Factors Affecting Garments Costing
Factors Affecting Garments Costing:
In the garments manufacturing sector, a business totally depends on garment costing. But some key factors have a considerable effect on garments costing. As its importance on garments business, today I will present those factors which affect on garments costing.
Factors affecting garment costing:
Some factors directly affect garments costing. Those are in the following:
- Size specification,
- Fabric consumption,
- Fabric color,
- CM (Cost of making),
- Trimmings and Accessories,
- Order quantity,
- Test requirement,
- L/C payment term,
- Commercial cost,
- Shipment date.
All the above key factors for garments costing are discussed below:
Before providing the costing of an order to the buyer, a garments merchandiser must take a clear idea regarding the fabrication from the buyer. In the case of woven garments fabrication, it can be 10%cotton denim, 2/1 RHT twill, Stretch denim, etc and in the case of Knit garments, it can be Jersey, Piquet, etc.
2. Size specification:
It’s an important point for garments costing. After receiving an order, a garments merchandiser must confirm the correct size specification given by the buyer with the order. Occasionally it’s seen that the PO sheet has come with different sizes which were not during the costing.
3. Fabric consumption:
Fabric consumption is another one that has so much importance on garment costing. Here, a garments merchandiser must count all the required fabrics needed for making that garment such as as- Body fabric, Rib, Neck tape, Appliqué, and other fabrics with wastage.
4. Fabric color:
Here, a garment merchandiser must confirm the fabric color by discussing with the buyer, that how many colors in the particular style of garments and also confirm color-wise order quantity ratio.
5. CM (Cost of making):
CM or cost of making must be fixed after discussing with the production department. It varies depends on the required machine quantity and output quantity.
6. Trimmings and Accessories:
In this case, a garment merchandiser has to calculate the required trimmings and accessories needed for completing the order. Here, one important thing is that merchandisers should calculate the price of trimmings and accessories individually to reduce mistakes.
If the garments have print, then a garment merchandiser must follow the clear artwork of that, also confirm the mentioned print quality and dimension. It will help the merchandiser to make accurate costing.
If the garments have embroidery then a garment merchandiser must confirm the correct price quotation after discussing with suppliers.
It’s another important one for garments costing. In running a garments business, maximum garments have a wash process. So, here a garment merchandiser must confirm the correct wash price after discussing with the wash factory.
10. Order Quantity:
Here, a garments merchandiser must try to take information regarding order quantity from the buyer. Sometimes it’s seen that garments price varies according to order quantity.
11. Test requirement:
Test requirement of garments is an important point for garments costing. A garment merchandiser must confirm it by discussing it with the buyer before providing the final costing.
Here, a garment merchandiser must confirm the inspection terms by discussing with the buyer, that who will inspect the goods. If third party inspection, then who will pay their charges.
GSP is an important factor that affects garments costing. A garments merchandiser must confirm about GSP by discussing with the buyer has needed the GSP or not.
14. L/C payment term:
Here, the garments merchandiser must collect a previous L/C copy from a buyer and discuss with the buying commercial department regarding all the terms along with payment.
15. Commercial cost:
Normally, buying a house has added 3% of total purchase (Fabric cost + Accessories cost + others item cost) as commercial cost if the L/C payment term is as sight. If the L/C is 60 days deferred, then you can add 7.5% additional cost of the total price and it will be 15% for 90 days L/C deferred.
Normally in the case of buying a house, profit added 20% of CM (Cost of making) cost.
17. Shipment date:
It is one of the important points for discussing with the buyer. Here a clothing merchandiser must confirm the shipment date by discussing with the production department.
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