How to Start a Wholesale Clothing Business
Being a clothing wholesaler means you don't sell your merchandise directly to the public. You sell to retailers and other jobbers. As a clothing wholesaler, you buy in bulk from major distributors and manufacturers at lower prices and add your markup before selling to retailers. The markup is your profit after deducting your business expenses.
- Difficulty:
- Easy
Instructions
-
-
1
Decide whether you want to be a general clothing wholesaler or specialize in a niche. As a general clothing wholesaler, you sell clothes of all sizes for men, women and children. As a niche wholesaler, you will specialize in one area. Your decision here will determine how you set up your wholesale clothing business.
-
2
Locate clothing distributors and manufacturers in your area and contact them. You can do this through Yellowpages.com (see Resources). Ask for brochures and price lists for their merchandise. Visit their warehouses and buy sample items. This will allow you to determine if their merchandise meets your quality standards. Speak with the owners or managers and find out how to order from them in bulk. Each distributor or manufacturer will have a different minimum ordering quantity. Be sure to understand what that is. Ask about their return policy, restocking fees, shipping, ordering deadlines and quality guarantees. Complete wholesale applications where applicable.
-
3
Visit other wholesalers in your area. Speak to the owners and managers to determine their pricing structures. Compare the quality and price of clothing they have in stock with the samples you received from your manufacturers and distributors. This will ensure you don't stock inferior merchandise, pay too much for your merchandise or price yourself out of your market.
-
4
Visit clothing retailers in your area; these are your customers. Introduce your business and establish a business relationship with them. Begin with locally owned retail stores. They are easier to work with and can order merchandise immediately. Be sure to have samples of your merchandise and your price list available for immediate sales.
-
5
Start small and add merchandise to your wholesale clothing business as you grow. This way you are not stuck with outdated merchandise, and you are able to manage your business easily.
-
1
Tips & Warnings
Depending on how small your wholesale clothing business is, you can start from your home and branch out to a warehouse as you get bigger. Register your business with your local county clerk's office and obtain your Doing Business As (DBA) or Assumed name certificate before starting your business. Visit your state comptroller's office or website and apply for a Reseller Permit. No manufacturer or distributor will sell clothing items to you without this permit. It also allows you to buy in bulk without paying taxes. Open a bank account for your business and establish a merchant account with your bank so you can accept electronic payments. Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if your wholesale clothing business has employees or if you incorporate your business (see Resources). Keep accurate accounting of your business sales and expenses. This is important for end-of-year tax purposes. It also helps you gauge the success or failure of your business. Microsoft and Intuit have accounting products that are free to download and use (see Resources). Order business stationery for your wholesale clothing business. Having a business card makes you look professional no matter the size of your business.
If you decide to specialize in a niche or you order from overseas manufacturers, beware of imitation merchandise from China, Korea and the Philippines.
