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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on March 23, 2022
Investment range
$4,350 - $9,600
Revenue potential
$91,000 - $450,000 p.a.
Time to build
3-6 months
Profit potential
$55,000 - $137,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here are the most important things to consider when starting your lingerie business:
Starting a lingerie business has pros and cons to consider before deciding if it’s right for you.
Trends in the lingerie industry include:
Challenges in the lingerie industry include:
The startup costs for a lingerie business range from $4,300 to $9,600, assuming that you will sell online from your own website or an online platform like Amazon or Etsy. Costs include lingerie line design software and your initial inventory, and this assumes you will not be opening your own lingerie shop to start.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Lingerie design software | $300 - $500 | $400 |
| Initial inventory | $2,500 - $5,000 | $3,750 |
| Total | $4,350 - $9,600 | $6,975 |
Prices for lingerie vary based on the item and materials, and price markups from manufacturers’ prices also vary. These calculations assume your average item will sell for $25, with a profit margin of 60%.
In your first year or two, you could work from home and sell 10 products a day, bringing in more than $91,000 in annual revenue. This would mean nearly $55,000 in profit, assuming that 60% margin. As your brand gains recognition and you get repeat customers, sales could climb to 50 products a day. At this stage, you’d rent a commercial space and hire staff, reducing your margin to 30%. With annual revenue of more than $450,000, you’d make a tidy profit of $137,000.
There are a few barriers to entering the lingerie market. Your biggest challenges will be:
Now that you know what’s involved in starting a lingerie business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research lingerie businesses in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a lingerie brand for plus-size women, or custom bejeweling options.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as underwear or bedroom lingerie.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You should come up with several designs that you want to sell and decide if you want to specialize in a particular product line, like bra and panty sets, bedroom lingerie, or cosplay.
Your prices will depend on the item, and your material and time. You should consider your manufacturing costs when determining price, as well as market prices for similar items.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be broad because men and women of nearly all ages buy lingerie. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a packaging facility or even a store. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to lingerie businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your lingerie business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a lingerie business. You might also try crowdfunding if you have an innovative concept.
Starting a lingerie business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your lingerie business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as LS Retail, Vend, or Retail Pro, to manage purchasing, inventory, designs, and invoicing.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your lingerie business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your lingerie business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a lingerie boutique, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in fashion for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in lingerie. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a lingerie business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Ready to get intimate and enter a hot market? You can start small, designing your lingerie from home and selling online. It doesn’t take much of an investment, and you can make good money that you can use to grow your business. Eventually you could open your own shop and then a chain of successful boutiques.
You’re now armed with all the business knowledge you need, so it’s time to start your entrepreneurial adventure into fashion!
Yes, markups on lingerie are fairly high, so you can make a profit. The key is to design quality lingerie that will stand out in a competitive market.
You’ll need to markup your manufacturing costs by a good margin that will get you a healthy profit but also be aware of competitor prices. You want your prices to be high enough that you can make money, but not so high that customers won’t pay them.
To differentiate your lingerie business from competitors, focus on unique designs or styles, offer a wide range of sizes and inclusive options, provide exceptional customer service and personalized fittings, emphasize sustainable and ethical practices, collaborate with independent designers or artisans, and create a welcoming and inclusive shopping experience.
Ensure the comfort and fit of lingerie products by offering a wide range of sizes and providing professional fitting services to help customers find their perfect fit. Educate your staff on proper measuring techniques and sizing considerations. Source lingerie from reputable brands known for their attention to fit, comfort, and quality.
Ensure the quality and durability of lingerie products by carefully selecting reputable suppliers and brands with a track record of producing high-quality items. Conduct quality control checks to ensure that products meet your standards. Consider customer feedback and reviews to identify any potential issues and address them promptly. Provide clear care instructions to customers to help them prolong the lifespan of their lingerie.
To offer personalized and customized lingerie, you could start with made-to-measure services that tailor products to individual body measurements. Allow customers to choose from different colors and fabrics, and add options for monogramming or embroidery for a personal touch. Consider also involving customers in the design process, letting them select specific design elements for their lingerie.
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