How To Start A Sock Business
Did you know that over 21 million pairs of socks are made every year worldwide? And on average, a person loses 15 socks annually (never in pairs, of course!). Socks are an essential item of clothing, and their demand is always high. Whether it’s woolly socks, sport and high-performance socks, quirky socks or the staple black office socks, most people will need to buy socks at some point.
If you’ve got an eye for design, and have found a niche to be filled in the hosiery and apparel industry, then please read on to find out what it takes to start your own sock business.
A sock business involves producing for and/or reselling various types of socks to customers – cotton socks, sports socks, warm winter socks, colorful socks, knee-high uniform socks or anklets, and staple white socks.
If you decide to concentrate solely on reselling socks, this is an excellent opportunity to set up an online shop. Again, this model has a relatively low barrier to entry.
Suppose you decide to start your own sock-manufacturing business. In that case, it will require extensive planning, market analysis, and budgeting, and an understanding of the relevant business and production processes. Your company will manufacture socks for individuals, retailers, and wholesalers and may offer custom designs.
Until the late 1990s, Fort Payne in Alabama used to be called the ‘sock capital of the world’. One in every pair of socks globally was produced there. Since the 90s, though, sock manufacturing has shifted primarily overseas to profit from cheaper labor costs.
The market for socks is always on the rise, though, and the apparel manufacturing industry remains profitable and well-established in the US.
According to Statista, socks form part of the hosiery and apparel industry in the US and currently hold a $2 billion market share. This list of some of the largest and most prominent US sock manufacturers provides an excellent overview of the industry and market trends.
The industry is highly competitive, not just in the US but also globally. As a result, companies are continually exploring new materials and technologies to improve the quality and comfort of their products.
Some of the latest trends include:
- The growing popularity of eco-friendly and sustainable materials, such as bamboo and recycled cotton;
- Socks with specialized features, such as compression, anti-odor, and moisture-wicking properties;
- Growing demand for unique and personalized socks.
Statista forecasts the global sock market revenue to go up to $2.2 billion by 2027.
Your target market will vary depending on whether you want to specialize in a specific type of sock. But generally, it includes people of all ages who wear socks regularly, such as adults, teens, and children.
Factors that influence the target market include the style and design of the sock, as well as the materials and price point.
On average, people own between 10 – 20 pairs of socks at any time. Find out whether there is a gap in the market and a niche to be filled with a range of athletic socks, outdoor socks, compression socks, business socks, or funky socks, for example.
Checklist for Starting a Sock Business
Whether you are looking to create custom designs or specialize in a certain type of sock, having the right strategy and checklist can help ensure your start-up is successful.
There are many things to consider when starting a sock business, so take a look at this checklist to see the essential steps needed to successfully launch your business.
Step 1: Write a Business Plan
Starting a sock business can be very rewarding, but it requires careful planning and preparation. A business plan isn’t only a tool to get a business loan or investment, but it also serves as a roadmap for the direction of the business.
A business plan will define the company’s goals and objectives, research competitors, provide an outline of its finances, and create an actionable strategy tied to established milestones. While many successful businesses started without one, you are more likely to prioritize and reach your goals.
Related: How to write a business plan
Step 2: Name the Business
With so many businesses vying for attention in today’s crowded marketplace, choosing a sock business name that stands out and conveys the essence of the company can provide an edge. It is important to consider factors such as brand identity, culture, mission statement, country of origin, and even the target market when starting the brainstorming process.
Once you have a list narrowed down, you will need to make sure the name is available to use and hopefully a matching domain name.
Related: Tips on naming a business
Step 3: Form a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a sock business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Apply for Business Licenses and Permits
After registering the entity, you can begin to registering the business. While there isn’t a license specifically for a sock business, there are some general requirements that vary by state. Most commonly, a sales tax permit, local business license, and Employer Identification Number (EIN) are needed.
Related: Common business licenses, permits, and registrations by state
Step 5: Find Vendors
Before getting pricing from vendors, many vendors will require the business to have their entity formation and sales tax license completed.
