How to start a hoodie business from the ground up

Starting a hoodie business is an exciting venture that combines creative design skills with business savvy. The global apparel market is a multi-billion dollar industry, fueled by consistent demand for hoodies across streetwear, corporate branding, and casual fashion.

This guide will take you through the practical steps of validating your business concept, building supplier relationships, and acquiring inventory to help you launch a successful hoodie business in the U.S.

Step 1: Plan your business and validate your idea

Start by researching your niche. Use Google Trends to compare search interest for different hoodie styles, like “zip-up hoodie” versus “pullover hoodie.” Also, browse platforms like Pinterest and Instagram for visual trends and popular color palettes to see what currently resonates with buyers.

Analyze your competition

Look at what successful brands do. Use tools like Semrush to see the keywords they target. You can also review the Meta Ad Library to analyze their social media ads and marketing angles. This gives you a clear picture of their strategy and customer base.

Estimate your startup costs

Your initial investment will vary, but a typical budget falls between $1,500 and $4,000. This covers LLC formation ($50-$500), a basic e-commerce site ($30-$100 monthly), and your first inventory run. A frequent misstep is ordering too much stock of an unproven design.

You might want to start with a small batch of 50-100 units, which could cost between $1,000 and $2,500. This approach lets you test the market response before you commit to a larger production order, which helps manage your initial financial exposure.

Here are 4 immediate steps to take:

• Research three niche hoodie styles using Google Trends.
• Analyze two competitors using the Meta Ad Library.
• Create a startup budget with line items for legal, inventory, and web costs.
• Get quotes from two suppliers for a test batch of 50 hoodies.

Step 2: Establish your legal and financial foundation

You might want to form a Limited Liability Company (LLC). It separates your personal assets from business debts and allows profits to pass through to your personal tax return. This gives you liability protection without the complex tax rules of a corporation.

A frequent misstep is mixing personal and business funds, which can void your liability protection. Open a dedicated business bank account as soon as your LLC is formed. Use it for all income and expenses to keep your finances separate and simplify tax filing.

Secure your licenses and permits

Once your business is registered, get a free Employer Identification Number (EIN) from the IRS website. You will need this federal tax ID to open a bank account and hire employees. The online application takes about 15 minutes to complete.

Next, obtain a seller’s permit from your state’s department of revenue. This permit allows you to purchase wholesale inventory without paying sales tax. You will also need a general business license from your city or county, which typically costs between $50 and $150 per year.

Here are 4 immediate steps to take:

• Register your business as an LLC with your Secretary of State.
• Apply for a free Employer Identification Number (EIN) on the IRS website.
• Obtain a seller's permit from your state's tax agency.
• Check with your city clerk for local business license requirements.

Step 3: Secure your business insurance

Protect your assets and inventory

You will want to get general liability insurance. This protects you if someone claims your business caused injury or property damage. A $1 million policy is standard for e-commerce and typically costs between $400 and $900 annually. Make sure this policy includes product liability coverage.

Product liability is important for an apparel brand. It covers you if a customer has an allergic reaction to your hoodie's fabric or if a component like a zipper causes an injury. Without it, a single claim could put you out of business.

Also, consider commercial property insurance to protect your inventory. Many new owners assume their homeowner's or renter's policy covers business stock, but most policies exclude it. This insurance protects your hoodies from theft, fire, or damage while stored at your location.

Find the right provider

Look for insurers that specialize in e-commerce. Providers like The Hartford, Hiscox, or Next Insurance understand the risks of online retail. They can help you get the right coverage without overpaying. An agent who understands e-commerce is a valuable partner.

Here are 4 immediate steps to take:

• Get a quote for a $1 million general liability policy.
• Confirm that the policy explicitly includes product liability.
• Check your homeowner's policy for business inventory exclusions.
• Compare quotes from two providers that specialize in e-commerce.

Step 4: Set up your location and equipment

A spare room or garage of about 100 square feet is enough space to start. Check your city’s rules on home-based businesses, as some have restrictions on inventory storage. A small, climate-controlled storage unit is another option if your home is not suitable.

