15 Garment Costing Terms Used in Apparel Industry

By | January 7, 2016

15 Garment Costing Terms Used in Apparel Industry

Mayedul Islam
Merchandiser at Fashion Xpress Buying House.
Badda, Dhaka, Bangladesh.
Email: [email protected]



Garments costing is very important in garments merchandising. Garment merchandisers done this job by negotiating with the buyer. During garments costing, there are a lot of garments costing terms have come in consideration which are mentioned in this article.

Garments Costing Terms

Garments Costing Terminology Used in Garment Export Import Business:

Different terms related to garments costing are mentioned in the following:

  1. Yarn cost,
  2. Process cost,
  3. Buyer negotiation,
  4. Quality,
  5. Quantity,
  6. CMT,
  7. Over head cost,
  8. Shortage in process,
  9. Buyer specification about the definite product,
  10. Process of shipment (Sea or Air),
  11. Currency,
  12. FOB,
  13. CIF,
  14. Commission (%) for the middle man,
  15. Profit (%) for factory or buying house.

All the above points have discussed in the below:

1. Yarn cost:

Yarn cost is an important mater 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. Costing of garments varies depending on the process needed to make garment.

3. Buyer negotiation:

Buyer negotiation or buyer handling is very important in 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.

4. Quality:

Quality is the ultimate point of a garments product. Garments buyers are now invested a lot of money to satisfy the customers by providing them right quality products.

5. Quantity:

Garment costing varies depending on the quantity of garments.

6. CMT:

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. Over head 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 made by avoiding unnecessary processes then it will be very effective for 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.

11. Currency:

Currency is an important matter in garments manufacturing sector.

12. FOB:

FOB means “free on board”. In this case, exporter quotes the garment buyer a price that includes all costs up to and including delivery of goods aboard an overseas vessel. Here, exporter quote 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.

13. CIF:

CIF means “Cost, insurance and freight”. In this case 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 garment factory collects the order from a garment buying house or buying agent then he must have to pay them commission percentage for the order.

15. Profit (%) for factory or buying house:

During garments costing, garment merchandiser added profit (%) here for the factory or buying house with all the others cost.

Speech from the writer:

If you read this article attentively then you can easily answer the following questions in the interview:

  1. Mention different terms used in garments costing.
  2. Mention various terms used in garment pricing.
  3. Mention some important terms in garment costing.
  4. Mention all the terms used in apparel costing.
  5. Mention different apparel costing terminology used in garment export import business.
  6. Show apparel costing terminology list used in garment export import business.
  7. Mention different apparel pricing terminology used in apparel import export business.

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8 thoughts on “15 Garment Costing Terms Used in Apparel Industry

  1. suresh kumar

    I want job in garment feild,can u help me?
    Am so happy for readed ur page its very use full me ,thank you somuch.

  2. md shamim hossain

    sir what the most important thing I have to know to be a merchandiser.in that field I want to establish myself. help me please.

  3. pandey ji

    Wholesaler to viscous jacquard fabric and pollster weightless fabric .

  4. Jahir Mahmood.

    Exelent.20 years before this was impossible to find. We did everything on ink and pen with papers.Now everybody is getting from net like from your post.
    thank you for your efforts.

  5. Jahid Hasan

    If anyone want to be a successful merchandiser then at first what he have to do??
    I complete my graduation on merchandising.
    But I have no experience and also no reference.
    Now what can i do??
    Please help me.
    I want to establish me in this sector.

  6. Zakir Hossain

    I’m really excited about writing these RMG articles. It’s a helpful information about whole processing of RMG. May God bless you writer.


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