Garment costing is the process of calculating what a piece of clothing costs to produce — and therefore what it must sell for. Every brand, from startups to global labels, lives or dies on costing accuracy. This guide breaks down the components professionals put on a costing sheet.
The Components of Garment Cost
A typical costing sheet includes: fabric (usually 40–60% of cost), trims (buttons, zippers, labels), CMT (cut, make, trim labor), washing/finishing, packaging, overhead and profit for the factory, plus your freight, duties, and insurance to land the goods. Miss one line and your margin evaporates.
FOB vs. Landed Cost
FOB (Free on Board) is the factory's price with goods loaded at the port — it excludes international freight and import duties. Landed cost adds freight, insurance, duties, and brokerage to get the true cost at your warehouse door. Always compare suppliers on landed cost, never FOB alone.
From Cost to Wholesale to Retail
The industry rule of thumb: wholesale price is roughly 2× landed cost, and retail is roughly 2× wholesale (keystone markup). A $12 landed garment wholesales near $24 and retails near $48–$60. Your actual multiples depend on category, channel, and brand positioning — luxury runs higher, basics lower.
FAQs
- What is CMT in garment costing?
- CMT stands for Cut, Make, Trim — the labor cost of cutting fabric, sewing the garment, and finishing it. It excludes materials.
- What is a costing sheet?
- A costing sheet (cost sheet) is the itemized document listing every cost component of a garment: materials, labor, overhead, and margins.
- Why do factories ask for target prices?
- So they can engineer the garment to hit your price — suggesting cheaper fabrics or simpler construction when needed.
- How much should I budget for duties?
- It varies widely by country of origin and fiber content. US apparel duties commonly run 10–30% of FOB value; check the HTS code for your product.
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