Factors Affecting Garments Costing
Factors Affecting Garments Costing:
In garments manufacturing sector, a business is totally depends on garment costing. But there’s some key factors which has considerable affect on garments costing. As its importance on garments business, today I will present those factors which affect on garments costing.
Factors affecting garment costing:
There are some factors which directly affects on 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 in the below:
Before providing costing of an order to the buyer, a garments merchandiser must take clear idea regarding the fabrication from the buyer. In case of woven garments fabrication it can be 10%cotton denim, 2/1 RHT twill, Stretch denim etc and in 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 order. Occasionally it’s seen that, PO sheet has come with different size which was not during the costing.
3. Fabric consumption:
Fabric consumption is another one which has so much importance on garment costing. Here, a garments merchandiser must count all the required fabrics needed for making that garment such as- Body fabric, Rib, Neck tape, Appliqué and others fabric 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 production department. It varies depends on required machine quantity and output quantity.
6. Trimmings and Accessories:
In this case, a garment merchandiser has to calculate required trimmings and accessories needed for completing the order. Here, one important thing is that, merchandiser should calculate the price of trimmings and accessories individually to reduce mistake.
If the garments have print, then a garment merchandiser must follow the clear art work of that, also confirm about 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 correct price quotation after discussing with suppliers.
It’s another important one for garments costing. In running garments business, maximum garments have wash process. So, here a garment merchandiser must confirm correct wash price after discussing with 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 about it by discussing with buyer before providing final costing.
Here, a garment merchandiser must confirm about 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 which affects in garments costing. A garments merchandiser must confirm about GSP by discussing with the buyer that buyer has needed the GSP or not.
14. L/C payment term:
Here, garments merchandiser must collect a previous L/C copy from buyer and discuss with buying commercial department regarding all the terms along with payment.
15. Commercial cost:
Normally, buying 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 total price and it will be 15% for 90 days L/C deferred.
Normally in case of buying 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 garments merchandiser must confirm the shipment date by discussing with production department.
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