How much inventory should I start off with in a clothing business?

As a general rule of thumb, you should have at least 12-15 styles in your inventory. For example, if you are going for dresses, you need twelve different styles in at least three different sizes.

How much inventory should a small clothing business have?

Determine Your Inventory Investment

Your starting inventory should be 2.5 to 3 times your projected monthly sales to ensure you have enough stock while allowing room for new arrivals. For example, if your projected monthly sales are $30,000, your initial inventory should be valued at $75,000 – $90,000 at retail price.

What is the inventory turnover ratio for the clothing industry?

A “good” turnover ratio varies significantly across retail verticals. Inventory-intensive retailers like grocers may see only 5-10 turns per year. Fashion retailers may see 8-12 turns or more. The average inventory turnover across retail is around 9x.

How much money do you need to start a clothing business?

Depending on whom you choose to work alongside, starting a clothing line could cost anywhere between $500 to $10,000. If you're an established designer , it will probably cost you upwards of $25,000 to $50,000.

What is the average profit of a clothing business?

An ideal profit margin for clothing falls between 10–15%. Net profit margin tells you what percentage of revenue remains after all expenses—COGS, operating costs, taxes, interest, and one-time charges. 10% is average profit margin for clothing retail.

How Much Inventory Should You Start Off With?

How much does it cost to start a clothing line in the UK?

The aim should be to keep costs as low as possible to start with at least. Around £2000 would be a bare minimum to start a fashion brand in the UK, It is possible to start with less. Or even no money at all with certain business models. Realistically though, £5000 – £20000 would be a good aim for startups.

What is an ideal inventory turnover?

What is a good inventory turnover ratio? For most industries, a good inventory turnover ratio is between 5 and 10, which indicates that you sell and restock your inventory every 1-2 months. This ratio strikes a good balance between having enough inventory on hand and not having to reorder too frequently.

How do I calculate inventory turns for apparel?

To calculate this rate, simply divide the cost of goods sold by the average inventory. This will give you the number of times that your company's inventory turns over in a given period.

Which industry has the highest inventory turnover?

Average inventory turnover rate

The Financial sector currently has the highest average inventory turnover rate, at 227.67 while the lowest turnover rate is Capital Goods, at 2.67. Retail sits around 11.32 (7.84 for technology).

How many items for first drop?

Keep It Tight: 3 to 5 Pieces Are Enough

You don't need a huge first release. In fact, small, well-curated drops perform better. Focus on 3 to 5 cohesive items that feel like they belong together.

What is the best profit margin in a clothing business?

A good profit margin for the clothing and t-shirt business is 30-60%. However, it might vary according to your clothing niche, target market, competition, and business model.

How many items should be in a clothing collection?

In a typical fashion collection (considering its size), you'll usually find at least 12 pieces or looks. But collections can vary in size, and this depends on things like the season, how long the collection will be available, the budget, and other factors.

How much to start a boutique?

The cost of starting a boutique business in Nigeria depends on various factors, such as the location, size, and inventory of the store. Typically, you can expect to spend between N500,000 and N5,000,000 to launch your boutique. This includes rent, inventory, marketing, and employee wages.

What is a good inventory to sales ratio?

Low inventory to sales ratios are typically better — but your goal should be to achieve a stock to sales ratio that is healthy for your business, rather than the lowest possible one. Ideally, it's best to keep this ratio between 0.167 and 0.25.

What is the average inventory?

Average inventory is a calculation businesses use to estimate how much inventory they typically have available over a certain period of time. It's commonly calculated by adding the beginning period inventory balance to the ending period inventory balance and dividing the number of accounting periods.

What is Nike's inventory turnover?

NIKE, Inc. (NKE) had Inventory Turnover of 3.54 for the most recently reported fiscal year, ending 2025-05-31.

Is a higher day sales in inventory better?

This is considered to be beneficial to a company's margins and bottom line, and so a lower DSI is preferred to a higher one. A very low DSI, however, can indicate that a company does not have enough inventory stock to meet demand, which could be viewed as suboptimal.

What is the inventory turnover of H&M?

Inventory Turnover : 0.63 (As of May. 2025)

Is an inventory turnover of 12 good?

A high inventory turnover ratio of 12 can signify strong sales performance and effective demand forecasting, leading to better cash flow and profitability.

How to set up your own clothing business?

Which clothing business is most profitable?

How much do retailers mark up?

Usually, retailers aim for a retail markup of around 50%, but this can vary depending on industry, product types and several other factors.