How to Cost a Garment: Step-by-Step + Free Costing Sheet
Know Your Numbers: How to Cost One Garment Before You Price Anything; A step-by-step walkthrough, plus a free costing sheet that does the math for you
Greetings, conscious fashion friend- thank you for your interest in garment costing. I am happy to have you here. In Funded by Design, I asked you to start a Funder File: the folder of proof that shows a lender, an investor, or you that your business works. Two things belong at the very front of that file: a cost sheet and a margin calculation.
This post is that step. We'll cost one garment, layer by layer, then price it.
Let me be honest about scope. One garment won't tell you how much money your whole collection needs. That takes every style, your fixed costs, and enough runway to wait for wholesale invoices to get paid. But you can't do any of that until you know what one garment costs. So we start here.
The Mistake Almost Everyone Makes
Most first cost sheets add up fabric and sewing, and maybe a few supplies, then stop. That number feels like "the cost," and you set the price from it.
It isn't the cost. It leaves out the fabric you cut away and paid for, the trims and packaging, the patterns and samples, and the freight to get finished goods to you. Miss those, and every price you set afterward is built on a number that's too low.
Two more traps: costing at sample-room prices (always quote production costs) and forgetting that development costs shrink or grow with your run size.
Let's take a look with our Example: A Lined Organic Cotton Dress
Domestic production, 150 units, size range XS to XL. Here's how the cost breaks down.
Layer 1: Materials and trims, $51.93
Body fabric: 2.5 yards of organic cotton poplin at $14/yard, plus 5% cutting waste = $36.75
Lining: 1.75 yards of organic cotton voile at $6/yard, plus 5% waste = $11.03
Fusing, thread, zipper, labels, hangtag, compostable polybag = $4.15
Notice the waste percentage. Fabric you cut away is fabric you paid for.
Layer 2: Labor, $36.50
Cutting $4.00 · Sewing $28.00 · Finishing and pressing $3.00 · QC, tagging and bagging $1.50
If your factory quotes one all-in cut-make-trim (CMT) price, use that single number instead.
Layer 3: Development, $8.00 per garment
Patternmaking and grading $800 + proto and two fit samples $400 = $1,200, divided across 150 units
This is the line most people skip, and it bites hardest on small runs. At 50 units, it becomes $24 per garment.
Layer 4: Getting it to you, $2.00
Inbound freight $2.00. Duty is 0% here because it's made domestically; if you import, look up your product's duty rate and add it.
Total landed cost: $98.43 per dress. That's the true cost of one finished garment, ready to sell.
Now Price It: Wholesale
Choose a target wholesale margin. Many small brands aim for 50 to 60%. We'll use 55%.
Suggested wholesale price = landed cost ÷ (1 − target margin) = $98.43 ÷ 0.45 = $218.72
Round it to the price you'll actually quote: $220, which gives a 55.3% margin. On target.
Now flip it around. At $220, the most this dress can cost and still hit 55% is $99.00. That's your cost ceiling, and it's the most useful number on the whole sheet. Bring it to your factory and your fabric supplier.
Retail and direct-to-consumer
A boutique marking up 2.2x puts this dress at about $485 retail. Keep your own website price the same, so you never undercut your stockists.
Selling direct, you also pay processing (3%), fulfillment ($9), and lose some revenue to returns and markdowns (8%).
That leaves a DTC margin of 66.9%. If your target is 70%, you're below it. The minimum retail price to hit 70% is about $565.
Same dress, two verdicts: on target wholesale, below target direct. This is exactly why you cost first, then price.
If You're Below Target
Work through these levers roughly in this order. The early ones protect your design; the later ones change it.
Fabric efficiency. Fabric is usually your highest cost. Ask your patternmaker for a tighter marker or pieces that nest better.
Quantity. A bigger run lowers per-garment development cost and can unlock better pricing, but only if you can sell the units.
Construction. Fewer seams and simpler finishes mean less labor. Ask the factory which details cost the most.
Trims and packaging. Standardize trims across styles and consolidate suppliers.
Price. Raise it if your customer and positioning support it.
Cut the style. A beautiful piece that loses money on every sale is a sample, not a product.
I built a costing sheet that does all the calculations in this post for you. Enter your numbers in the yellow cells, and it shows your landed cost, suggested wholesale and retail prices, whether you're on target, your cost ceiling, and how many units you need to sell to recoup your production cash. A second tab shows your prices at every margin from 40% to 75%.
Then come back for this month's Insights & Inspirations, where we take these same numbers into the Black Friday question.
P.S. Rather not work it out alone? On Thursday, November 19, I'm running the Garment Costing Clinic: a live 90-minute session where I teach costing and pricing, we work a real example, and I give you a round of written feedback on your filled-in sheet. Founding session: $97. Claim your spot here→Costing Clinic:
Happy Conscious Creating!
Britta
Example figures are illustrative. Your fabric, labor, freight, and duty costs will differ. Always cost at production quotes.
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