How to Start a Clothing Business in Australia (2025)

The Australian Clothing Industry has been growing non-stop for over a decade now. While the pandemic made selling clothes a little tough in 2021, the industry still reigns as one of the most profitable ones to get into in 2025. 

Now, whether you’re new to businesses or a veteran, this comprehensive guide will help you start your own clothing business in Australia.

How Profitable is a Clothing Business in Australia?

The clothing retail business in Australia is certainly a very profitable industry as it reportedly brought in over AU$ 23 billion in 2022. And the industry is only set to grow even more with the rise in online shopping.

According to the clothing industry report by IBISWorld, there are more than 17,000 clothing stores in Australia. As discussed above, the annual revenue generated by this industry is $23 billion and employee wage is close to $5 billion. 

Moreover, other annual expenses include:

• Rent: $30,000 - $50,000
• Marketing: $10,000
• Electricity, Maintenance, & Misc: $20,000

So, if we take into consideration the 17,000 clothing businesses, the other annual expenses will be in the range of $1 billion to $1.4 billion. 

Now let’s calculate the total average revenue:

I.e. Total average revenue = ($23bn-5bn-1.4bn) / 17,000

Therefore, the total average annual revenue per store is equal to $900k - $1 million.

Now, we need to take into consideration that there is a 40% - 50% profit margin in the clothing business. 

Hence, the total annual profit generated by a clothing store in Australia is in the range of $350k - $500k. 

However, it is important to note that the actual profit of a clothing store depends on several factors. This includes the location of the store, foot traffic, marketing efforts and the competition.  Nonetheless, with careful consideration, planning, budgeting, and this guide by your side, you too can run a profitable clothing business in Australia.

Complete Checklist to Start a Clothing Business in Australia

Here is a complete checklist to open a clothing line in Australia:

1. Research
2. Draft a Business Plan
3. Register Your Clothing Business
4. Find Your Store Location
5. Decor and Inventory Management
6. Set up a Clothing Store POS System
7. Invest in an E-commerce Store
8. Marketing and Branding
9. Launch

Step 1: Research

Before you dive headfirst into the world of retail, you have to do a bit of digging, and by that we mean research. Not everyone has the same fashion sense or taste as you do. So, depending on your clothing store’s location, your target audience and their taste in clothing preferences will change. After all, you can’t expect to sell The North Face jackets during the summer near Bondi Beach in Sydney, right? 

Analyse market demand, understand your target audience and study competitors to identify trends and opportunities. What most clothing store owners do is take a look at what the competitors are doing by either physically visiting their shops or walking around the area. You can also use Google Trends to find out what’s trending in your area on the online side of things. 

Moreover, establish relationships with reliable clothing suppliers and manufacturers. Ensure you have a steady and quality supply of clothing items. Also, consider finances and shipping costs to start your apparel store. 

Step 2: Draft a Business Plan

Your business plan can be simple or complex, depending on your needs. If your clothing retail is purely on your own budget, a one-page plan may suffice. However, if you're seeking investors or lenders, you'll need a more detailed plan. We recommend you to get help from a specialist to draft your business plan as it is one of the most crucial steps to succeeding in your endeavour of running a clothing business in Australia.

However, a typical business plan should include in-depth financial forecasts, a thorough market analysis, a detailed marketing strategy, a budget that outlines expenses and revenue projections, store location considerations, and a description of your product line. Your business plan is not just a document; it's a roadmap that guides your clothing business to success.

Step 3: Register Your Clothing Business

There are a few different licences and permits that you will have to acquire to open a new clothing business in Australia. Based on your business type, business activities and location, your licences and permits vary. Some common registrations include ABN number registration, tax registration, GST registration, etc. 

Visit Official Website: Licenses and Permits to Start a Business

Step 4: Find Your Store Location

Finding the perfect spot for your store is like finding the perfect dress - it makes all the difference. Pay attention to the foot traffic, store size and the competition before settling on a store location. Also, make sure your store’s rent is feasible for you and is reasonable for your budget plan. Melbourne, Sydney, Brisbane, Adelaide, etc. are top cities where you can start your fashion store. 

