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Readymade Garments Business Tips Investment Profit

Readymade Garments Business Tips Investment Profit

Clothing business or readymade garment stores are growing industries in India today. As the industry is witnessing large profit margins, the producers keep offering varieties in their stocks as well. However, opening a readymade garment shop or starting up clothing business is no-joke. There are many things that one must take into account while starting this business.

Readymade Garments Business Tips Investment Profit

Readymade Garments Business Tips

Before you head to start the readymade garment business in India, you must keep these things in mind. Readymade cloths are the final goods that producers sell directly to the customers. It is very important to make few choices before starting up the business.

  • Types of clothing: The very first thing one must decide is what type of clothing they want to sell. There are a lot of varieties available in the market that one can start with. Also you have to choose whether you will start with kids’ or adults’ apparel. It is recommended to start with single collection initially.
  • Targeted Customer: In case of B2C trading or Business to Consumer trading, it is important to set the customer base beforehand. For women’s garment different types of customers, for men’s garment different and for kids it will also be different.
  • Get the paper works done: Any business, especially garments’ business needs handful of mandatory documents to be issued. Before starting up the business, all these papers such as licences, forms and others are needed to be done.
  • Market Research: Knowing the market around you is very important in any sort of business. As the fashion and style of readymade garment keeps changing, it is mandatory to know the market trend and price for the same.
  • Quality Check: Finally, the quality of each product you are selling matters the most. It is a competitive market and it takes few seconds to beat or get beaten by others. Hence maintaining good quality is equally important for this business.

Licence for Readymade Garments Business

  • To start the readymade garment business one needs a Trade Licence first. It is mandatory for any other business as well. Trade Licences can be issued from the local municipality. In case the person who is selling the products wants to sell their goods beyond the city/town but within the state, then also they can apply for the Trade Licence accordingly.
  • Apart from the Trade Licence, GST or Goods & Service Tax registration is mandatory. So with the help of any local Chartered Accountant or Tax consultant one can register for GST. If the turnover of your business is more than Rs. 20 Lac then GST will be applicable. However each company has to register under GST network for business.

How to Select a Place

The location and place is one of the many important things for business. It is the leading determinant to create customer base. Now, depending upon your nature of business, location or place should be decided.

Firstly if the entrepreneur is heading for wholesale business then it can be started from their home or a place where bulk ordered can be made. On the contrary if it is B2C business, that is retail store, then it should be in an area where attention of masses can be drawn.

Initially, it can be started from home where a moderately spacious room is available. Also the room must be somewhere in the outer part of the house so that it can easily be spotted by the targeted customer.

Marketing Plan & Marketing Area

Marketing area depends on the targeted customer. If the seller is selling women’s garment then the marketing area and strategy should be more advanced and tech-friendly, such as social media or digital media.

This can be said in case of kids or men’s apparel as well. Basically if the seller is targeting young generation then marketing must be done through digital platform along with traditional ways. As digital platforms like social media, search engine optimisation, ad-sense and so on are growing immensely; it has much more user than conventional news paper readers and TV watchers.

Staff & How to Define Salary

For Readymade garment business, one needs a few staffs with minimum salary. As you are heading to the readymade garment shop or business, you don’t need a factory shed or a vast area with 100 staffs. Considering yourself, you need a couple of staffs who will help you to stock up the goods you receive and will help you to sell them across the counter. The salary for these people will be between Rs. 3000/- to 4000/- initially.

Apart from these staffs, a marketing person will be needed for marketing purposes. You can do it yourself if you are marketing your products on digital platform. For others, especially door-to-door sell, you need a marketing person with monthly salary of Rs. 10, 000/- initially.

Cost & Investment

Readymade garment shops or selling business does not need much investment. Initially with Rs. 5 Lac of investment this business can be set-up. Now, depends on the trendy fashion or quality products the cost can go upward. However for the initial start, Rs. 5 Lac will be the investment needed for the readymade garment business.

Selling Price Margin

The selling price is generally 50 to 60% higher than the warehouse or wholesale price in readymade garment industry. It solely depends on what products you are selling and whether they are branded or not. Also the price margin depends on what kind of customers you are targeting at.

Generally selling price margin lies between 30% and 60%. If the garments are branded then it can be more profitable for the seller as the margin gets little higher than that of non-branded cloths.

Profit of Readymade Garments Business

As mentioned above the price margin is 50%, the profit too ranges from 25% to 50% for non-branded and branded cloths. The price includes tax, transportation, and salaries of employees, material, accessories and other needful things.

Risk & Precaution in Readymade Garments Business

  • In India, having a readymade garment business is quite risky. Either it can grow immensely or it can be doomed easily. In India there are two seasons when new collection can be launched Autumn-Winter season and Spring-Summer Season.
  • Old collection or stocks you are left with can be returned to the company or you can sell them on heavy discount like other branded clothing companies do. This will help you to expand your customer base as well throughout the year.
  • During the season, fresh collections can be sold at moderate price according to the market demand. Hanging high price tags can decrease the number of customers for your business.

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