Garment costing explained: what goes into the price of a piece
A quote is only useful if you know what is inside it. This guide breaks down a cost sheet line by line, so you can set a realistic target and compare suppliers on equal terms.
Why the cost sheet matters
Two quotes for the same shirt can differ widely, and both can be honest. One may use a heavier fabric, a better button or a different finish. One may include freight and the other may not. Unless you can see the parts, you cannot tell a good price from a missing line.
A cost sheet, sometimes called a costing breakdown, lists everything that goes into one finished piece. Learning to read one helps you push back on the right lines, protect quality on the lines that matter, and set targets your supplier can actually meet.
The parts of a garment cost sheet
Most cost sheets follow a similar structure. The labels vary, but the building blocks are the same.
- Fabric. Consumption per garment multiplied by the fabric rate. Consumption is how much fabric one piece uses, in metres for wovens or kilograms for many knits. It depends on the pattern, the size ratio and the fabric width. Fabric is often the largest single cost.
- Wastage. An allowance for cutting loss, end bits, shrinkage and faults. It is either built into consumption or shown as a percentage on top.
- Trims. Buttons, zips, elastic, drawcords, interlining, thread, labels, hang tags and similar items, each with a quantity and a rate.
- CMT. Cut, make and trim: the labour and factory cost of cutting, sewing, finishing and pressing. It rises with the number of operations and the skill they need.
- Value-add processes. Washing, garment dyeing, printing, embroidery, embellishment and special finishes. Each is usually listed separately.
- Testing. Lab tests for colour fastness, shrinkage, composition or other requirements, where your market or retailer asks for them.
- Packaging. Polybags, tissue, boxes, cartons and carton marking.
- Overheads and margin. The factory's or supplier's running costs and profit. Some sheets show this as a line; some build it into CMT.
- Freight and duties (export orders). Inland transport, port charges, sea or air freight, insurance and import duties, depending on the delivery terms agreed.
- GST (orders in India). Goods and Services Tax applies on domestic sales. Following the rate changes announced in September 2025, readymade garments up to ₹2,500 per piece attract 5% GST and pieces above that threshold attract a higher rate. Rates can change, so confirm the current slab with your accountant.
FOB, CIF and DDP in brief
For export orders, the delivery term tells you which costs and risks are included in the price. These terms come from the Incoterms rules published by the International Chamber of Commerce; the current edition is Incoterms 2020.
| Term | What the seller covers | What you cover |
|---|---|---|
| FOB (Free on Board) | Goods delivered on board the vessel at the named port of shipment, export clearance done | Sea freight, insurance, import duties, destination charges |
| CIF (Cost, Insurance and Freight) | Everything in FOB plus sea freight and minimum insurance to the destination port | Import duties, destination charges, onward delivery. Risk passes to you once goods are on board |
| DDP (Delivered Duty Paid) | Delivery to your named place with import duties and taxes paid | Unloading at your premises |
FOB and CIF are meant for sea and inland waterway transport. For air freight or container shipments handled through a forwarder, terms like FCA or CPT are often more accurate. Whatever term you use, write it on the quote with the named place, for example "FOB Mundra" or "DDP London warehouse".
Sourcingo offers logistics support, including customs clearance, for brands abroad.
Setting a target price by working back from retail
The most useful number you can give a supplier is a target cost. The cleanest way to find it is to start at the price your customer pays and work backwards.
The method:
- Start with your planned retail price.
- Remove taxes included in that price, such as GST in India or VAT in the UK and EU.
- Remove the channel's share. A marketplace commission, a retailer's margin or your own store and marketing costs.
- Apply the margin your business needs. Many brands think of this as a markup multiple on landed cost.
- Remove the costs between factory and warehouse. Freight, duties, insurance and inward handling.
- What remains is your target factory price, the number to put in your brief.
An illustrative example. These are made-up round numbers to show the method, not a Sourcingo quote or a market benchmark.
| Step | Example figure |
|---|---|
| Retail price, after removing tax | 2,000 |
| Target landed cost at a 4x markup | 2,000 ÷ 4 = 500 |
| Less freight, duty and handling to your warehouse | 500 − 50 = 450 |
| Target factory price | 450 |
Your own multiple depends on how you sell. Wholesale, marketplace and direct-to-consumer brands work with very different margins. The point is to arrive at a target from your business model, not from a guess.
Once you have it, include it in your brief with your quantity per style and per colour. With a complete brief, Sourcingo sends a costing and line plan within 48 hours.
Why quotes differ between suppliers
When quotes for the same style come back far apart, the cause is usually one of these:
- Different fabric. Composition, weight, construction, finish or mill. Small changes in GSM or yarn quality move the price.
- Different consumption. One supplier allows more wastage or uses a less efficient marker.
- Different trims. A plain button against a branded one; a standard zip against a metal one.
- Different construction. Single-needle against double-needle seams, bound against overlocked finishes, more or fewer operations.
- Different quantities assumed. One quote assumes your full quantity; another assumes the minimum.
- Included or excluded lines. Testing, packaging, freight, duties or GST shown in one quote and missing from another.
- Different delivery terms. FOB against DDP is not a like-for-like comparison.
- Different quality and compliance. Factories with stronger quality systems or certifications may cost more, and some buyers require them.
How to compare quotes fairly
Treat quotes like a science experiment: change one thing at a time.
- Send everyone the same tech pack, with fabric, trims and construction written down. If you only have a sketch, Sourcingo's in-house designer can turn it into a tech pack first.
- Ask for a line-by-line breakdown, not one figure.
- Fix the quantity per style and per colour so every supplier quotes on the same basis.
- Fix the delivery term and place.
- State whether GST, testing and packaging are included.
- Compare samples, not just numbers. A lower price can mean a lighter fabric or simpler finishing. Every Sourcingo style is sampled and you sign off on fit, fabric and finish before bulk.
- Check the timeline. A cheaper quote with a longer or uncertain lead time may cost you a season.
Where you can save, and where you should not
Some lines have room to move without hurting the product:
- Using one fabric across several of your styles to buy it in larger lengths
- Using standard trims across your range instead of a different trim per style
- Reducing colourways in a first order
- Simplifying packaging
Other lines are better protected: fabric quality, fit-critical construction and finishing. Customers notice these first, and they drive returns.
Questions
What is a typical cost breakdown for a garment?
It depends on the product. In many woven and knit styles, fabric is the largest share, followed by CMT and trims. Heavy embellishment, washing or printing can change that balance. Ask for a line-by-line sheet for your own style.
Should I ask for FOB or DDP prices?
If you have a freight forwarder and want control over shipping, FOB or FCA gives you a clear factory price. If you want one delivered price, DDP covers duties and delivery to your door. Compare suppliers on the same term.
Why is my sample price higher than my bulk price?
A sample is made one piece at a time, often with fabric bought in small cuts. Bulk spreads set-up and material costs over many pieces.
Does the price include GST for Indian orders?
Ask every supplier to state it clearly. Quotes are often shown before GST, with GST added on the invoice at the applicable rate.
How soon can I get a costing?
With a complete brief, Sourcingo sends a costing and line plan within 48 hours.
Updated:
Get a costing in 48 hours.
Send us your brief. Once it is complete, you get a cost per style, the minimum it depends on and a production timeline within 48 hours.