Apparel costing in the garment making process is one of the most complex procedures. There are lot things that go into pricing a single piece of clothing. Purchasing of raw materials, cost of dyeing, knitting, printing, transport cost, packaging, banking charges, overheads and cost of trims and accessories used all are included in it. The merchandiser and the top management of a company are actively involved in deciding the cost of a garment.
The garment industry follows different techniques to determine the cost. However, broadly the following things are taken into consideration: type of fabric, trims used, garment testing, cost of logistics, profit of the organization, and value added services (printing, embroidery, washing, appliqu). There are other details that go into calculating the cost of a garment like unit of measurement, quantity of the order, and type of dyeing and finishes used.
Once the sample is approved and a pattern is developed, the amount of fabric required per unit is calculated. The fabric cost constitutes 60 to 70 percent of the total garment making cost. The fibre content, spinning process used, fabric GSM (Gram Square Meter), and the percentage of shrinkage and wastage in the fabric are also determined while deriving the cost. The consumption for knitted garments is determined in kilograms while for woven it is determined in yards. Two popular systems used for the calculation of amount of fabric required per garment are mathematical and marker planning systems.
The mathematical system provides a rough estimate to the manufacturer and is generally used in the sampling stage of production. The consumption of fabric for producing a certain style of garment is calculated by measuring the length and the width of each and every piece of the garment pattern. Either by using software like Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM) or manually the marker planning can be done.
Weaving or knitting cost
For knitted garments, the Gram Square Meter (GSM) of the fabric plays a vital role in costing. The type of machines, fabrics & blends, and configurations used for knitting the fabric of the garment affects the price of making. Similarly for woven apparels, the Ends per Inch (EPI) are taken into account. The bigger the beaming length, the lesser will be the cost of weaving. Hence, the beam size can increase or decrease the cost of making a garment. The kinds of weave like twill, satin, and plain and the sort of machineries used for the particular garment influence the weaving cost.
The use of a particular kind of dye and a certain shade of color impacts the dyeing cost of a garment. For example dyeing a fabric in lighter shades costs less and VAT dyes are costlier than reactive ones. Dyeing of specific colors like red and turquoise cost more than basic colors like black and white.
Cost of Trims and accessories
Besides the fabrics, trims and accessories used to make the complete garment such as zippers, buttons, sewing threads, embellishments, care labels, elastics, and cartons add up to the cost. Threads used in a garment depend on the kind of seam used in it. There are various ways to measure the amount of thread being used. At times, the amount of thread used is calculated at the sample making stage itself. The weight of the thread cone is measured before and after using the quantity, and the difference is calculated to identify the amount actually consumed. The size, shape, and material used in trims like zippers, buttons, and labels also sums up the cost of making a garment.
Value added services
Out of the ordinary processes carried out by the manufacturer like washing, printing, and embroidery for the order of a particular buyer. Wet processing chemicals consist of bleaching, softening, and neutralizing processes. Unique and advanced finishes for fabrics can increase the cost of making a garment.
The above costs combine to determine the garment costing in an organization. However, every company has their own method of deriving the cost of making a garment. The following are the different methods of costing incorporated in the textile industry:
1. Job costing: The costing technique evaluates the cost of every job work done for a particular order and debits the cost of jobs for ascertaining the manufacturing cost of a garment.
2. Batch costing: This method is akin to job costing, the only difference is the cost of batch of garment being produced is considered.
3. Terminal costing: This method is usually used for large contracts, wherein contract sheets are maintained for specific and individual contracts.
4. Process costing: Useful for determining the garment cost in which many processes are involved.
5. Departmental costing: For large scale manufacturers the department wise producing cost of garments is an appropriate method of calculating.
Hence garment or apparel costing is an important tool for cutting costs, avoiding wastages, and making optimum utilization of the available raw material and resources. Using an appropriate method of garment costing can help in developing a better quality of style for buyers and provide clarity to the process of manufacturing too.