I'm still debating as to wear to put this. In my neighbourhood, I'd like to have a clothing store. However, I would like a sim to make the clothes via the sewing maching from FT.

Would they be able to stock the clothing rack with the clothes they made so that they could be sold? If not, does anyone have an alternative to allow sim to buy clothing made by other sims?

The clothes made with the sewing machine appear as a pile of folded clothes. You can either click on it and choose 'add to wardrobe' to be able to wear them, or else mark the pile of clothes for sale at your business for other sims to buy. I don't think there is any way of getting them to appear on a clothing rack- they are individual objects.

The only way I know this would work is by putting the clothing you made from your inventory onto some display shelves and set them for sale if you have OFB.