Leather Belt Making Business in India - Costs, Profits & ROI

No segment and product are too late to enter the fashion industry. One of the major benefits of starting a leather belt-making business is that it can be started with very fewer operating difficulties and regulatory concerns. The product can be planned for launch once the operations and logistics are sorted and can be placed in any market segment based on its usage and pricing. The leather industry in the fashion segment controls a major portion of the market and everybody wants to get in on the feel that a leather product adds. The leather industry is pegged to grow at a CAGR of 6% till 2028 and therefore this presents us a perfect opportunity to talk about ways that could help you set up a leather belt making business and become profitable.

Let’s look into the steps required for the leather belt making business:

1- Choose a Suitable Location

The general guideline is that you should be guided by the demand for such a product and the simple availability of labour and raw materials in the location you so desire to establish the business when picking a site for your leather belt manufacturing business. You can reduce the cost of shipping your raw materials and finished goods to and from your production facility and warehouse if you can find a convenient location for your leather belt manufacturing company.

It cannot be emphasised enough that where you decide to launch your leather belt manufacturing company is crucial to its success. As a result, business owners are willing to rent or lease a facility in a prominent area where the demography includes people with the necessary purchasing power and lifestyle.

Make sure to undertake complete feasibility studies and market surveys before deciding on a site for your leather belt manufacturing business. It's not impossible that you can find a similar business that recently closed its doors where you wish to open your own.

2- Register Your Business

The first step to setting up your company is to register the business. For business registration, you would need a trade license, a GST registration, a business registration, MSME registration and a license if want to export your products. You have to establish a current account, need an IEC code and are also required to register under the state guidelines.

3- Set Up Your Capital

Starting a leather belt manufacturing company can be financially feasible, especially if you decide to do so on a modest scale by producing leather belts that can be modified to meet customer demand.

A significant portion of your starting money will go into renting a standard and well-equipped production facility, but if you decide to launch the enterprise on a large scale, you will need to look for funding because it proves to be expensive when it comes to launching a big leather belt manufacturing business.

The majority of your investment would go toward the basic machinery needed to complete the leather belt production process. The other would be absorbed by the required staff, marketing budget, and other resources. If you want to establish a small-scale manufacturing facility, one would need around 5 to 10 lakhs and if you want to have an increased capacity then you would need around 15-20 lakhs. If you want to focus more on pure leather belts, a bit more cost will go towards sourcing raw materials.

4- Perform a Market study

The demographics of persons who wear leather belts span all genders and age groups, therefore the demographics of the industry that makes leather belts are as diverse.

In light of this, if you're considering beginning your own manufacturing company for leather belt, you should consider not only producing and promoting your goods to residents of your city but also people all over the country and world. It is also important to understand the % of the market who want the leather product and those that want pure leather belts.

A major part of the market is also understanding the spending power of your consumers. It is important to therefore set leather belt prices according so that you can meet your customer's demand.

You can also look up some top leather belt manufacturers in the industry like:

• Vermello
• Louis Vuitton
• Allen Cooper
• French Connection
• Wrangler
• Tommy Hilfiger
• Levi’s
• Woodland

5- Source Raw Materials

The raw materials needed for the leather belt industry are cloth, leather, upper leather, chrome leather, decorative accessories, hand tools, threads, handling tools and miscellaneous materials like hooks, and holders if you want to sell a leather belt for men. The raw materials may be easy to acquire locally but at the same time, if you want to import them from foreign countries, they can be acquired at a lower price.

6- Set Up Manufacturing

The investment needed for setting up leather belt manufacturing is less compared to other industries operating in the leather industry. Some of the equipment that one would require cutting machine, scissors, packaging materials, general tools, skiving machinery, cutting machine, side creasing machine and other miscellaneous equipment.

7- Gather Manpower

You would need to hire some employees or workers even if your leather belt manufacturing business was small-scale. Although the steps involved in making leather belts are straightforward, it still takes labour to complete them quickly and with high-quality results.

You should hire at least two skilled workers and possibly management for a business that intends to operate on a small scale. Unskilled labour can be used in place of skilled ones, which will help you cut some expenditures.

You would need more than three skilled workers and a manager to run a medium- or large-scale belt manufacturing business. Once again, in this situation, unskilled people can take the place of skilled workers; the only catch is that you'd need to provide them with good training and get them used to the line or pattern of work being done.

8- Market your goods

Decide on the channels that you will use to market your products and advertise your brands. Social media platforms control the ad space nowadays and have been the go-to channel for brands. However conventional platforms like Television, Radio and newspaper cannot be discounted and each of them has its uses. Next, you can consider the places where your target consumers will exist.

Gift shops are one of the places where your products made of leather, or more specifically, leather belts, would sell well and rapidly. These items are typically bought as gifts from various gift shops by customers. Once you get to know the owners of the gift business, you can make them frequent customers. Some small or significant stores in malls stock such leather goods with a marked and distinctive style in their establishments. Although you wouldn't generate many sales in these shops, the profit margin would be substantial. To have your leather goods displayed here, you would need to build up some brand value. Other channels could be cloth shops and fashion exhibitions.

You can also market your products based on consumer type, for example, pure leather belt for men or women and so on.

9- Decide on Your Selling Channel

Online retail and wholesale stores are now available on an infinite number of platforms. Create an account to showcase your products on popular websites.

Contacting offline retailers is another method for offline platforms. Although there may be a loss in profit margin, selling online is still a viable choice.

Own store—online or offline—creating your brand and store is crucial in the long term unless you are only interested in wholesale.

However, do remember that based on the channel you select, you also have to set up your distribution system accordingly. Online channels would mean you have to have complete control over your supply line channel while on the other hand, other channels would make it possible to outsource your delivery process.

10- Profit Margin

The profit margin will vary in the leather belt manufacturing industry depending on the kind of machinery used and the scale at which you are producing and selling. You might readily anticipate earning a profit margin or percentage that ranges from 25% to 40%. The figures could change based on demand.

Therefore the estimates here show that once established, the industry offers a very attractive return and with demand surging, the upside may be boundless.

FAQs: Leather Belt

Q. What is a genuine leather belt?

Ans: A genuine leather belt does not look as fancy as normal leather belts and is made of pure leather. They can be a bit pricier than normal leather belts and are mainly targeted toward upper-middle-class consumers.

Q. What are the different types of leather belts?

Ans: The different type of leather belts are bonded, full-grain, corrected grain and top grain.

Q. Is it advisable to guarantee customers' quality on leather belts?

Ans: The guarantee that you will give to your customers will only help them trust your brand more but at the same time, you have to see to it that the products follow all quality standards and are genuine. If you don't deliver on your promises, then that can tarnish your brand.