Gather your production gear

Your main purchase will be a heat press for applying designs, which runs $300-$600 for a reliable 15x15 inch model. Many new owners buy cheap presses online, but inconsistent heat can ruin your hoodies. It is better to invest in a quality machine from the start.

You will also need a shipping scale ($20-$50), a thermal label printer ($100-$250) to streamline fulfillment, and basic shelving ($50-$200) to organize your inventory. This setup allows you to handle initial orders efficiently without a large upfront cost.

For blank hoodies, set up wholesale accounts with distributors like SanMar or S&S Activewear using your seller’s permit. For your designs, look at heat transfer suppliers like Supacolor. They let you order as few as 20 transfers per design, which is ideal for testing.

Here are 4 immediate steps to take:

• Confirm your local zoning rules for a home-based business.
• Price a 15x15 inch heat press from two different vendors.
• Open a wholesale account with a blank apparel distributor like SanMar.
• Request a sample pack from a heat transfer supplier.

Step 5: Set up your payment processing

For your online store, you will need a payment gateway like Shopify Payments or Stripe. These integrate directly with your website. Many new owners get surprised by fees, which can take 2.5% to 3.5% of your revenue plus a flat fee per transaction.

If you plan to sell at markets or pop-ups, you need a way to take payments on the go. For hoodie businesses that need to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone.

Just tap and done. At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for selling at pop-up events. This rate is lower than the average commission from other providers, which helps protect your margins on every sale.

• Get Started: Download JIM app for iOS
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone
• Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers

Here are 4 immediate steps to take:

• Compare transaction fees for Shopify Payments and Stripe.
• Check the payout schedule for each online gateway you consider.
• Download the JIM app to explore its interface for in-person sales.
• Calculate your fee on a $50 hoodie sale using JIM versus a standard 2.9% + $0.30 rate.

Step 6: Fund your business and manage finances

Secure your startup capital

An SBA Microloan is a solid option to explore. These loans range from $500 to $50,000, with interest rates typically between 8% and 13%. Lenders look for a detailed business plan and a decent personal credit score, but they are often more accessible than traditional bank loans.

You will also need working capital to cover operations for the first six months. Budget around $4,000 to $9,000. This covers marketing ($300-$600 monthly) and at least one inventory restock ($2,000-$5,000). Many owners budget for the launch but lack cash to maintain momentum.

In addition, you can look into business grants like the Amber Grant for Women. While grants offer free funding, they are highly competitive. It is best to treat them as a supplemental source rather than your primary funding strategy.

Set up your financial tracking

From day one, track every dollar. Use accounting software like Wave, which is free, or QuickBooks Self-Employed. This helps you monitor your cash flow, categorize expenses for tax time, and understand your actual profit margins on each hoodie style you sell.

Here are 4 immediate steps to take:

• Review the application requirements for an SBA Microloan.
• Calculate your estimated working capital for the first six months.
• Research the eligibility criteria for one small business grant.
• Create a free account on Wave to prepare for tracking expenses.

Step 7: Staff and operate your business

Hiring your first team member

You will likely handle all operations yourself at first. Once you consistently process over 10-15 orders a day, you might consider hiring a part-time Fulfillment Assistant. This role handles inventory counts, applies heat transfers, and packs orders for shipment.

Expect to pay between $15 and $20 per hour. No special certifications are needed, but look for someone with strong attention to detail. A frequent misstep is hiring too soon, which can strain your cash flow before sales are stable enough to support payroll.

Streamlining your operations

Before you hire anyone, document your key processes. Create simple, one-page guides for tasks like applying a design or packing an order. This makes training straightforward and ensures consistency. Without these guides, handing off tasks becomes chaotic.

To keep your workflow organized, you can use a free project management app like Trello. Create columns for "To Design," "To Print," and "To Ship." This gives you a clear visual map of your production pipeline, even when you are the only one doing the work.

Here are 4 immediate steps to take:

• Set a daily order volume (e.g., 15 orders) as the trigger for your first hire.
• Draft a job description for a part-time Fulfillment Assistant.
• Create a one-page guide for your most common production task.
• Set up a free Trello board to track your hoodie production stages.

