Garments costing is very important in garments merchandising. Garment merchandisers do this job by negotiating with the buyer. During garment costing, there are a lot of garments costing terms which are mentioned in this article.
Garments Costing Terminology Used in Garment Import/Export Business:
Different terms related to garments costing are mentioned in the following:
1. Yarn Cost
2. Process Cost
3. Buyer Negotiation
7. Overhead Cost
8. Shortage In Process
9. Buyer Specification About The Definite Product
10. Process Of shipment (Sea or Air)
14. Commission (%) For The Middle Man
15. Profit (%) For The Factory Or Buying House
All the above points are discussed below:
1. Yarn Cost:
Yarn cost is an important matter in garments costing. Accurate yarn cost helps to earn maximum profit from a garment export order.
2. Process Cost:
Process cost means the total amount of processing (Cutting, Sewing, Finishing, etc.) cost needed to make a garment. Cost of garments varies depending on the process needed to make the garment.
3. Buyer Negotiation:
Buyer negotiation or buyer handling is very important in the readymade garments sector. As a garment merchandiser you should explain your total discussion to the buyer in all possible ways by keeping those matters in your way. Buyer will automatically choose from your proposed options.
Quality is the ultimate point of a garments product. Garments buyers are now investing a lot of money to satisfy the customers by providing them with the right quality products.
Garment costing varies depending on the quantity of garments.
CMT means “Cut, Make, and Trims”. In this circumstance, garments manufacturer quotes the buyer a proposed price which covers making cost, trimmings and accessories cot of a garment. Here, all the other required materials sent by the buyer to the manufacturer.
7. Overhead Cost:
Overhead cost means the cost of each operator required to make a garment. Over head cost has a significance impact in garments costing.
8. Shortage In Process:
If garments are made by avoiding unnecessary processes then it will affect garments costing.
9. Buyer Specification About The Definite Product:
Buyer specification about the definite garments means direction about garments making, print, embroidery, wash etc. which is contained by garments specification sheet.
10. Process Of Shipment (Sea or Air):
Shipment of products can be done by using sea freight or air freight which is totally depends on the buyers. Shipping condition affects on garments costing.
Currency is an important matter in the garments manufacturing sector.
FOB means “Free On Board”. In this case, the exporter quotes the garment buyer a price that includes all costs, up to and including, delivery of goods aboard an overseas vessel. Here, the exporter quotes the price by adding fabric cost, accessories cost, CM (Cost Of Making), overhead cost, commission, C&F commission and transportation cost from factory to port.
CIF means “Cost, Insurance and Freight”. In this case, the exporter quotes the buyer a price that covers FOB cost, insurance cost and freight cost. As a result, CIF cost is higher than C&F cost.
14. Commission (%) For The Middle Man:
If the garments factory collects the order from a garment buying house or buying agent then they must pay them a commission percentage for the order.
15. Profit (%) For The Factory Or Buying House:
During garments costing, the garments merchandiser added profit (%) here for the factory or buying house with all the others costs.