The Australian clothing industry has experienced consistent growth over the past decade, making it one of the most lucrative sectors for entrepreneurs in 2025. Whether you’re a newcomer or an experienced business owner, this guide will help you start your own clothing business in Australia.
Is Starting a Clothing Business in Australia Profitable?
The clothing retail industry in Australia generated over AU$23 billion in revenue in 2022, with projections of continued growth fueled by online shopping trends. According to IBISWorld, Australia has more than 17,000 clothing stores, and annual expenses for a store include:
- Rent: $30,000–$50,000
- Marketing: $10,000
- Miscellaneous (utilities, maintenance): $20,000
After accounting for expenses like wages ($5 billion annually) and operational costs, the average revenue per store is approximately $900,000–$1 million, with profit margins between 40%–50%. This translates to potential annual profits of $350,000–$500,000, depending on factors like location, marketing, and competition.
Step-by-Step Guide to Start Your Clothing Business
Here’s a practical checklist to help you establish your business:
- Research
Understand the market by identifying trends, customer preferences, and competitors in your target area. Tools like Google Trends can help you track popular styles and demand online. Evaluate potential suppliers and their shipping costs to ensure reliable access to inventory.
- Draft a Business Plan
A solid business plan is crucial. It should include:
- Financial projections
- Market analysis
- Marketing strategies
- Product descriptions
- Expense and revenue estimates
If you’re seeking investors, opt for a detailed plan. For self-funded businesses, a concise one-page plan may suffice.
- Register Your Business
Obtain necessary permits and registrations, such as:
- Australian Business Number (ABN)
- Tax and GST registration
- Additional permits depending on your business location and type
Visit the government’s business registration website for specific requirements.
- Secure a Location
Choose a high-traffic area with reasonable rent. Popular cities like Melbourne, Sydney, and Brisbane offer vibrant retail opportunities. Ensure the location aligns with your budget and attracts your target customers.
- Set Up the Store
Design a welcoming store layout with organized inventory. Build strong relationships with suppliers and shipping partners to maintain consistent stock levels and efficient deliveries.
- Install a POS System
Invest in a Point of Sale (POS) system to manage payments, track transactions, and monitor inventory in real time. Choose a system that integrates seamlessly with e-commerce platforms.
- Build an Online Presence
Launch an e-commerce store to expand your reach. Sync inventory data with your POS system to ensure a smooth shopping experience for online customers.
- Market Your Brand
Develop a comprehensive marketing plan using:
- Social media
- SEO-optimized website content
- Email campaigns
Focus on building brand awareness and engaging your target audience.
- Launch Your Business
Prepare for the grand opening by training staff and promoting the event. Treat the launch as an opportunity to make a lasting impression on customers.
Costs Involved in Starting a Clothing Business
Starting a clothing business in Australia requires an estimated $100,000 to cover:
- Rent
- Inventory
- Licenses
- Marketing
- Store setup
If working with a smaller budget, such as $50,000, you can opt for a modest store setup, minimal decorations, and solo management until profits allow for expansion
FAQs
What licenses are needed to start a clothing business?
Common requirements include:
- ABN Registration
- Compliance with trade measurement laws
- Website and employment-related registrations
Can I start with a $50,000 budget?
Yes, but you may need to compromise on location, decor, and initial staffing to stay within budget.
