Garments Costing Factors In the Apparel Industry: Detail Guideline

Garments Costing Factors In the Apparel Industry: Detail Guideline

Costing is a very important & crucial part of the garments sector. A smart merchandiser thinks about how to save money & maximize profit for a company. He should think of many important factors for garment costing because he is a proactive person for profit earning.  He must analyze the cost factors of a garment. So, I will present what are the factors related to the garment’s cost. Firstly, A smart merchandiser analysis & will get accurate information from the factory in the following factors:

What are Garments Costing Factors?

1. Fabric description & sourcing.
2. Fabric Consumption.
3. Trims costing & sourcing.
4. Washing information.
5. Printing costing.
6. Embroidery Cost.
7. Cost of Making (CM).
8. Testing of garments.
9. Commercial charge.
10. Profit %
11. Mode of Shipment(Air or Sea)
12. FOB

1. Fabric Description & Sourcing.

Fabric description is a very important part of the costing because it depends on fabric’s nature & it will be changeable during the wash & there can be measurement discrepancies after making garments. So, a smart merchandiser need to follow the below points when he sources fabric & advice to buyers.

• Fabric constructions.
• Fabric composition.
• Fabric Weave
• Actual Shrinkage of fabric(by mill)

Finally, a smart merchandiser will investigate & best sourcing for this fabric. He must know the below points during souring the fabric.

• Fabric price. (Best price)
• Mode of shipment.
• Fabric Production lead time.
• Testing parameter.
• Mode of payment.

2. Fabric Consumption

Fabric consumption is one of the most important & vital roles for garment costing. A Garment costing will bear approximately: 35% to 45% price of the total garment cost. A smart merchandiser needs to do more analysis about consumption. He must know the important factors below for effective garment costing.

• Product Item.
• Sample type & fitting.
• Block pattern.
• Graded pattern.
• How many parts of a sample?
• Shrinkage(added)
• Grainline(way of garments)

3. Trims Costing & Sourcing

A smart merchandiser must be careful about the trims that will be used in garments. And, he also knows how to source. He must take responsibility for trim sourcing where are the best prices. So, a smart merchandiser should think & dimensional dimensional-oriented about trims & sourcing. He must be careful below points in the following.

• Trims items selection.
• Suppliers’ selection.
• Price negotiation.
• Production Lead time.
• Sourcing local or aboard,
•  Quality Assurance.
• Time commitment of historical data.

4. Washing Information:

A smart merchandiser must know to wash instructions in the buyer reference samples. He should have vast knowledge about the washing process in garments. A wash can change garments looks & move into a new product. He must know points below during the costing stage. Dry Wash or mechanical process:

• Sandblasting.
• Grinding.
• Thread bare hole.
• Destroy.
• Whickering.
• Brush.
• PP spray.
• Tacking & tag pining.
• Crinkle.
• Hand Scraping.
• Chevron, hand spot.
• Ripping, pilling cuts.
• Repair the patch along with the bleach spot.
• Resign application.
• Local tint.

Wet wash or Chemical process:

• Garments wash.
• Enzyme wash.
• Enzyme stone wash.
• Enzyme bleach wash.
• Acid wash.
• Pigment wash.
• Caustic Wash.
• Stone Wash.
• Bleach wash(Ice or Snow wash)
• Tie Dye wash.

5. Print Costing & Sourcing:

A smart merchandiser must know what type of print in the sample & what is the print cost. He should be careful about the artwork. The print factory must be near garment manufacturing otherwise it can be a production hamper & costs will increase. He follows the below points.

• What types of print?
• Print Artwork.
• Production leads time.
• Production output.
• Mode of payment.

6. Embroidery Costing & Sourcing:

A smart merchandiser must be careful about embroidery because sometimes the sample has a critical embroidery design & production will be slow. So, during the costing stage, a smart merchandiser must concerned about embroidery productivity & needs to develop an alternative embroidery factory. An embroidery factory must be near garment manufacturing. So, he must be careful below points during costing.

• Types of embroidery.
• Embroidery layout.
• Productions lead time.
• Alternative factory development (if support emergency).
• Mode of payment.

7. Cost of Making (CM)

The cost of making calculations is an important part of a garment. Garments manufacturer pays their workers salaries from this CM. A smart merchandiser calculates the production output of that particular style. A smart merchandiser gets a clear idea of CM from SMV & related costs of a factory. During costing a merchandiser must be careful below points.

• Production output of a particular style.
• Direct & indirect cost of a factory.

8. Testing Parameter of garments:

A smart merchandiser needs to know what are testing parameters of the buyer are. So, he needs to add the testing charge to the costing sheet. And, he should know what are testing parameters & testing charges of a garment are. He must follow the below garment testing parameters during the costing stage.

• Fiber content.
• Fabric weight.
• Count constructions.
• Shrinkage after laundering.
• Fabric strength.
• Seam strength.
• Pilling resistance.
• Color fasting to washing.
• Color fastness to light.
• Color fastness to rubbing.
• Color fastness to perspiration.
• Ph value

9. Commercial Charge:

A smart merchandiser must know how to add commercial charges to import & export any goods from aboard. So, he should maintain a commercial charge to add during the costing stage. He must know the important points.

• LC charge(Master LC & B2B LC)
• CIF Charge.
• Bank endorsement charge.

10. Profit %:

A smart merchandiser must know how to add profit into the costing stage. He needs to discuss with management what profit % to add to the costing sheet. Without profit, a factory cannot develop or sustain itself in the market. He should think & best profits calculate of a factory or company.

11. Mode of Shipment:

A smart Merchandiser must know what type of shipment mode. Buyer determined what type of shipment mode. Sometimes, shipment can be by sea or Air. So, on this basis, he should calculate the ship mode charge added to the costing sheet. He must know the important points.

• Sea shipment.
• Air Shipment.
• Road Shipment.

12. FOB

Conclusion

Costing is the first thing that comes before confirming orders. Costing, negotiation, and after the both parties. It is A detailed guideline on garments costing Factors In the Apparel Industry and know how these points are directly related to the garment costing process.