Garment Cost Sheet Template
Understanding the true cost of producing a garment is essential for setting profitable retail prices and making informed sourcing decisions. A garment cost sheet breaks down every expense that contributes to the final landed cost, from raw materials and trims to labor, overhead, shipping, and import duties. Without a comprehensive cost sheet, brands often underestimate production costs and erode their margins. Our template provides a structured format for calculating costs at the style level, with built-in formulas for markup, margin, and landed cost calculations. Use it during development to evaluate fabric choices, compare factory quotes, and ensure every style in your collection meets your target margin before committing to production.
Why Accurate Costing Matters
Garment costing directly impacts profitability. A two-dollar error on a single style produced in a run of five thousand units equals a ten-thousand-dollar margin loss. Multiply that across a collection of thirty styles and the financial impact becomes significant. Accurate cost sheets prevent these errors by forcing you to account for every component and process.
Cost sheets also serve as negotiation tools. When you present a detailed cost breakdown to a factory, you demonstrate that you understand the production process and can have informed discussions about pricing. This transparency often leads to better quotes and stronger factory relationships.
Cost Sheet Components
Our template organizes costs into categories that align with how factories and sourcing teams think about garment pricing. Each category can be expanded with line items specific to your product.
- Fabric cost including consumption per unit, wastage factor, and price per yard or meter
- Trim costs covering zippers, buttons, labels, hang tags, elastic, and thread
- CMT or labor cost for cutting, making, and trimming
- Washing, dyeing, or finishing costs for any post-production treatments
- Embellishment costs for printing, embroidery, or applique
- Packaging costs including poly bags, tissue paper, and carton allocation
- Freight and logistics costs from factory to warehouse
- Import duty and customs fees based on HS code classification
Calculating Fabric Cost
Fabric is typically the largest single cost component, representing forty to sixty percent of the total garment cost. To calculate fabric cost accurately, you need three numbers: the consumption per unit in yards or meters, the wastage percentage, and the fabric price per yard or meter.
Consumption comes from your pattern maker or factory and represents how much fabric is needed to cut one garment. Wastage accounts for the fabric lost during cutting due to pattern placement inefficiency, typically three to eight percent. Multiply consumption by one plus the wastage percentage, then multiply by the fabric price to get fabric cost per unit.
Understanding CMT and FOB Pricing
CMT stands for cut, make, and trim, which represents the factory labor cost for producing the garment. Some factories quote CMT separately from materials, while others quote FOB (free on board), which includes materials, labor, and packaging in a single price.
Our template supports both pricing models. If your factory quotes FOB, you can enter the total FOB price and use the cost sheet to verify it against your own material cost estimates. If the factory quotes CMT, enter each material cost individually and add the CMT labor cost to build up the total.
Landed Cost Calculation
The landed cost is the total cost of getting a finished garment from the factory to your warehouse, ready to sell. It includes the FOB or CMT cost plus freight, insurance, import duty, and any domestic logistics. Our template calculates landed cost automatically once you input the relevant line items.
Import duty varies by product category and country of origin. Classify your garments using the correct Harmonized System codes and check current duty rates for your import market. A customs broker can help with classification if you are unsure.
Margin and Markup Formulas
The template includes built-in formulas for calculating wholesale and retail prices based on your target margin or markup. Margin is the percentage of the selling price that is profit, while markup is the percentage added to cost to arrive at the selling price. For a garment costing ten dollars with a fifty-percent markup, the wholesale price is fifteen dollars. For a fifty-percent margin, the wholesale price is twenty dollars.
Set target margins by category based on industry benchmarks and your brand positioning. Premium brands typically target sixty to seventy percent retail margins, while value brands might operate at forty to fifty percent. Ensure your target margins are achievable given your actual landed costs.
Comparing Factory Quotes
Use the cost sheet to compare quotes from multiple factories on a like-for-like basis. Break down each quote into its component costs and verify that they are quoting the same fabric quality, trim specifications, and finishing processes. A lower total price might reflect inferior materials rather than genuine cost efficiency.
Document all quotes in a comparison matrix alongside your cost sheet. This creates a record for future seasons and helps you build a database of competitive pricing by product category and production region.
Frequently Asked Questions
What margin should I target for my garments?
Target margins vary by channel and brand positioning. Direct-to-consumer brands typically aim for sixty-five to seventy-five percent retail margin. Wholesale brands need to account for retailer markup and usually target forty-five to fifty-five percent on wholesale price. Set targets by product category since basics and accessories often have different margin structures than seasonal fashion pieces.
How do I account for currency fluctuation in my cost sheet?
Build a currency buffer into your costing, typically three to five percent above the current exchange rate. If you are costing in US dollars but paying factories in local currency, lock in exchange rates with your bank when placing orders. Our template includes a currency conversion field where you can update the rate and see the impact on landed costs instantly.
Should I include overhead costs in the garment cost sheet?
The garment cost sheet typically covers direct costs only: materials, labor, and logistics. Overhead costs like design salaries, rent, marketing, and software are usually tracked separately in your profit and loss statement. However, some brands allocate overhead per unit for a fully loaded cost view. Our template has an optional overhead allocation row for this purpose.
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