Step 5: Decor and Inventory Management - Keep It in Vogue!

Once you have your licences and store location sorted out, time for the fun part. Your store should have an inviting atmosphere with all clothes and items placed neatly organised. Remember that managing inventory is like keeping your closet organised. So, make sure that you can find specific items when your customers need them. 

Build a strong relationship with your supplier and delivery partner. Look for suppliers who offer the types of clothing you want to sell, and shipping partners who can deliver your products reliably and cost-effectively. Establish open and clear lines of communication with them and discuss orders, product availability, and delivery schedules. 

Step 6: Set up a Clothing Store POS System

Setting up your store’s point of sale system is also a crucial part of success. It’s what allows you to easily accept multiple modes of payment, track all your transactions, and help you manage inventory in real-time. Find the best clothing store POS system that aligns with your business needs and budget. Make sure that it is user-friendly, secure, and capable of integrating with e-commerce platforms. 

Step 7: Invest in an E-commerce Store

Whether when scrolling Instagram or watching TikToks, we’ve all stumbled upon some of the most beautiful dresses that we want to purchase instantly. So give your customers just that, a way to purchase amazing clothes from your store through an online E-commerce website. Invest in an e-commerce store and sync all your inventory data from your POS system. Start selling online while maintaining a seamless shopping experience for your customers. 

Step 8: Marketing and Branding - Strut Your Stuff!

Regardless of the clothing type you sell, reaching your target audience is essential. You can utilise various strategies, including social media marketing, website SEO, and email marketing, to create awareness and engage customers. A well-rounded marketing approach and an online presence can help your clothing business thrive in today's competitive landscape. 

You May Also Like: Fashion Store Marketing Tips

Step 9: Launch 

With all the 7 steps completed, the only thing that’s left is to open your clothing store’s doors to your customers. Launch your store like it's Fashion Week! Train your staff to be as sharp as a tailored suit, and remember, it's not just a store; it's a runway for success!

Bonus Content: New Store Launch Marketing Ideas

How Much Do You Need to Start a Clothing Business in Australia?

Realistically speaking, you will need at least $100,000 to start a clothing business in Australia. That’s for your store’s setup, rent, inventory, licences, business software, and marketing. However, the cost of opening a clothing line can depend on several factors including size, location, and type of products. 

Conclusion

There you have it, your ultimate checklist to make your mark in the Australian fashion world. While you're inspired by the success of others, make sure to add your unique flair and style to every step of the process. So go ahead, dream big, work hard, and begin your journey of owning a new clothing business in Australia today.

You May Also Like: How to Start an Online Business

FAQs

What licence is needed to start a clothing business?

You’ll be requiring a number of licences and permits to legally run your clothing retail business in Australia. However, the exact list requirement will vary depending on your retail location, the size of your business, and other factors. Here are the most common licences needed to start a clothing business in Australia:

• ABN Registration
• Trade Measurement Legislation
• Website Registration
• Fair Work Information Statement 
• National Employment Standards. 

Can I start a clothing business with 50k?

Theoretically speaking, starting a clothing business with just $50k is possible but it can be pretty tough. The very first thing that you might struggle with is finding a suitable store space to lease that fits your budget. Then, you will have to seriously think before spending a dime on any aesthetical decorations. You might also have to run your store on your own for a few months. Once you have made some profits you can hire employees and invest in marketing and branding. But besides these hurdles, you actually can start a clothing business with $50k.

REFERENCES:

Australia Clothing Retail Turnover by Statista

Business Valuation for Clothing and Retail Stores by Jarot Business Valuations

*DISCLAIMER: This article is for general information only. POSApt does not guarantee accuracy, completeness, or specific results from following this advice. Consider consulting business professionals for tailored guidance.