Step 8: Market your business and acquire customers

Start with visual social media

Focus your efforts on platforms like TikTok and Instagram. Create short videos that show your design process, style your hoodies in different outfits, or pack a customer's order. This behind-the-scenes content builds an authentic connection with potential buyers before you even ask for a sale.

You can also collaborate with micro-influencers who have 10,000 to 50,000 followers. Their audiences are often more engaged. Offer them free product for a post, or budget $100-$300 for a dedicated feature. This can provide social proof and drive your first wave of traffic.

Use targeted ads to find buyers

Once you have some organic content, you can use paid ads to reach more people. Start with a small Meta Ad budget of $10-$20 per day. Instead of broad interests like "fashion," target niche communities, such as fans of a specific streetwear blog or a complementary brand.

Many new owners waste money with ads that are too general. It is better to get your first sales from a small, passionate audience. A 1-2% conversion rate from your website visitors is a good benchmark, so set your expectations and budget accordingly.

Here are 4 immediate steps to take:

• Outline three video ideas for Instagram Reels or TikTok.
• Identify five micro-influencers with under 50,000 followers in your niche.
• Create a test audience for a Meta Ad campaign targeting a single, specific interest.
• Calculate your break-even Customer Acquisition Cost (CAC) for one hoodie.

Step 9: Price your hoodies for profit

Your pricing strategy directly impacts your profitability. A common approach is cost-plus pricing, where you add a markup to your total product cost. This ensures every sale contributes to your bottom line and covers your expenses.

Calculate your price

First, determine your Cost of Goods Sold (COGS). This includes the blank hoodie, the heat transfer design, and packaging materials. For example, a $15 hoodie, a $5 transfer, and $1 in packaging brings your COGS to $21.

Many apparel brands apply a 2x to 4x markup. With a $21 COGS, a 3x markup results in a $63 retail price. This leaves you with a $42 gross profit, which is a strong 66% margin before other business expenses.

A frequent oversight is forgetting to account for payment processing fees and potential shipping subsidies. These costs can quietly shrink your profit, so it is a good idea to build them into your financial model from the start.

Once you have a baseline price, check your competitors. Browse Etsy and other independent brand websites. Note their prices, but also look at their hoodie quality, design complexity, and brand presentation to see how you compare.

Here are 4 immediate steps to take:

• Calculate the total COGS for one of your hoodies.
• Research the retail prices of three direct competitors.
• Set a starting price for your hoodie using a 2.5x or 3x markup.
• Estimate your net profit per hoodie after subtracting payment fees.

Step 10: Control quality and scale your operations

Establish your quality standards

Create a simple quality control checklist for every hoodie. Inspect each item for loose threads, crooked seams, and print placement errors. A good goal is to keep your defect rate below 3%. This protects your brand reputation and reduces costly returns.

Many new owners skip this step when they get busy. This is a mistake. A single bad review about quality can deter dozens of potential customers. Document your standards and check every single unit before it ships, no matter how many orders you have.

Plan your growth milestones

Use clear metrics to decide when to scale. Once you consistently hit 20-30 orders per day, you might want to explore inventory management software like Cin7 Core or Katana. These systems help you track stock levels across multiple designs and prevent overselling.

When your daily order volume surpasses 50, it may be time to hire a virtual assistant for customer service. This frees you up to focus on design and marketing. Avoid expanding too quickly. Wait for sales to stabilize before you commit to larger inventory buys or new staff.

Here are 4 immediate steps to take:

• Create a quality inspection checklist with at least five checkpoints.
• Set a target defect rate for your products (e.g., under 3%).
• Research one inventory management app that integrates with your e-commerce platform.
• Define the daily order volume that will trigger your next hire.

Your hoodie business is a blend of creativity and smart planning. The key is consistency in your quality and brand voice, which builds trust with every sale. You have a solid roadmap now. Go make it happen.

When you make those first sales, keep your payment process simple. JIM lets you accept cards right on your phone for a flat 1.99% fee, no hardware needed. Download JIM and you will be ready for business.