How To Start a T-shirt Business

There is nothing better than making your passion your business, starting a new business is always exciting especially if it brings out the creativity in you. Starting a t-shirt business may seem fun and exciting nevertheless, to make yours a success story you need to have a plan in place and then move ahead.

As a new start up you need to be very clear on the client segment you wish to target.  The segment can be broadly categorized into two segments:

  1. Retail Sale (Online retail / Over the counter retail. B2C)
  2. Institutional Sales (B2B)

The first segment constitutes to only 15% of the market share (figure taken from, in other words there is a huge fight for space and you will be competing with some big brands here in this segment.  The 2nd segment holds almost 85% of the market share, nevertheless, it’s a very price sensitive and delivery schedule driven market, with clients have a zero percent tolerance for delays in delivery. After you decide the segment you are best suited for you need to work on other aspects such as your

  1. For Online/ Retail Market (B2C):

You need to create your own unique style, identify a good supplier of t-shirts, printers and embroiders. Outsourcing blank t-shirts is the best way to go about it initially rather than have your own manufacturing set-up. Keep a very close check on your finances as the permutation of t-shirt colours, prints, sizes add up geometrically.

Presuming you introduce 20 designs to start with in 5 t-shirt colours and 4 sizes your SKU (Stock Keeping Unit) add up to 400. Now as a start-up trying to play safe if you stock 5 t-shirt per SKU the number still adds up to 2000 pieces of ready printed t-shirt.  Though personally I feel one should at least start with 40 designs to make ones range interesting.

The industry statistics is that for every 10 designs you may introduce 2-3 of them will move fast, another 2-3 will be slow moving and the rest may end up as dead stock. One needs to account for the dead stock too into the costing of the product.

For starters it is advisable to invest in a DTG printer (Direct to Garment Print machine),  this will help reduce the fear of dead stocks and one can offer unlimited options of designs without really having to stock them, one doesn’t need to stock too many blanks either. Only when you get an order do you print the t-shirt.

Therefore, it is very important to have good business plan in place before going ahead.

  1. Institutional Sales (B2B)

This being a far bigger segment the competition here is very fierce. Margins are wafer thin on generic qualities and you may at times be competing for orders against direct manufacturers.  In this segment you first book an order and only then outsource or manufacture it. Many a times you may enjoy better margins on small orders or custom designed t-shirts.

Once again as a start-up its best to outsource initially and only once you have a reasonable market share should you contemplate having your own manufacture.

  1. Identify a manufacturer who meets your quality standard and stores ready stocks of t-shirts in various qualities, colour, sizes and also can offer custom design option.
  2. Create a marketing plan and share it with a few friends who you believe could give you an insight.
  3. Visit printers and embroiders, collect samples and understand the different technologies of brandings, their advantages and limitations and how to work out the costing, remember that every stage of manufacturing attracts a certain percentage of rejection therefore it’s important to build it into your costing. Also understand the timelines needed by your suppliers and always confirm the delivery schedules to your clients in consultation with your suppliers.
  4. You should keep a close watch on ones financials too after all it’s the life blood of any business.
  5. Collecting prospective client data is an integral part of business. You could get it from Trade directories or visit various industry exhibitions and build your database.

Suggest you do not try to pitch for large enquiries initially, as every new business does have its set of teething problems and you need to get them sorted therefore in the initial stages smaller order quantities are safer. Always try focus on your profit margins rather than volumes.

If you need any technical knowhow or if you are facing any hurdles in sourcing do send me an email maybe i could help.

Shashank Karani