Garment Cost Sheet is a crucial document to prepare to get a proper estimate of a collection design and production. It gives you if not exact but an approximate cost to execute apparel design and production for a collection. Here is a detailed guideline how you can prepare a garment cost sheet. Also you can get a format of garment cost sheet. You can use this to prepare your cost and estimated profit from the collection drop. Remember to prepare the cost sheet properly you need to have your tech packs in order. Your tech pack designer has to mention all details that you want to put in your garment. This gives a clarity on your style and makes it easier to prepare proper garment costing sheet.
What is Garment Cost Sheet?
A garment cost sheet is prepared to calculate the cost of one piece of garment. The cost sheet includes the material cost and cost of processing. The production quantity also plays an important part when deciding the cost. This is a complicated subject so let me explain this step by step. I would love to explain this with an example. That’s how we can make it easier to understand the concept of preparing a garment cost sheet. The cost and profit is directly related to fashion design and production pricing. So the fashion design is directly propertional with production pricing.
Header information of a garment cost sheet includes all about the style details. The details are Style Name, Style Number (SKU), Category, Designer, Season, Country of Production etc. From this you can identify the style for which the cost is calculated.
Bill of Materials (BOM)
List all the materials required for the garment, including fabric, lining, buttons, zippers, labels, etc. Specify quantities, units of measurement, and unit costs for each material. Bills of Materials is a part of tech pack it should be done by product developer and tech pack designer together. A small mistake in the bills of material can lead to a high deviation in the cost. So, it should be done with utmost care.
Break down the labor costs associated with the garment. This includes the cost of cutting, sewing, finishing, and any additional labor processes. Specify the number of hours required for each task and the corresponding labor rates. Calculating the labor cost is a complicated process. Some factory do it based on the operations one style has. Manufacturers calculate the number of operations and cost of performing each operation. Then they come up with the total labor cost.
Factor in overhead costs, which include expenses beyond direct materials and labor. This may include utilities, rent, salaries of support staff, equipment depreciation, etc. Allocate a portion of these costs to each garment based on a predetermined formula.
Determine the desired profit margin for the garment. This is usually a percentage of the total production cost. It’s crucial to strike a balance between competitiveness and profitability. Normally in garment industries manufacturers keep 15 % – 22 % on each garment production. The profit margin goes up or down depending on the risk and wastage factors involved. If the garment is risky or complicated and risk associated with it the profit margin goes up.
Transportation and Logistics
Include costs associated with transporting raw materials to the manufacturing facility and finished goods to distribution centers or retailers. Consider shipping, customs duties, and any other logistics expenses. Internal logistic cost from one unit to other is usually calculated with miscellaneous cost but if the calculation is done properly it should be in this head.
Account for the cost of packaging materials and the labor required for packaging the finished garments. This may include boxes, tags, labels, and any other packaging components. Tags, labels and other branding materials are usually provided by the client. If the client provides those the only remaining packaging cost would be the carton boxes and duct tape and poly bags for garments.
Allocate funds for quality control processes to ensure that the final product meets the specified standards. This may involve hiring quality inspectors or implementing quality control measures in the production process. This varies from clients to clients. Some client include this with the manufacturing cost and some do it externally.
Consider any additional costs that may arise during production, such as tech pack design, sample development, pattern making, or prototyping. Also, account for any unexpected expenses that may arise.
Total Cost Calculation
Sum up all the costs mentioned above to arrive at the total cost of production for each unit of the garment. This total cost is a critical figure that will help determine the pricing strategy.
Based on the total cost, determine the selling price of the garment. Consider market trends, competitor pricing, and your brand positioning when setting the final retail price. Normally the ration is 1: 3.
Keep a detailed record of all the cost components and calculations for future reference. This documentation is essential for making informed decisions, conducting cost analyses, and refining your cost structure in the future.
Why We Need to Calculate Cost ?
Before writing about the garment cost sheet I scanned google to find out any clear articles. I found nothing in there because no business wants to give a clear costing of how they spend money to get material. They call it a business secret. No clothing manufacturer will give you open costing. They will give you one final cost per garment. But, it is your job to figure out how much a garment should cost in a sensible way. Making a cost sheet is an issue when you are not equipped with garment detailing. And you end up losing a lot of money in production. To keep track of your expenses. you can prepare a cost sheet if you have a tech pack in hand. A tech pack designer can give you the detailing that is helpful in preparing your cost sheet.
Visit Tech Pack Template Store if you are starting a brand with styles everyone using with your own brand name or some graphics artwork to customize. You may buy the tech packs to send to clothing manufacturers. With this tech pack template, you may add your graphic artwork and logos. You can save hundreds of dollars with these tech packs. We develop fashion spec sheet templates and test them several times in production. Once the measurements come out perfect we finalize the spec sheet. If you need a proper clothing manufacturing cost estimation, please go for a proper tech pack design. By following these steps, you can prepare a comprehensive garment cost sheet that considers all aspects of production, helping you make informed decisions about pricing and ensuring the financial viability of your garment.