the profit margin per piece is not too much, you can not sell in a single piece entity.

Wholesaling of Garment Business

How to Start Clothing Business in India

If you have enough investment but not enough for establishing and running the manufacturing of apparel, you can execute the business of the Garments Wholesaling Business.

In this business nature, you are not supposed to invest the money behind experienced employees, and equipment for making garments.

Wholesalers purchase the bulk of garments from the manufacturers and sell them to the retailers in different cities.

Same as the manufacturing business you are not going to cover the walk-in customers, so the location doesn’t matter, but you need a wear house for storing the garments.

Achieving a big customer base is not a big deal in this business also, you can avail the services of B2B websites which are going to provide huge customers from all over India.

You are supposed to buy the package from them and against it, they will be forwarding you the potential customers as long as they receive any query regarding your products.

The profit margin per piece in the garment wholesaling business is quite minute but as you are dealing in bulk quantity, the overall amount of profit becomes very huge.

If you are going to deal with the local retailers, you have more chances to increase the revenue with the supply of the same quantity of goods.

In order to generate more revenue, you can provide the bulk of garments on credit with the terms of payment in some days like fifteen days, or thirty days, or you can set according to your ease or requirements.

But, you are not going to provide it at the same rate, if you are liberating the buyer in terms of payment period you can charge them some percentage as Interest.

For example, any men’s shirt which is costed by Rs. 250, and someone purchases the lot of 500 pieces with the term of paying the amount after 15 days.

In this case, you can offer a rate of Rs. 255 per piece instead of Rs. 250 because you are giving him 15 days to pay the amount and due to delay your money rotation will be stopped.

So in order to recover the money rotation of 15 days, you will be charging them Rs. 5 extra per piece.

If you charge them Rs. 5 as an interest per piece, the total amount of a lot will be 500 X 5 = 2500.

Minimum Order Quantity

Same as the manufacturing business, you will be dealing in a bulk lot, you will not able to afford the single-piece selling.

Per piece profit marting is minimal, so that you will have to set a Minimum Order Quantity (MOQ) for the garment wholesaling business as well.

If you are selling the garments to any outsider without any mediator, then ask for the advance payment first.

Registration of Your Business

The establishment of a business on a big scale requires registration with the government, you are supposed to register your business as a company by following certain steps by which you can keep your financial aspects clear.

Retailing Business of Clothing

How to Start Clothing Business in India

If you want to start a business as a Retailer, you will need a medium capital amount as an investment.

Retailing the business of Clothing is a very potential business in India, as it contains a profit margin of more than 40% per piece.

In order to start a clothing business in India as a Retailer, you must have a shop in a proper location.

Location matters a lot for the Garment Retailing business because you are going to target the walk-in customers to generate revenue.

Choose the best location for the shop, location must be in a populated place or in a clothing market, the selection of cornered area or outsider area will cause the loss of money and efforts.

Register Your Business on Ecommerce Sites

Spreading your business online is a very smart strategy to generate more sales with the existing aspects.

There are many Ecommerce sites that work for the other suppliers, they just drop-ship the products from suppliers to the customers.

Joining with Ecommerce sites does not cost a single rupee, hence you will be supposed to share the profit with them with some limit.

They call in for some percentage of the selling amount as their fees, which can be easily afforded by you.

The benefit of tieing up with an Ecommerce site is that you will be connected globally with India, and instead of selling the clothes in just your nearby territory, it will allow you to enhance your business over India.

Another and one of the most benefits to join with Ecommerce sites is that you will not be supposed to offer multiple clothes the customer to select just one.

Tie up With The Resellers

There are many people who are running the clothing business in India due to having insufficient investment capital.

They tie up with the Retailers and as long as they get orders, they ask for the piece to the Retailer and Retailer provide them a single piece them with reducing a very less profit of ownself.

By Reducing your little bit profit margin, you are going to generate multiple sales within a day.

You just need to provide the photographs of the latest clothes, and they will be bringing the potential customers for you.

In order to generate multiple sales, you should tie up with maximum resellers.

Reselling of Garment Business

How to Start Clothing Business in India

Investment can not be a barrier for those who are really willing to start a business if you do not have as much capital to start a clothing shop or become a wholesaler or establish a manufacturing unit, still you have one very great source opened.

The reselling business of garments is too profitable in the clothing business because it is having more profit with a minimal investment.

The Process of running Clothe Reselling Business is quite easy and for this business, your engagement with social media is too mandatory.

As a Reseller, you need to collect the catalog of the latest collection of garments for which segment you are working.

Share them with your regular customers via online apps like WhatsApp, Telegram, Facebook, and all other platforms on which you are running your clothing business in India.

In addition, share the collection on social media with the population who are not on your lists and make new customers.

As long as you receive any inquiry, attend it properly, if he or she places the order, forward the details to the seller or retailer instantly and tell him to dispatch the piece to your address.

Profit Margin and Expense

You are not supposed to invest a single rupee for shop rent, electricity, employee salary, equipment, or anything and that’s why you will not have to adjust a profit.

A shop retailer has to adjust all above expenses from the profit that’s why he has to keep the margin high, however, you won’t have to go on that way.

If the shop retailer adds 100 rupees as a profit on the purchase value, the net profit will be around 70 rupees because the rest of 30 rupees will be adjusted in the expenses.

Whereas, if you add 100 rupees on your purchase value of cloth as a profit, your profit value is net 100 rupees.

Delivery and Payment Collection

The payment system of this clothing business in India is too simple, you will collect the 50% payment while receiving the order and the rest will be collecting while dispatching.

As long as you receive the order, instantly forward it to the seller without the customer’s information.

After receiving the product, dispatch it to the customer adding the courier fees in his purchase amount, and send him a copy of the receipt with the tracking id.

As long as the customer receives the product dispatched by you, ask him to notify you about delivery.

Is clothing business profitable online?

Online Clothing business is totally profitable without a single doubt because by carrying your business online, you will be allowed to interact with the audience of entire India.
According to Statista, Online Apparel Industry became a very profitable business with a revenue of $90 Billion per year.
Your local audience is already covered by you, but with only consumption of the local territory audience, your business will be kept limited, and after some time it will get saturated.
Whereas, by enhancing the clothing business online, you will never come undersaturation, as you will be getting new customers day by day.

Conclusion on How to Start Clothing Business in India 2021

The clothing business in India is holding a broad business model to expand, you are supposed to start with a proper marketing strategy, inventory management, customer relationship, and financial backup.

During the upcoming future pandemic period, you may sustain without profit or running a business, so if you are going to establish a business on a huge scale, I advise you to keep an equal amount of investment as a backup.

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