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Garment Costing in the Fashion Industry

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I am a writer with special expertise in textiles, fabrics, printing, and dyeing.

How is Garment Costing Done in the Apparel Industry?

Ever wondered why the price of a piece of garment was the way it was? This article will take you through the basics of garment costing and explain the various contributing factors of costing. A lot goes into determining the cost of the garment and with the increasing number of brands in the world, it becomes imperative to learn about garment costing in the fashion industry.

What is Costing?

  • In simple words, it is the basis for exchange - what the Retailer is willing to sell product/service for and what the Consumer is willing to pay to obtain product/service.
  • If the customer is willing to pay the price, that’s what the Product is “worth".
garment-costing-in-the-fashion-industry

Efficient companies cost a garment soon after the sample is completed for assistance in weighing its merit as a potential addition to the line.

Estimated cost of materials and production are the determining factors.

Direct Material – an Important factor

For the majority of mass produced garments, material represents between 45-60% of garment cost. So you need to choose your materials wisely.

garment-costing-in-the-fashion-industry

Elements of Material Cost

  1. Fabric
  2. Thread
  3. Trims
  4. Accessories
  5. Packaging

How to arrive at the Cost of material?

Step 1

  • First, the specification sheet is prepared and a sample pattern, often called a first pattern is developed

Step 2

  • The amount of fabric is estimated for a single garment of one size.
  • Number of buttons, quantity of bindings, tape, lace and other components needed for a single size is estimated
  • Amount of thread required per garment is estimated

Step 3

  • Total quantity required for a dozen garment is established
garment-costing-in-the-fashion-industry

I. Fabric Procurement Considerations

The fabric is the largest component of the materials cost and contributes to about 70% of the costing (in materials). You need to take the following points into consideration while choosing your fabric.

  1. Lead Time
  2. Quality
  3. Delivery
  4. Service
  5. Price
  6. Order Quantity
  7. Discounts

Things to remember

  1. Pattern measurements should first be verified to ensure that the pattern indeed does confirm in size to the specification sheet of finished garment measurements.
  2. Ensure a small percentage is added to the pattern margins to accommodate cutting and sewing inconsistencies as a ‘manufacturing loss allowance’.
  3. Seam margins do not exceed 3/8” in patterns for mass production but couture and custom tailored garments have generous seam margins.

It continues to be more art and imagination than science, and the chances of two manufacturers arriving at the same cost for the same garment is just as unlikely as it ever was.

— Garment costing: ‘Method or madness’ in ‘Bobbin Magazine’

Quick Method of Material estimate:

Step 1: Representative sizes and quantities are used with the addition of a percentage for error (Say 4 %)

Step 2: An average size must be determined and then from existing sample pattern the average size should manually be produced.

Step 3: Any other size needed is produced by rough estimated grading.

Step 4: The aim is to determine area consumed by the widest and longest portions of the pattern pieces.

Step 5: With the preceding information and activities completed, the material amount may be calculated.

II. Thread Cost Estimation

  1. Not major part, but can be a significant amount in case of large quantities.
  2. Should neither be under estimated nor over estimated.
  3. Gutermann (German thread manufacturer) has developed a computer programme to enable manufacturers to calculate with some accuracy the extent of thread consumption.
  4. Lock-stitch machine : 2.5 cm of thread per cm of seam
  5. 5-thread safety stitch machine : 20cm of thread per cm of seam.

III. Trim estimate:

Fabric trims like Zips, Buttons, Labels, Embroidery, Motifs & Badges and Sequins add value to the garment both aesthetically and functionally.

For the cost estimation, following steps are followed:

Step 1: Measurement or calculation of the exact amount used in the single garment.

Step 2: The specification chart is helpful in determining the different amounts which will be needed by different sizes.

Step 3: The same extra percentages may be figured, as for fabric.

Things to remember:

  • The buttons, rivets and other fasteners usually remain constant for all sizes.
  • The method for applying trims which will be used in manufacturing must be known, in order to calculate accurately the amount to cost and order.
  • Some materials are sold in minimum quantities such as 1000 yds, 1000 sets, 100 Dozen or 10 gross. The cost may be accrued accordingly.
garment-costing-in-the-fashion-industry

Fashion Goods:

Fast fashion goods can have risks and some points need to be kept into mind while costing:

  1. Buying high fashion fabric at a premium price
  2. Customer changing style at the last minute
  3. Fabric, trim carry over costs
  4. Re-dying of trims

I have tried to cover a lot of basics in this article and breakdown the basics of costing for garments. The next time you shop for a piece of clothing, do keep in mind these factors before making the purchase. If you have any questions, I would be happy to take them.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2021 PGupta0919

Comments

Amara from Pakistan on May 24, 2021:

It is an informative Hub..

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