How to Prepare Garments Price Quotation

By | August 18, 2015

How to Prepare Garments Price Quotation for an Export Order

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

 

Introduction:

Price quotation method is an important factor in garments manufacturing sector. There are different types of price quotation method. By applying these methods, any garments export order can be fixed. As its importance in garments merchandising today I will present various garments price quotation method for an export order in this article.

Garments Price Quotation

Sample of Garments Price Quotation

Price quotation method of an export order:

There are mainly four methods for price fixation of an export order. Those are in the following:

  1. FOB,
  2. C&F,
  3. CIF,
  4. CMT.

All the methods are discussed in the below:

1. FOB:

FOB means “free on board”. Pricing of the most garments export order quoted on FOB. In this case, exporter quotes the buyer a price that covers all costs up to and including delivery of goods aboard an overseas vessel. That means, exporter quote the price by adding fabric cost, accessories cost, making cost, overhead cost, commission, C&F commission and transportation cost from factory to port. Here, importer or buyer himself bears the freight charge of ship or air.

2. C&F:

C&F means “cost and freight that means (FOB cost + Freight cost). C&F cost is higher than FOB cost. Because, In this case, exporter quotes the buyer a price that covers FOB cost and freight cost of the delivery goods. The whole responsibility including the sending of goods to the selected port of the importer is shouldered by the exporter ship or air. It should be noted that, freight can be vary from place to place and shippers to shippers.

3. CIF:

CIF means “Cost, insurance and freight”. CIF cost is higher than C&F cost. Because, in this case exporter quotes the buyer a price that covers FOB cost, insurance cost and freight cost.

4. CMT:

CMT means “Cut make and trims”. In this case, exporter quotes the buyer a price that covers making cost, accessories and trimmings cost of a garment. Here, importer provides all the required raw materials to the exporter and exporter gets only the making cost, accessories and trimmings cost.

The following example of garments price quotation will be enough to remove your all confusion from the above discussion.

Garments price quotation for an export order in FOB, C&F and CIF:

Particulars
Amount in US Dollar ($)
Fabric (25yds × $1.0) cost per doz
25.00
Accessories and trimmings cost per doz
5.00
Cost of making (CM) per doz
8.00
Sub Total (Production cost)
38.00
Transport cost from factory to sea or air port
(0.5% of production cost)
0.19
Clearing and forwarding cost (2% of production cost)
0.76
Overhead cost (0.5% of production cost)
0.19
Total Cost
39.14
Commission (10% of total cost)
3.91
Net FOB Price
43.05
Freight (4% of net FOB Price)
1.72
Net C&F Price
44.77
Insurance cost (1.5% of net C&F Price)
0.67
Net CIF Price
45.44

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