Do you want to build your own sportswear brand from scratch? That will be a long way to walk and the first step is to know how much will it cost to launch a such brand, just like Gymshark did. In this post, we will talk about the general budget of starting an activewear business in the United Kingdom and how to reduce the cost of activewear wholesale purchases to grow your business faster!
How to calculate the cost to launch an activewear brand
Before all, ask yourself the following questions:
- Who is my target customer?
- Who are my nearest competitors and what are their price points?
- What would my target customer expect product-wise from my brand?
- What RRP should I charge based on my target customer and competitor?
- How are my product and brand going to set itself apart from my nearest competitor and will this affect the RRP?
Once you have answered these questions, you should have a clear picture of the brand position and styles you will need to offer.
Then, there are 3 principal costs involved in launching sportswear brands:
- Cost of Goods (COG’s)
- Design, development, and production management
- Website & Marketing
COG’s is pretty simple to calculate as it’s a formula taken from the target RRP. Once you understand the RRP, the COG’s are simply a calculation of this.
To give you an example of COG’s, please find below a comparison between a start-up and an established brand.
Let’s pretend the start-up and the established brand want to produce the identical product in the same factory from say China. This is the typical COG for both. The start-up wants to order 250pcs in total and the established brand orders 3,000pcs.
As you can see, your margin won’t compete with the established brands until you get enough traction to order the normal MOQ and stop paying surcharges. You, therefore, need to make sure you don’t simply compete for head to head with an established brand and offer something unique to make your brand stand out and steal their customers.
Design, Development, and Production Management.
Before you talk to any factory or supplier, you will need accurate CAD designs and a very detailed tech pack. This tech pack must include a BOM, grade, trim, panties, sourced fabrics and trims, stitch method, and construction. Without this, most factories won’t want to work with you, ignore your emails until you eventually get bored chasing them and disappear.
Please bear in mind that whoever designs and creates the designs and tech pack MUST know which factory will produce the goods, their capabilities, and skill base and also have a very clear idea of costs for fabrics, trims, labor, and components, otherwise, you end up with a pretty picture that potentially won’t hit your target price. We see this happen a lot where a start-up enlists a freelance designer with no experience in production and they end up with a design that isn’t achievable for the target audience.
*Reduce activewear clothing production cost
To reduce the cost of purchase, you should choose a professional activewear wholesale supplier or manufacturer like Berunwear Sportswear company. It’s a China-based athletic apparel factory & sales company, as the leading activewear manufacturer & supplier in the world, they have over 15+ years of experience in the activewear industry creating profitable labels. See below why they can reduce your cost of purchasing:
- For design, they support customize any activewear with trendy designs of the actual year FOR FREE, or just provide you with some style information on fashionable clothing this year to help you find your best-seller of the store.
- For development, Berunwear has its own activewear design team and will update new styles every month.
- For manufacturing, they have a powerful activewear production line in China and other branches in Europe/North America, so you can get your orders with low MOQ and delivered in any country of the world! Berunwear is not only an activewear wholesale manufacturer, but it’s also an expert of Supplier Chain Management for any sportswear!
Website and Marketing
This is slightly easier to calculate; however, it still needs consideration before you proceed with the build.
Work out what your website needs. Start by creating a wireframe of the website to follow the customers’ journey and this should determine how many pages the website will need.
We recommend skinning a plug-and-play site like Shopify or Wix. These are easy to update when you run out of a color or size or upload new products and look great too. You only really need to create a bespoke website if you need to offer a service that is unique to the customer’s online journey and this will save thousands.
Marketing is again a simple calculation based on the RRP of your product.
We suggest all start-ups spend around 25% of their predicted turnover on marketing their brand in the early years. To calculate this, please see the example below.
Note that you won’t need all of this £18,750 from day one of the launch. If you predict you will sell the first range in say 8 months, then you would need to cover the first month only which is around £2,343.00 (£18,750 divided by 8). After the first month, you should start to see your sales come in and you can use these funds to drive the marketing thereafter.
Is the cost of starting an activewear brand cheaper if manufacturer overseas?
It’s possible but given all of the above, I still think that launching a brand that is made here is going to be cheaper than making it overseas. If you did that you’d also need to include additional costs such as flights to visit factories, International courier charges for samples, and possibly also an agent’s fees to handle everything for you. Plus you’ll have to invest in a lot more stock if MOQ’s are higher. Heaven forbid the costs involved if there’s been some miscommunication with the factory and everything has been made wrong!