Fashion Business

How Profitable Is A Fashion Business? (Updated for 2024)

Pat Walls

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Updated: October 5th, 2024

How Profitable Is A Fashion Business? (Updated for 2024)

So you want to start a fashion business?

And the first question that came to your mind was, “well, are fashion businesses actually profitable?”

Especially considering:

You could start a fashion business with as low as $50
Based on our data, fashion businesses generate an average of $1.36M per year
You could see gross margins as high as 24% with fashion businesses

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a fashion business.

Let’s dive in!

Is a fashion business profitable?

Yes, a fashion business is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $1.36M per year with an estimated gross margin of 47%, you could expect to recover your investment within 10 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your fashion business.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your fashion business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a fashion business worth it?

If you’re wondering if a fashion business is worth it, the answer is a big YES. With fashion businesses, you have the potential to earn $1.36M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a fashion business to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful fashion businesses case studies.

Examples Of Profitable Fashion Businesses

Here are a few examples of profitable fashion businesses, and a few more details about them:

2. Lucasgift ($1.2M/year)

After moving to the U.S., Taha's father started sewing leather items to make ends meet. In 2017, they opened an Etsy shop selling personalized leather keychains, which quickly grew to a $100k/mo business.

Is it profitable? Yes
How much money it makes: $1.2M/year
How much did it cost to start: $70K

How Me and My Dad Make $100K/Month Selling Personalized Gifts

Discover how a mechanical engineering major and his dad scaled a personalized gift business to $100k/mo revenue mainly through selling personalized leather keychains with over 10,000 reviews and a 4.9-star rating, proving the power of differentiation and pricing strategies in a competitive market.

Read this case study

Read by 1,316 founders

3. Yoke Apparel Manufacturing ($276K/year)

Jesse James, the founder of Yoke Apparel Manufacturing, came up with the idea after noticing a lack of action among people with strong opinions on social issues. He and his wife decided to make a tangible difference by moving to Vietnam and starting a clothing manufacturing business that directly hires at-risk locals in vulnerable situations. Despite initial challenges, they have achieved automation and stability after just 2 years of operation, and they are now focused on driving growth and revolutionizing the clothing industry.

Is it profitable? Yes
What's the gross margin? 24%
How much money it makes: $276K/year
How much did it cost to start: $20K

We Moved To Vietnam And Started A $276K/Year Clothing Manufacturing Business

Yoke Apparel Manufacturing is a comprehensive clothing manufacturing service specializing in low minimum order quantities, with an international customer base generating an average monthly revenue of $23,000 and managing to reach a 24% operating profit.

Read this case study

Read by 5,478 founders

Learn more about starting a fashion business:

Where to start?

-> How much does it cost to start a fashion business?
-> Pros and cons of a fashion business

Need inspiration?

-> Other fashion business success stories
-> Marketing ideas for a fashion business
-> Fashion business slogans
-> Fashion business names
-> Fashion business Instagram bios
-> Fashion business Instagram captions

Other resources

-> Fashion business tips
-> Blog post ideas for a fashion business
-> Fashion business quotes

How much can you make with a fashion business?

With a fashion business, you can make an average of $1.36M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $50. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 10 months.

How much does a fashion business make a week?

Based on our data, average weekly revenue for a fashion business ranges around $28.4K. As such, you could see monthly revenues of $114K.

To know if your fashion business achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your fashion business.

How much do fashion businesses owners make?

The income of a fashion business owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established fashion business is about $28.4K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a fashion business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Fashion Business Profit Margins

Generally speaking, a fashion business can expect profit margin of around 47%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a fashion business, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, fashion business owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, fashion business owners can ensure long-term sustainability and profitability for their business.

Fashion business owner salary

The salary of a fashion business owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established fashion business, in a prime position, might see an average weekly salary around the ballpark of $13.4K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a fashion business may be a promising business to start - but the success of your fashion business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable fashion business.

Part of

Starting A Fashion Business: Everything You Need To Know

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