Underestimating Costs and Cash Flow When Starting a Clothing Brand: What Not to Do

Time to read: 6.5 minutes

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Underestimating Costs and Cash Flow

Starting a clothing brand always costs more than founders expect. The biggest mistake we see? Assuming that “production” is the only expense. In reality, it’s just one part of the puzzle—and often not even the biggest one.

Below are the real, hidden, and often forgotten costs that drain new fashion founders before launch—inspired by real numbers commonly discussed in industry interviews, founder postmortems, and apparel startup guides.

1. Sampling Costs

Sampling is often the first major expense founders underestimate.

Here’s what you should actually expect:

• Apparel samples: $100–$200 per style

• Bags & accessories: $200–$300 per piece

• Custom molds (footwear, hardware, injection parts): $1,000–$2,000 each

• Strike-offs / knit-downs: $100–$150

• Sample shipping: $50–$70 per round (and you rarely have just one)

Industry insight:
New designers often report repeating samples 2–5 times before landing on a production-ready version. That alone can turn a “$150 sample” into a $600–$1,000 cost per style

2. Design & Technical Development

Before production begins, you’ll need design assets and technical files to avoid costly rework.

Typical cost range: $100–$2,000 per project, which may include:

• Research & concept development

• Product or fashion design

• Graphic/print design

• Packaging, labels & brand assets

• Tech packs

• Pattern making

• Revisions and grading

Important:
Many founders try to skip tech packs to “save money.” In practice, skipping tech packs increases your sample rounds and causes manufacturing errors—costing far more in the long term.

3. Freight, Tariffs & Landed Costs

Your actual cost to acquire finished goods is far higher than your production cost.

Budget for:

• Freight: +10–30% of factory cost

• Customs duties: 10–45%, depending on HS code

• Tariffs: 10–35% depending on origin

• Warehouse receiving fees

• Insurance

• Local ground transport

Key insight:
Many founders assume shipping is a few hundred dollars. In reality, a single season’s worth of cartons can easily cost $1,000–$4,000+ to transport, depending on volume and urgency.

4. Inspections & Quality Control

Inspections affect your margins — but skipping them can destroy your brand.

• Cost: $300–$500 per day

• Risk of skipping: Incorrect sizing, poor stitching, fabric shade variations, mislabeled hangtags, missing pieces

A single bad production run can wipe out an entire launch budget.

5. Product Photography & Marketing Content

High-quality visuals influence conversion more than almost any other pre-launch investment.

Typical costs:

• $50–$500 per SKU: depending on lays vs. on-model

• Lifestyle shoots: higher-end ranges

• Short-form video: often the most expensive per piece

• Seasonal updates: content is an ongoing cost

Reality check:
Most founders spend months perfecting a product but forget that customers won’t buy what they can’t see clearly.

6. E-Commerce Setup & Digital Tools

Launching your online store has recurring operational costs many founders miss.

Plan for:

• Shopify subscription

• Apps for reviews, translations, inventory, loyalty programs

• Transaction fees: 2–3% per sale

• Hosting

• Domain renewal

• Security plug-ins

• Email marketing tools

• CRM tools

Even a small brand often spends $100–$300 per month before launch day—without any sales yet coming in.

The Cash Flow Timing Trap

This is the #1 reason fashion startups run out of money.

Production Payment Timeline

• 30–50% deposit before production begins

• 50–70% balance before goods ship

• 8–12 weeks of production lead time

• +1–6 weeks of shipping

Your cash is locked up for months before you sell anything.

If selling wholesale

Retailers often pay 30–60 days after delivery, meaning:

You may spend cash in Month 1 and not get paid until Month 6.

Rule of thumb:

Total projected monthly costs × 3 = your minimum cash cushion.

This protects you when:

• Timelines slip

• Samples take longer

• Fabric MOQs force larger orders

• Shipping surges

• A campaign underperforms

• Ads get more expensive

A Real Example

A founder had $10K saved for inventory—but didn’t plan for:

• $2,000 shipping

• $1,500 customs

• $1,000 photography

By the time samples were finalized, she couldn’t afford to launch.

This story is extremely common across podcast interviews and indie founder case studies.

How to Avoid These Cash Flow Mistakes

• Build a full-scope budget:
  Production + operations + marketing

• Add a 10–15% contingency fund

• Start smaller:
  A capsule drop instead of a full line

• Reduce SKUs by:

• Using shared fabrics

• Introducing variants instead of new styles

• Avoiding complex components early on

• Track cash flow weekly
  (Not monthly—and definitely not quarterly

And most importantly:
Your first big win is not going viral.
It’s staying solvent long enough to launch your second collection.

Need help budgeting your launch?

At Tech Packs Co, we’ve helped hundreds of founders avoid costly mistakes and build smarter production plans.

Book a call today—and start your first collection with clarity and confidence.

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