Building a garment retail chain is no easy job, and for beginners it can be an impossible task to get started.
When I left Bangalore to move to Ludhiana, I had no clue on what is coming next in my life. I was supposed to join my younger brother in his garment manufacturing unit, joined at the same time by my father too.
My previous ventures in Bangalore had failed to take off, while my younger brother continued the family tradition by learning to struggle alone, trying to run the garment factory all by himself in Ludhiana. I came to know about various types of Jugaad used in garment manufacturing too.
When I joined, I was thrilled to see labels of Myntra lying on the factory floor! Is Myntra our client? I asked in excitement.
No.
Then, how are we manufacturing for them?
It has been outsourced to us by another factory. I later came to know that we earned a profit of 8.5 Rs per hoodie, while we manufactured for Myntra’s in house brand Ether. It was not bad, it kept our factory running and made enough for us to pay wages to workers. This is called “Jobwork” and was one of our only revenue streams.
If we had to earn money, we had to start our own label and build a garment retail chain. When the brand starts selling more, we would have to increase our capacity. And when our capacity increases, we can get clients directly. It made good sense.
It was time to become a hardcore t shirt manufacturer.
We named our brand “Yali”, picking the logo and name from my previous unsuccessful art website.
Start: Get the fabric from fabric manufacturers.
Fabrics itself are of a dozen types, with many varieties underneath each type. We faced a situation where we picked many fabrics for sampling, but later came to know that the minimum order for some fabrics would be 200 KGs.
Sampling: Making samples of your t shirts to show to retailers, distributors and wholesalers.
200 Kgs would mean a production of 800 to 1000 pieces in each design.
A standard retailer or wholesaler, even if he likes the samples, would give us an order of max 150 T shirts.
We also had no back support of retailers or distributors who would take our stock. We hesitantly created around 50 samples and started inviting people to have a look.
“Nahi chalega”
“Abhi mehnat karni padegi”
“Sir, brand aapka menswear ka hai, design ladies hai”
“Sir, aajkal honey singh jo pehan raha hai vo banao, punjab vich wahi chal raha hai”
“Piece ko thoda ganda karo, zip ship lagao alag alag jagah”
It was not a good start. We then understood that our collection had to appeal to only some select buyers.
We cannot target everyone. Our next target was to improve the look of the fabric using better accessories, and think of making the brand for premium menswear only, not youth.
We used better buttons and better labels and started inviting people again.
It was a success.
We started getting our first bookings that allowed us to get ten percent profit by selling to distributors.
Chain started getting formed and the network started getting added from Delhi to east Uttar Pradesh to Haryana. Distributors showed our samples to retailers, who approved and we started getting manufacturing orders.
Costing and profit
Most distributors know complete manufacturing costs and even asked us how much we were paying for certain operations in the factory. They agreed to give us 10% profit and started picking up inventory. We met some direct retailers and were able to get a profit of around 25% from them.
The factory was in full production mode now.
Our employee strength in manufacturing went up to 30 from 15 in no time.
We then started a second line of sportswear to our garment retail chain and started sending their samples to wholesalers too.
The demand was more than normal menswear. Sportswear right now has great demand, as the big brands are too costly for the masses and they look for cheaper options.
Another clothing item was pyjamas or lowers. We started manufacturing all and sending to market. We kept our quality high.
We now have a demand of 10000 pieces per month including all three clothing ranges of mens t-shirt, mens lower and sports wear. This does not include the small but regular orders we have started getting on our online portal for customized clothing CustomBaba.
How to get money back.
The set time for back payment is one month.
The system also works on trust, so it is important to give your inventory to distributors and retailers whom you can trust. Some preliminary research in the market is a good starting point.
Key takeaways.
1) Keep the product quality at top. Buyers will come.
2) Reduce your expenses to deliver product at lesser costs, enough for distributors and retailers to make a margin.
3) Dispatch on time. Will help you rotate money quickly.
I hope this post serves as an insight into how to start a garment retail chain.
Please feel free to ask any questions in the comments.
