The real cost of a garment

What you take from this lesson: Be able to say, with a number, how much it costs to produce each garment.

Variable cost and fixed cost

Variable cost is what you pay for each garment: fabric, trims and notions, sewing, and cutting if you outsource it. If you produce one hundred garments, you pay it one hundred times.

Fixed cost is paid once for the whole production: the pattern, the sample, the design. It is spread across the units, so the more you produce, the less it weighs per garment.

Mixing them up is what makes the numbers come out wrong. Adding the full price of the pattern to the cost of the first garment gives an absurd number that makes a perfectly profitable production look unworkable.

The cost items, one by one

To get to the variable cost of a garment, you add up:

• Fabric: that garment's consumption × price per meter.
• Trims and notions: thread, elastic, zipper, cord, snaps. Calculated per garment, even if you buy them in bulk.
• Labels: brand, content, and size labels. Required if you are going to sell.
• Cutting: if outsourced, what they charge per garment, or per spread divided by the number of units.
• Sewing: what the workshop charges per finished garment.
• Finishing: pressing, quality control, bagging.

Where the pattern comes in

The pattern is a fixed cost, and it is divided among all the units you are going to produce with it, now and in the future.

A Moldey sewing pattern in PDF A4 costs $10. Spread over 50 garments, it adds 20 cents to the cost of each one. Over 200, five cents. And since the pattern is good forever, by the second production run that cost is already zero.

That is why saving money on patternmaking is the worst decision you can make: it is the smallest item in the cost and the one that does the most damage when it is badly resolved.

From cost to price

Cost is not price. The price also has to cover the expenses that aren't in the garment: shipping, sales commissions, packaging, taxes, and your own time spent on administration and selling.

A common mistake when starting out is setting the price as "cost times two" without looking at what is left out of that cost. If a selling platform takes a 15% commission, that 15% comes out of your margin, not out of thin air.

The minimum spreadsheet

You don't need a system. A spreadsheet with six columns is enough: model, size, fabric consumption, fabric cost, trims and notions cost, sewing cost. The sum of the last three is the variable cost of that garment.

What matters isn't the tool but updating it whenever a price changes. A cost calculated with the fabric price from six months ago is the wrong cost.

Common mistakes

• Adding the full price of the pattern to the cost of the first garment.
• Forgetting trims, notions, and labels, which come to cents per garment but add up in the total.
• Setting the price without accounting for sales commissions or taxes.

In short

Variable cost is what you pay per garment; fixed cost is what you pay once and spread across units. The pattern is a fixed cost and adds cents per unit.