Costing & Margin Strategy

The number most brands get wrong

Factory price is not product cost. Landed cost includes fabric and trims, cutting and sewing, wash and finishing, labels and packaging, freight, duty, inspection, and the samples and rejects you already paid for.

Brands that price off the factory quote alone often discover their “60% margin” is closer to 35% once the goods are in the warehouse.

What a real cost sheet looks like

• Fabric: price per yard or kilo, consumption, yield and waste allowance
• Trims: zippers, buttons, elastic, thread, interlining, labels, hangtags
• Labor: cut, sew, finish, wash, press, pack — broken out, not bundled
• Overhead and factory margin, stated rather than hidden
• Freight, duty/tariff, customs brokerage and insurance
• Inspection, defect allowance and sample amortization

Engineering the price down

Once the cost is visible, it becomes editable. Usually in that order:

1. Fabric: a different weight, width, mill or stock program
2. Construction: a seam finish or operation that adds cost without adding value
3. Trims: branded hardware versus stock equivalents
4. Quantity: where the price breaks actually fall
5. Factory: the same garment, a better-matched plant
6. Country: only when volume justifies the move