Knowing how to cost a garment properly is a key advantage in apparel sourcing and production. It helps you compare supplier quotations, negotiate fairly, plan budgets, and protect margins—especially when you move from sampling to bulk manufacturing.
When costing garments for export orders, the numbers vary significantly by product category. For example, items like sleepwear involve different fabric weights, stitch density, elastic usage, and packaging requirements compared to basic tees. Looking at how sleepwear is actually produced in India gives you a clearer reference for costing variables such as fabric consumption, elastic usage, stitching time, and packing standards.
How to Calculate the Cost of a Garment
To determine the true cost of a garment, you must account for all direct and indirect expenses—not just fabric and stitching. Below is a structured method used by production and merchandising teams.
1) Gather Specifications (Tech Pack Level Clarity)
Define the garment style, construction details, size range, fabric type, trims, finishing requirements, and packaging standards. Costing becomes inaccurate when specifications are vague or incomplete.
2) Material Cost
Material cost includes every input required to produce one unit:
- Fabric (cotton, blends, specialty finishes, required GSM)
- Trims (buttons, zippers, elastics, labels, tags, thread)
- Packaging (polybags, cartons, inserts, barcode labels)
A practical tip: costing errors often happen when fabric usage is guessed. If you want a reliable method to estimate fabric needs (including allowance), use this guide: how to calculate fabric consumption for garments.
3) Labor Cost
Labor cost depends on garment complexity and operation time. Many factories calculate labor using CPM (cost-per-minute) or SMV-based planning across stitching, finishing, and packing.
4) Overhead Expenses
Overheads are indirect costs such as rent, utilities, machine depreciation, compliance systems, maintenance, and admin expenses. These are allocated per garment based on production capacity and utilization. If you want to understand how factories structure different costing models (especially CMT, CM, CPM, ABC and more), refer to: 8 costing methods used in the garment industry.
5) Packaging, Logistics & Shipment Terms
Include packing method and shipment terms. Export costing may include inland transport, handling, documentation, and FOB-related charges depending on the agreement.
6) Markup & Profit Margin
Add a margin to cover operating expenses and profit. Markup varies by product category, complexity, order volume, and market positioning.
Garment Costing Formula
Cost of Garment =
(Material Cost + Labor Cost + Overhead + Packaging & Logistics) + Profit Margin
How to Create a Clothing Manufacturing Cost Sheet
A garment cost sheet organizes all costing components in one place so you can evaluate feasibility, compare suppliers, and maintain consistent pricing across styles.
- Identify style / season / order volume assumptions
- List materials with consumption, wastage, unit costs
- Break down labor by operation and SMV/CPM method
- Allocate overhead per unit (based on realistic capacity)
- Add packaging, logistics, and export documentation costs
- Apply markup and validate with target selling price
If you are costing bottomwear styles, your elastics, stitching time, pocketing, and wash/finishing assumptions will differ from basic tops. Use this production-category reference: joggers, leggings & sweatpants manufacturing in India.
Download Free Garment Costing Sheet (Excel)
To make costing faster and more accurate, download this ready-to-use Excel costing template (includes formulas and a clear cost sheet structure):
👉 Download Garment Costing Sheet (Excel)