To find vendors for your sock business, start by researching a few manufacturers and once you’ve narrowed down your options, contact manufacturers directly to inquire about whether they can create your sock designs, along with delivery times, minimum order quantities (MOQ), and cost per unit. If you plan to focus on a particular type of material, such as cotton or wool, finding a manufacturer that specializes in that material is worth researching as well.
While price is important, don’t overlook quality standards and delivery times, as you will need to budget more for inventory costs if it takes a while for your inventory to be manufactured and shipped by overseas suppliers.
Step 6: Find Financing
While it may not cost a lot to get started, having sufficient capital on hand for the initial inventory run may be needed. If a bank loan is needed, figure that the bank will want the owner to personally invest 25% before making a loan.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
With the sock industry being very competitive and difficulty in standing out as a new sock brand, it is important for those looking to enter the market with thoughtful and innovative marketing strategies.
One of the most effective ways to make your brand stand out in the crowd is social media marketing. Making use of social media platforms such as Instagram, Facebook, TikTok, YouTube, and Twitter allows you to reach potential customers quickly and inexpensively. Additionally, social media can give your business invaluable feedback from customers on designs, pricing, and more that will help ensure your success.
While social media marketing is can be the primary advertising strategy in the successful launch of any new sock business, it should also be complemented by other proactive marketing efforts such as email campaigns, collaboration with clothing brands, partnering with charities, and even pop-up events at clothing boutiques.
With an all-encompassing goal of building connections with potential customers through both traditional and digital outlets, it is possible to build anticipation around your brand’s launch and make sure your socks fly off the shelves.
Related: Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Set Up an Online Store
While some sock companies sell through other retailers such as Amazon or eBay, many will set up as an online sock store. Setting up your first online store can be intimidating, but there are a number of e-commerce platforms that make the job easier, such as Shopify, Wix, and others.
When evaluating options, cost is an important factor, but also take into consideration aspects such as inventory tracking and credit card payment processing systems, as well as website design options to make sure that your customers can navigate easily through your shop.
This material is property of StartingYourBusiness.com
FAQs When Starting A Sock Business
How much does it cost to start a sock business?
If it is a sock reselling business you are setting up, your start-up costs are generally very low, while if you plan to manufacture, the costs will go up as equipment can get pricey. Depending on the size of your business and the types of socks you sell, you can expect to spend anywhere from a few hundred dollars to several thousand dollars. This may include the cost of purchasing inventory, setting up a website, business licenses and permits, packaging, and marketing your products.
On the other hand, the start-up budget for a small-scale sock manufacturing business can cost anywhere between $50,000 to $150,000. In addition to website and marketing costs, you will also need to factor in the following:
– Equipment and machinery, such as knitting and sewing machines
– Raw materials, such as yarn, dyes, and packaging materials
– Labor costs, such as salaries and benefits for employees
– Rent or lease of suitable premises for production and storage, utilities and insurance costs
How profitable is a sock business?
The income potential of a sock manufacturing business depends on the types of products manufactured, its location and the company’s size. On average, a small-scale sock manufacturing business can generate an annual income of $100,000 to $500,000.
Whilst the original outlay is far lower for a sock reselling business, and there is likely more flexibility to run this from home and start it as a side hustle, income can also be relatively high but is more likely between $10,000 and $40,000, to begin with.
The US Bureau of Labor Statistics does provide detailed figures for specific market segments.
Are there grants to start a sock business?
It’s extremely rare to find a grant to start a sock business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a sock business?
Operations and business management skills. If you decide to set up your own sock manufacturing business, we highly recommend you gain a good knowledge of textile production processes, product design and development. You will also need to lead and motivate personnel and manage equipment and supplies. In addition, you should have a solid understanding of financial management, the ability to track against a business plan and its objectives, and experience in marketing and sales.
Marketing and Communication Knowledge. Whether you decide to start your own sock-manufacturing business or will focus on onselling socks, a good understanding of marketing and sales skills will be essential to attract customers and support the success of your venture. Your marketing material, company logo, website, social media posts, and everything should have strong visuals, consistent branding, and a message that connects with your target audience.
If you have an entrepreneurial spirit, a background in the textile industry and a knack for being ahead of trends, starting a sock business may be a great way to become your own boss. You could start this business as a sock reseller until you have created a customer base and then move into manufacturing from there.