How to Prepare Garment Price Quotation in Clothing Industry?
How to Prepare Garments Price Quotation for an Export Order
Apparel Price Quotation Process in the Clothing Industry:
The price quotation method is an important factor in the garments manufacturing sector. There are different types of price quotation method. By applying these methods, any garments export order can be fixed. As its importance in garments merchandising today, I will present various garments price quotation methods for an export order in this article.
Price Quotation Method of an Export Order:
There are mainly four methods for price fixation of an export order. Those are in the following:
All the methods are discussed below:
FOB means “free onboard”. Pricing of the most garments export order quoted on FOB. In this case, the exporter quotes the buyer a price that covers all costs up to and including the delivery of goods aboard an overseas vessel. That means the exporter quotes the price by adding fabric cost, accessories cost, making cost, overhead cost, commission, C&F commission, and transportation cost from factory to port. Here, the importer or buyer himself bears the freight charge of ship or air.
C&F means “cost and freight which means (FOB cost + Freight cost). C&F cost is higher than the FOB cost. Because, In this case, the exporter quotes the buyer a price that covers the FOB cost and freight cost of the delivery goods. The whole responsibility including the sending of goods to the selected port of the importer is shouldered by the exporter ship or air. It should be noted that freight can vary from place to place and shippers to shippers.
CIF means “Cost, insurance, and freight”. CIF cost is higher than C&F cost. Because, in this case, the exporter quotes the buyer with a price that covers FOB cost, insurance cost, and freight cost.
CMT means “Cut make and trims”. In this case, the exporter quotes the buyer a price that covers the making cost, accessories, and trimmings cost of a garment. Here, the importer provides all the required raw materials to the exporter and the exporter gets only the making cost, accessories, and trimmings cost.
The following example of the clothing price quotation will be enough to remove your all confusion from the above discussion.
Garments price quotation for an export order in FOB, C&F, and CIF:
Amount in US Dollar ($)
Fabric (25yds × $1.0) cost per doz
Accessories and trimmings cost per doz
Cost of making (CM) per doz
Sub Total (Production cost)
Transport cost from factory to sea or airport
(0.5% of production cost)
Clearing and forwarding cost (2% of production cost)
Overhead cost (0.5% of production cost)
Commission (10% of total cost)
Net FOB Price
Freight (4% of net FOB Price)
Net C&F Price
Insurance cost (1.5% of net C&F Price)
Net CIF Price