Key production numbers
Budget methodSeparate one-time development, per-unit inventory and launch operating costs.
Cash reserveProtect money for freight, duty, returns and the next production deposit.
First capsuleOne to three coordinated styles creates cleaner development and demand data.
Unit economicsModel landed cost, payment fees, returns, discounts and marketing before setting retail price.
Start with the business model
Decide the customer, sales channel, price position, launch date and inventory strategy before selecting products. The U.S. Small Business Administration recommends calculating startup costs and building a business plan so funding and break-even assumptions can be tested.
A preorder model, small stocked capsule and wholesale launch need different cash timing. Write down when money leaves the business and when customer revenue is realistically available.
Separate three budget buckets
Development includes design, tech packs, patterns, samples, testing and photography samples. Inventory includes bulk garments, decoration, labels, packaging, quality control, freight, duty and delivery. Operating costs include the website, content, payment fees, marketing, returns and customer service.
Keeping these buckets separate prevents a low unit quote from hiding the true launch requirement. It also shows which costs repeat and which can be reused on the second order.
A practical first-capsule model
A focused first collection might use one T-shirt and one hoodie sharing labels, packaging and brand direction. At a 50-piece starting quantity per style, 100 total units are easier to sample and present coherently than many unrelated products.
Do not treat the example as a promise of production cost. Fabric, GSM, size curve, decoration, labels, freight and destination determine the actual quotation. Build low, expected and high scenarios.
Price from landed economics
Landed cost includes the finished product plus freight, import charges and delivery. Retail planning should also cover payment fees, discounts, returns, damaged units, content and customer acquisition. Gross margin based only on ex-factory price is incomplete.
Model revenue at realistic sell-through, not 100 percent immediate sales. Keep a small replacement allowance and make sure the selling price still supports customer service and a reorder.
Protect the reorder
The strongest first launch creates data and enough cash to repeat. Reserve part of the budget for a reorder deposit and do not spend every available dollar on first-run inventory or launch advertising.
Track sell-through by style, colour and size, return reasons, fit comments and repeat demand. Use those numbers to improve grading and quantity distribution instead of simply reordering the same size curve.
Compliance and sourcing still need funding
Budget for correct labels, evidence-based care instructions, product tests where required and supply-chain due diligence. The FTC requires key textile disclosures in the U.S., while the OECD provides government-backed due-diligence guidance for garment and footwear supply chains.
A cheaper launch that ignores these controls can create relabeling, customs, return or reputation costs. Ask the manufacturer which data it supplies and which compliance decisions remain with the brand or importer.
Build a decision-ready worksheet
List every cost with an owner, timing, currency, tax treatment and contingency. Add a 10–15 percent planning contingency where estimates remain open, then replace assumptions with dated quotations.
Review the sheet after sampling, after the final production quote and after freight data is known. The budget is a living control document, not a one-time pitch.
Illustrative first-collection budget structure
| Bucket | Examples | Planning control |
|---|---|---|
| Development | Tech pack, pattern, samples and tests | Track one-time vs reusable work |
| Inventory | Fabric, sewing, decoration and trims | Use quantity by style/colour/size |
| Packaging | Labels, bags, stickers and cartons | Confirm minimums and compliance |
| Logistics | Freight, duty, brokerage and delivery | Use dated landed-cost quote |
| Launch | Photography, site, content and marketing | Set a capped test budget |
| Operations | Payments, returns and replacements | Model percentage of revenue |
| Reserve | Contingency and reorder deposit | Protect cash after launch |
Frequently asked questions
How much money is required to start?
There is no universal amount; calculate product, logistics and operating costs for the exact model and build scenarios.
How many styles should the first collection have?
One to three coordinated styles usually create clearer development, marketing and demand data.
Should I include sample fees in unit cost?
Track development separately, then decide how many future units should recover that investment.
What is landed cost?
The product cost plus freight, import charges and delivery to the point defined by the business.
How much contingency should I keep?
A 10–15 percent planning allowance can be useful while quotations remain open, but update it with real costs.
When should I reorder?
Use sell-through, lead time, cash position and size-level demand rather than waiting until every unit is gone.
Sources and verification
Official and industry-primary references used to verify standards, regulations and definitions in this guide.
U.S. SBA business planning and startup costs ↗OECD garment supply-chain due diligence ↗FTC apparel labeling guidance ↗